Welcome to The Interchange! If you received this in your inbox, thank you for signing up and your vote of confidence. If you’re reading this as a post on our site, sign up here so you can receive it directly in the future. Every week, we’ll take a look at the hottest fintech news of the previous week. This will include everything from funding rounds to trends to an analysis of a particular space to hot takes on a particular company or phenomenon. There’s a lot of fintech news out there and it’s our job to stay on top of it — and make sense of it — so you can stay in the know. — Mary Ann and Christine
Hi, hi. Christine and I strayed a bit from our typical fintech coverage this week to do some investigative reporting. We took a look at Newchipan Austin-based accelerator that recently imploded. In our humble opinions, it’s definitely worth a read. While it was not focused on fintech startups exclusively, it’s a complex story of a troubled accelerator that claimed to help entrepreneurs “succeed.” Some founders claim it did anything but, while a group of employees were so unhappy with the way the company was being run that they walked out en masse over two weeks ago. There is a lot of back-and-forth, and while we don’t know for sure what happened behind closed doors, it’s sad to see any organization aimed at serving the startup community end up in this situation — especially for the impacted founders and employees.
On a pure fintech note, we saw a flurry of insurtech funding rounds last week! ProWellTech reported on four such raises alone, including Wefox, Obie, bolttech and Figorr. This prompted TC+ editor Alex Wilhelm to go a bit deeper and conclude that “despite messy IPOs, there’s good reason to be optimistic about insurtech startups.” — Mary Ann
Move over Apple, Step launches 5% savings account
Over the past few years, each time I looked at the monthly dividend on my bank account, I would say to myself, “The bank could really just keep that 6 cents.” Well, neobanks and other fintech companies think we should get better returns as well.
This week, I wrote about Step, the digital banking service geared toward teens and young adults, which announced a whopping 5% rate for its savings accounts.
While the rate is important, I do want to point out how widely known it is that few Americans could come up with $400 in an emergency, so it’s nice to see Step and others focusing on ways to motivate people to save more.
The news comes about a month after Apple launched its savings account rate of 4.15%. Step co-founder and CEO CJ MacDonald told ProWellTech that it was always the company’s goal to offer the highest rate; however, you can’t help but wonder if Apple’s entry into the market perhaps inspired neobanks and other financial organizations to close the gap.
Find out how Step’s 5% account works. — Christine
As reported by Manish Singh: “Founders of ZestMoney have resigned from the startup, the latest twist in the fate of the Indian fintech whose ability to underwrite small ticket loans to first-time internet customers once drew the backing of many high-profile investors, including Goldman Sachs. Lizzie Chapman, Priya Sharma and Ashish Anantharaman, the founders of ZestMoney, informed employees about their decision on Monday.” More here.
After recently acquiring another startup, Ribbonreal estate fintech EasyKnock confirmed that it laid off 10% of its employees. A spokesperson told ProWellTech that the decision “was part of a larger effort to accelerate” the company’s “path to profitability and ensure long-term business sustainability.”
In the WTF section of our newsletter: Revolut UK chief told customer he would be waiting for him with a shotgun.
If it feels like every week a corporate spend company is releasing new features, it’s because…that’s pretty much what’s happening. Here is the latest: Ramp to introduce AI tools for tracking business costs. Also, Fintech Ramp launches money-saving AI tools for businesses, announces Microsoft CEO, more as investors.
Truist invites clients to play financial wellness ‘Long Game’ (ProWellTech covered the news when Truist acquired Long Game in an effort to appeal to younger demographics in 2022.)
Stripe powers Pay By Bank for Airbnb
Public unveils Alpha: your AI-powered investing sidekick for smarter decisions
Fundings and M&A
Seen on ProWellTech
Wefox secures new funding at $4.5 billion valuation as it aims for profitability
UK pension startup Smart banks $95M
Cold-chain startup Figorr raises $1.5M, backs the rollout of data-driven perishables insurance
M-KOPA snaps up $250M+ debt, equity for its asset financing platform
Spiff begins ‘massive overhaul of core sales commission engine’ following $50M Series C
Insurtech bolttech gets $196M at $1.6B valuation from investors like MetLife
Tiger Global–backed Axis launches digital payments platform for Egyptian SMEs months after its $8.25M seed
Percent lands $30M investment to connect investors with private credit
Landlord-focused insurtech Obie lands $25.5M led by Battery Ventures
Procurement platform Zip raises $100M at a $1.5 billion valuation
Accounting software firm Tipalti lands $150M growth financing
PayIt makes its first acquisition with purchase of S3
Rental platform Avenue One reaches $1 billion valuation
Co-branded credit card startup Cardless gets $75M credit line
Fintech Maxwell acquires mortgage solutions provider LenderSelect
Once again, thanks for reading and all your support! We are grateful for you. See you next week! xoxoxo, Mary Ann and Christine
Calling all early-stage startups! Apply to join the Startup Battlefield 200 cohort at ProWellTech Disrupt 2023. All finalists get expert training, VC networking, a booth at Disrupt, and the chance to compete for $100,000 in equity-free funds. Applications close May 31. Apply today.