Square’s bank arm launches as fintech aims ‘to operate more nimbly’

Known for its innovations in the payments sector, Square is now officially a bank.

Nearly one year after receiving conditional approval, Square said Monday afternoon that its industrial bank, Square Financial Services, has begun operationsSquare Financial Services completed the charter approval process with the FDIC and Utah Department of Financial Institutions, meaning its ready for business.

The bank, which is headquartered in Salt Lake City, Utah, will offer business loan and deposit products, starting with underwriting, and originating business loans for Square Capital’s existing lending product.

Historically, Square has been known for its card reader and point-of-sale payment system, used largely by small businesses – but it has also begun facilitating credit for the entrepreneurs and smalls businesses who use its products in recent years.

Moving forward, Square said its bank will be the “primary provider of financing for Square sellers across the U.S.”

In a statement, Square CFO and executive chairman for Square Financial Services, Amrita Ahuja said that bringing banking capability in house will allow the fintech to “operate more nimbly.”

Square Financial Services will continue to sell loans to third-party investors and limit balance sheet exposure. The company said it does not expect the bank to have a material impact on its consolidated balance sheet, total net revenue, gross profit, or adjusted EBITDA in 2021.

Opening the bank “deepens Square’s unique ability to expand access to loans and banking tools to underserved populations,” the company said.

Lewis Goodwin had been tapped to serve as the bank’s CEO, and Brandon Soto its CFO. With today’s announcement, Square also announced the following new appointments:

  • Sharad Bhasker, Chief Risk Officer
  • Samantha Ku, Chief Operating Officer
  • Homam Maalouf, Chief Credit Officer
  • David Grodsky, Chief Compliance Officer
  • Jessica Jiang, Capital Markets and Investor Relations Lead

The trend of fintechs becoming bank continues. In February, TechCrunch reported on the fact that Brex had applied for a bank charter.

The fast-growing company, which sells a credit card tailored for startups with Emigrant Bank currently acting as the issuer, said that it had submitted an application with the Federal Deposit Insurance Corporation (FDIC) and the Utah Department of Financial Institutions (UDFI) to establish Brex Bank.

A number of fintech companies, or those with fintech services, have spun up products typically offered by banks, including deposit and chequings accounts as well as credit offerings. Often, these are designed to provide capital to customers who might not be able to get funding on favorable terms from traditional banking institutions, but who might qualify for business-building loans from a provider who knows their company, like Square, inside and out.

Rocket Lab CEO Peter Beck explains why the company needs a bigger rocket, and why it’s going public to build it

Rocket Lab packed a ton of news into Monday to kick off this week: It’s going public via a SPAC merger, for one, and it’s also building a new, larger launch vehicle called Neutron to support heavier payloads. I spoke to Rocket Lab founder and CEO Peter Beck about why it’s building Neutron now, and why it’s also choosing to go public at the same time. Unsurprisingly, the two things are tightly linked.

“We have the benefit of flying Electron [Rocket Lab’s current, smaller launch vehicle] for a lot of customers. and we also have a Space Systems Division that supplies components into a number of spacecraft, including some of the mega constellations,” Beck told me. “So we have very strong relationships with, with a lot of different customers, and I think we get unique insight on where the industry is going, and where the where the pain points are.”

Those pain points informed Neutron, which is a two-stage reusable rocket. Rocket Lab already broke with Beck’s past thinking on what the launch market needed by developing partial reusability for Electron, and it’s going further still with Neutron, which will include a first-stage that returns to Earth and lands propulsively on a platform stationed at sea, much like SpaceX’s Falcon 9. But the market has shifted since Rocket Lab built Electron – in part because of what it helped unlock.

“The creation of Neutron came from from two discrete factors: One, the current need in the marketplace today. Also, if you project it forward a little bit, you know, Neutron will deliver the vast majority – over 90% of – all the satellites that, that are around or in some form of planning. And if you look at those satellites, 80% of them are mega constellations, by volume. So, in talking with, with a bunch of different customers, it was really, really apparent that a mega constellation-building machine is what the market really needs.”

