Fintech
The demise of BaaS fintech Synapse could derail funding prospects for other startups in the space
Welcome to TechCrunch Fintech! This week we’ll look at the long-term implications of Synapse’s failure on the fintech sector, Majority’s impressive ARR milestone, and more!
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The big story
Last week we reported how Copper bankinga digital banking service aimed at teenagers, suddenly discontinued his bank deposit accounts and debit cards. The startup said its banking middleware provider, Synapses, was terminating its service “imminently.” The situation is just one of many where businesses and consumers are affected by the implosion of the Synapse Banking-as-a-Service Company (BaaS). I wrote a deep dive on the potential short- and long-term implications of its disappearance for the fintech sector. While that’s certainly not the only bad news, it shows how treacherous things are for the often interdependent fintech world when a key player finds itself in trouble.
Analysis of the week
In addition to Copper, so many niche digital banks have struggled as of late that it was even more noteworthy to see the immigrant banking platform Majority not only raise more money, but also reveal that he did it reached $40 million in ARR starting in April. That’s no easy feat, especially in a crowded space that includes competitors like Commun, Club, Raise AND Welcome Technologies. Founded in 2019 by Swedish immigrant Magnus Larsson, Majority says that in the past year the company has grown its revenue three times while the number of users has doubled.
Dollars and cents
Fintech in the UK Vitessewhich targets insurance companies with an all-in-one treasury and payment management platform, has closed a $93 million Series C funding round led by investment giant KKR. The company said it is doubling down on its expansion efforts in the United States.
Finouta set of enterprise-focused tools designed to help manage and optimize cloud costs, last week closed a $26 million Series B round led by Red Dot Capital. We covered the company’s launch in stealth mode in 2022. Finout says it has attracted high-profile clients such as The New York Times, Tenable and Wiz despite this crowded market and has grown annual recurring revenue ninefold from 2022 to 2023.
Founded by Peter Thiel Valar Ventures – which has supported numerous fintechs – raised a $300 million fundhalf the size of the last one.
What else are we writing
GooglePay announced last week the unroll of numerous updates that take advantage of its integrations with other Google products, such as Android and the Chrome browser. People who make payments with Google Pay can now see the benefits and benefits of their card before selecting it. Additionally, they can use “buy now, pay later” through partners like Affirm and Zip, and can enter their card details via biometrics or PIN, instead of entering the security code. The changes are designed to improve the consumer experience of using Google Pay and make it a more competitive option compared to other payment methods.
Indian digital payments platform Payment warned of job cuts after reporting that its net loss widened in the fourth quarter as it grapples with a recent regulatory tightening.
Titles of great interest
Stripe launches new payment and financing tools to accelerate business growth in the UK
Rho collaborates with Navan for travel and expense management
Capchase Secures $114 Million to Provide Financing to SaaS Companies
ICYMI: Federal prosecutors are examining financial transactions at Block, owner of Cash App and Square
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