Beck says that combining that market needs with a historical analysis that showed most large launch vehicles have taken off half-full resulted in them arriving at Neutron’s 8 metric ton (just over 17,600 lbs) total cargo mass capacity. it should put it in the sweet spot where it takes off full nearly every time, but also can still meet the mass requirement needs of just about every satellite customer out there, both now and in the future.

“We’re covered in scars and battle wounds from the development of Electron,” “The one thing that that Elon and I agree on very strongly is, by far the hardest part of a rocket is actually scaling it – getting to orbit is hard, but actually scaling manufacturing is ridiculously hard. Now, the good news is that we’ve been through all of that, and manufacturing ins’t just as product on the floor; it’s ERP systems, quality systems, finance, supply chain and so on and so forth. So all that infrastructure is is built.”

In addition to the factory and manufacturing processes and infrastructure, Beck notes that Electron and Neutron will share size-agnostic elements like computing and avionics, and much of the work done to get Electron certified for launch will also apply to Neutron, realizing further cost and time savings relative to what was required to get Electron up and flying. Beck also said that the process of making Electron has just made Rocket Lab extremely attuned to costs overall, and that will definitely translate to how competitive it can be with Neutron.

“Because electron has a $7.5 million sticker price, we’ve just been forced into finding ways to do things hyper efficiently,” he said. “If you’ve got a $7.5 million sticker price, you can’t spend $2 million on flight safety analysis, payload environmental analysis, etc – you just can’t do that. With a $60 or $80 million vehicle that you can amortize that. So we’ve kind of been forced into doing everything hyper, hyper efficiently. And it’s not just systems; it includes fundamental launch vehicle design. So when we apply all of those learnings to nNutron, we really feel like we’re gonna bring a highly competitive product to the marketplace.”

As for the SPAC merger, Beck said that the decision to go public now really boils down to two reasons: The first is to raise the capital required to build Neutron, as well as fund “other” projects. The other is to acquire the kind of “public currency” to pursue the kinds of acquisitions in terms of business that Rocket Lab is hoping to achieve. Why specifically pursue a SPAC merger instead of a traditional IPO? Efficiency and a fixed capital target, essentially.

“We were actually sort of methodically stepping towards an IPO at the time and, we were just sort of minding our own business, but it was clear we were pursued very vigorously by a tremendous number of potential SPAC partners,” Beck told me. “Ultimately, on the balance of timelines, this just really accelerated our ability to do the things we want to do. Because, yes, as you pointed out, that this kind of streamlined the process, but also provided certainty around proceeds.”

The SPAC transaction, once complete will result in Rocket Lab having approximately $750 million in cash to work with. One of the advantages of the SPAC route is that how much you raise via the public listing isn’t reliant on how the stock performs on the day – Beck and company know and can plan on that figure becoming available to them, barring any unexpected and unlikely barriers to the transaction’s closing.

“Having all the capital we need, sitting there ready to go, that really sets us up for a strong execution,” he said. “If you look at Rocket Lab’s history, we’ve only raised spend a couple of hundred million dollars to date, within all the things we’ve done. So capitalizing the company with $750 million – I would expect big things at that point.”


Early Stage is the premiere ‘how-to’ event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company-building: Fundraising, recruiting, sales, legal, PR, marketing and brand building. Each session also has audience participation built-in — there’s ample time included in each for audience questions and discussion.

Rocket Lab CEO Peter Beck explains why the company needs a bigger rocket, and why it’s going public to build it

Rocket Lab packed a ton of news into Monday to kick off this week: It’s going public via a SPAC merger, for one, and it’s also building a new, larger launch vehicle called Neutron to support heavier payloads. I spoke to Rocket Lab founder and CEO Peter Beck about why it’s building Neutron now, and why it’s also choosing to go public at the same time. Unsurprisingly, the two things are tightly linked.

“We have the benefit of flying Electron [Rocket Lab’s current, smaller launch vehicle] for a lot of customers. and we also have a Space Systems Division that supplies components into a number of spacecraft, including some of the mega constellations,” Beck told me. “So we have very strong relationships with, with a lot of different customers, and I think we get unique insight on where the industry is going, and where the where the pain points are.”

Those pain points informed Neutron, which is a two-stage reusable rocket. Rocket Lab already broke with Beck’s past thinking on what the launch market needed by developing partial reusability for Electron, and it’s going further still with Neutron, which will include a first-stage that returns to Earth and lands propulsively on a platform stationed at sea, much like SpaceX’s Falcon 9. But the market has shifted since Rocket Lab built Electron – in part because of what it helped unlock.

“The creation of Neutron came from from two discrete factors: One, the current need in the marketplace today. Also, if you project it forward a little bit, you know, Neutron will deliver the vast majority – over 90% of – all the satellites that, that are around or in some form of planning. And if you look at those satellites, 80% of them are mega constellations, by volume. So, in talking with, with a bunch of different customers, it was really, really apparent that a mega constellation-building machine is what the market really needs.”

Beck says that combining that market needs with a historical analysis that showed most large launch vehicles have taken off half-full resulted in them arriving at Neutron’s 8 metric ton (just over 17,600 lbs) total cargo mass capacity. it should put it in the sweet spot where it takes off full nearly every time, but also can still meet the mass requirement needs of just about every satellite customer out there, both now and in the future.

“We’re covered in scars and battle wounds from the development of Electron,” “The one thing that that Elon and I agree on very strongly is, by far the hardest part of a rocket is actually scaling it – getting to orbit is hard, but actually scaling manufacturing is ridiculously hard. Now, the good news is that we’ve been through all of that, and manufacturing ins’t just as product on the floor; it’s ERP systems, quality systems, finance, supply chain and so on and so forth. So all that infrastructure is is built.”

In addition to the factory and manufacturing processes and infrastructure, Beck notes that Electron and Neutron will share size-agnostic elements like computing and avionics, and much of the work done to get Electron certified for launch will also apply to Neutron, realizing further cost and time savings relative to what was required to get Electron up and flying. Beck also said that the process of making Electron has just made Rocket Lab extremely attuned to costs overall, and that will definitely translate to how competitive it can be with Neutron.

“Because electron has a $7.5 million sticker price, we’ve just been forced into finding ways to do things hyper efficiently,” he said. “If you’ve got a $7.5 million sticker price, you can’t spend $2 million on flight safety analysis, payload environmental analysis, etc – you just can’t do that. With a $60 or $80 million vehicle that you can amortize that. So we’ve kind of been forced into doing everything hyper, hyper efficiently. And it’s not just systems; it includes fundamental launch vehicle design. So when we apply all of those learnings to nNutron, we really feel like we’re gonna bring a highly competitive product to the marketplace.”

As for the SPAC merger, Beck said that the decision to go public now really boils down to two reasons: The first is to raise the capital required to build Neutron, as well as fund “other” projects. The other is to acquire the kind of “public currency” to pursue the kinds of acquisitions in terms of business that Rocket Lab is hoping to achieve. Why specifically pursue a SPAC merger instead of a traditional IPO? Efficiency and a fixed capital target, essentially.

“We were actually sort of methodically stepping towards an IPO at the time and, we were just sort of minding our own business, but it was clear we were pursued very vigorously by a tremendous number of potential SPAC partners,” Beck told me. “Ultimately, on the balance of timelines, this just really accelerated our ability to do the things we want to do. Because, yes, as you pointed out, that this kind of streamlined the process, but also provided certainty around proceeds.”

The SPAC transaction, once complete will result in Rocket Lab having approximately $750 million in cash to work with. One of the advantages of the SPAC route is that how much you raise via the public listing isn’t reliant on how the stock performs on the day – Beck and company know and can plan on that figure becoming available to them, barring any unexpected and unlikely barriers to the transaction’s closing.

“Having all the capital we need, sitting there ready to go, that really sets us up for a strong execution,” he said. “If you look at Rocket Lab’s history, we’ve only raised spend a couple of hundred million dollars to date, within all the things we’ve done. So capitalizing the company with $750 million – I would expect big things at that point.”


Early Stage is the premiere ‘how-to’ event for startup entrepreneurs and investors. You’ll hear firsthand how some of the most successful founders and VCs build their businesses, raise money and manage their portfolios. We’ll cover every aspect of company-building: Fundraising, recruiting, sales, legal, PR, marketing and brand building. Each session also has audience participation built-in — there’s ample time included in each for audience questions and discussion.

First Boulevard raises $5M for its digital bank aimed at Black America

The murder of George Floyd last May ignited many things in the United States last year — one of which that was perhaps unexpected: a rise in the number of digital banks targeting the Black community.

Some members of the Black community took their belief that big banks are not meeting their needs and turned them into startup concepts.

One of those startups, First Boulevard (formerly called Theme), has just raised $5 million in seed funding from Barclays, Anthemis and a group of angel investors such as actress Gabrielle Union, Union Square Ventures John Buttrick and AutoZone CFO Jamere Jackson.

For co-founder and CEO Donald Hawkins, the genesis for the Overland, Kansas-bank came after Floyd’s murder, when he and friend Asya Bradley were talking about what they felt Black America “really needed to get out of a vicious cycle” of dealing with the same issues with no real solutions in sight.

CEO Donald Hawkins

COO Asya Bradley

“After viewing yet another tragedy engulf the Black community, and the all-too-familiar protests against persisting issues,” Hawkins said. “it was beyond clear to me that the solutions Black America needs must be financially-focused and developed within our community.”

The pair both had fintech experience. Hawkins had founded Griffin Technologies, a company focused on providing real-time, contextual intelligence to community banks and credit unions. And Bradley most recently was a founding team member and head of revenue at Synapse, a platform that built banking-as-a-service APIs to help bank the unbanked of America by connecting fintech platforms to banking institutions.

They discovered that there were only about 19 Black banks in the U.S., collectively holding about $5 billion in assets.

“And their technology was really behind the times,” Hawkins said. “We also took a hard look at some of the existing digital banks to really see who was really going about it  in the same way that we felt like America needed, and it was pretty clear at that point, that no one was really attacking the issue of helping Black America build some level of financial stability through the form of wealth-building play.”

The pair formed First Boulevard last August under the premise that Black Americans are “massively underserved consumers” of financial products and services despite having a collective spending power of $1.4 trillion annually. The startup’s mission is to empower Black Americans “ to take control of their finances, build wealth and reinvest in the Black economy” via a digitally-native platform.

Part of its goal with the new capital involves building out a Black business marketplace, which will give its members Cash Back for Buying Black™. It also plans to use the money to expand its team, increase its customer base and grow its platform to offer fee-free debit cards, financial education and on developing technology to help members automate their saving and wealth building goals.

History has proven that oppressed communities can succeed when their finances are centralized, and when it comes to financial services for the Black community, a centralizing force is long overdue,” Hawkins said.

The bank’s Cash Back for Buying Black™ program helps members earn up to 15% cashback when they spend money at black-owned businesses. 

“I believe the most recent stat but that also was that 41% of black owned businesses have closed since COVID-19 started,” Hawkins said. “We want to support them as much as we can.”

First Boulevard also is focused on passively building wealth for its communities.

“Black America as a whole has been blocked from learning how money works. We want to connect our members to wealth-building assets such as micro investments like money market accounts, high yield savings and cryptocurrency — things that Black America has largely been blocked from,” Hawkins said.

Bradley, who serves as First Boulevard’s COO, believes the current financial industry was not built to serve the needs of melanated people. Its goal is to take their understanding of the unique needs of the Black community to provide things such as early access to wages, round up savings features, targeted financial education and budgeting tools.

The pair aims to have a “fully inclusive” team that represents the community it’s trying to serve. Currently, its 20-person staff is 60% black, and 85% BIPOC. Two-thirds of its leadership team are women and 100% is BIPOC.

“We are very proud of that considering that in the fintech space, those are not normal numbers from a leadership perspective,” Bradley said.

For Katie Palencsar, an investor at the Female Innovators Lab by Barclays and Anthemis, said that her firm has always recognized “that access to financial services has long remained a challenge despite the digital evolution.”

“This is especially true for Black Americans who often reside in financial deserts and struggle to find platforms that truly look to serve them,” she said. “First Boulevard deeply understands the challenge.”

Palencsar believes that First Boulevard’s mission of helping Black Americans not just bank, but actually build wealth, is unique in the market.

First Boulevard sees the wealth gap that continues to grow within the U.S. and wants to build a digital banking platform that addresses the systemic and structural challenges that face this population while enabling Black Americans and allies to invest in the community,” she said.

The company also recently announced a partnership with Visa, under which First Boulevard will be first to pilot Visa’s new suite of crypto APIs. First Boulevard will also launch a First Boulevard Visa Debit card.

First Boulevard is one of several digital banks geared toward Black Americans that have emerged in recent months. Paybby, a digital bank for the black and brown communities, recently acquired Wicket, a neobank that uses AI and biometric technology to create a personalized experience for users. Hassan Miah, the CEO and founder of Paybby, said the bank’s goal is to be “the leading smart, digital bank for the Black and Brown communities.”

Paybby, which started by offering a bank account and a way to expedite PPP loans, will soon be adding a cryptocurrency savings account for the Black and Brown communities.   

“Black buying power is projected to grow to $1.8 trillion by 2024,” Miah said. “Brown buying power is over $2 trillion. Paybby wants to take a good portion of this multi-trillion dollar market and give it back to these communities.”

Last October, Greenwood raised $3 million in seed funding from private investors to build what it describes as “the first digital banking platform for Black and Latinx people and business owners.”

At the time, co-founder Ryan Glover, founder of Bounce TV network, said it was “no secret that traditional banks have failed the Black and Latinx community.”

Docyt raises $1.5M for its ML-based accounting automation platform

Accounting isn’t a topic that most people can get excited about — probably not even most accountants. But if you’re running any kind of business, there’s just no way around it. Santa Clara-based Docyt wants to make the life of small and medium business owners (and their accounting firms) a bit easier by using machine learning to handle a lot of the routine tasks around collecting financial data, digitizing receipts, categorization and — maybe most importantly — reconciliation.

The company today announced that it has raised a $1.5 million seed-extension round led by First Rays Venture Partners with participation from Morado Ventures and a group of angel investors. Docyt (pronounced “docket”) had previously raised a $2.2 million seed round from Morado Ventures, AME Cloud Ventures, Westwave Capital, Xplorer Capital, Tuesday and angel investors. The company plans to use the new investment to accelerate its customer growth.

At first glance, it may seem like Docyt competes with the likes of QuickBooks, which is pretty much the de facto standard for small business accounting. But Docyt co-founder and CTO Sugam Pandey tells me that he thinks of the service as a partner to the likes of QuickBooks.

Image Credits: Docyt

“Docyt is a product for the small business owners who find accounting very complex, who are very experienced on how to run and grow their business, but not really an expert in accounting. At the same time, businesses who are graduating out of QuickBooks — small business owners sometimes become midsized enterprises as well — [ … ] they start growing out of their accounting systems like QuickBooks and looking for more sophisticated systems like NetSuite and Sage. And Docyt fits in in that space as well, extending the life of QuickBooks for such business owners so they don’t have to change their systems.”

In its earliest days, Docyt was a secure document sharing platform with a focus on mobile. Some of this is still in the company’s DNA, with its focus on being able to pull in financial documents and then reconciling that with a business’ bank transactions. While other systems may put the emphasis on transaction data, Docyt’s emphasis is on documents. That means you can forward an emailed receipt to the service, for example, and it can automatically attach this to a financial transaction from your credit card or bank statement (the service uses Plaid to pull in this data).

Image Credits: Docyt

For new transactions, you sometimes have to train the system by entering some of this information by hand, but over time, Docyt should be able to do most of this automatically and then sync your data with QuickBooks.

“Docyt is the first company to apply AI across the entire accounting stack,” said Amit Sridharan, founding general partner at First Rays Venture Partners. “Docyt software’s AI-powered data extraction, auto categorization and auto reconciliation is unparalleled. It’s an enterprise-level, powerful solution that’s affordable and accessible to small and medium businesses.”

Foresite Capital raises $969 million fund to invest in healthcare startups across all stages of growth

Health and life science specialist investment firm Foresite Capital has raised a new fund, its fifth to date, totally $969 million in commitments from LPs. This is the firm’s largest fund to date, and was oversubscribed relative to its original target according to fund CEO and founder Dr. Jim Tananbaum, who told me that while the fundraising process started out slow in the early months of the pandemic, it gained steam quickly starting around last fall and ultimately exceeded expectations.

This latest fund actually makes up two separate investment vehicles, Foresite Capital Fund V, and Foresite Capital Opportunity Fund V, but Tananbaum says that the money will be used to fuel investments in line with its existing approach, which includes companies ranging from early- to late-stage, and everything in between. Foresite’s approach is designed to help it be uniquely positioned to shepherd companies from founding (they also have a company-building incubator) all the way to public market exit – and even beyond. Tananbaum said that they’re also very interested in coming in later to startups they have have missed out on at earlier stages of their growth, however.

Image Credits: Foresite Capital

“We can also come into a later situation that’s competitive with a number of hedge funds, and bring something unique to the table, because we have all these value added resources that we used to start companies,” Tananbaum said. “So we have a competitive advantage for later stage deals, and we have a competitive advantage for early stage deals, by virtue of being able to function at a high level in the capital markets.”

Foresite’s other advantage, according to Tananbaum, is that it has long focused on the intersection of traditional tech business mechanics and biotech. That approach has especially paid off in recent years, he says, since the gap between the two continues to narrow.

“We’ve just had this enormous believe that technology, and tools and data science, machine learning, biotechnology, biology, and genetics – they are going to come together,” he told me. “There hasn’t been an organization out there that really speaks both languages well for entrepreneurs, and knows how to bring that diverse set of people together. So that’s what we specialized i,n and we have a lot of resources and a lot of cross-lingual resources, so that techies that can talk to biotechies, and biotechies can talk to techies.”

Foresite extended this approach to company formation with the creation of Foresite Labs, an incubation platform that it spun up in October 2019 to leverage this experience at the earliest possible stage of startup founding. It’s run by Dr. Vik Bajaj, who was previously co-founder and Chief Science Officer of Alphabet’s Verily health sciences enterprise.

“What’s going on, or last couple decades, is that the innovation cycles are getting faster and faster,” Tananbaum said. “So and then at some point, the people that are having the really big wins on the public side are saying, ‘Well, these really big wins are being driven by innovation, and by quality science, so let’s go a little bit more upstream on the quality science.'”

That has combined with shorter and shorter healthcare product development cycles, he added, aided by general improvements in technology. Tananbaum pointed out that when he began Foresite in 2011, even, the time horizons for returns on healthcare investments were significantly longer, and at the outside edge of the tolerances of venture economics. Now, however, they’re much closer to those found in the general tech startup ecosystem, even in the case of fundamental scientific breakthroughs.

CAMBRIDGE – DECEMBER 1: Stephanie Chandler, Relay Therapeutics Office Manager, demonstrates how she and her fellow co-workers at the company administer their own COVID tests inside the COVID testing room at Relay Therapeutics in Cambridge, MA on Dec. 1, 2021. The cancer treatment development company converted its coat room into a room where employees get tested once a week. All 100+employees have been back in the office as a result of regular testing. Relay is a Foresite portfolio company. (Photo by Jessica Rinaldi/The Boston Globe via Getty Images)

“Basically, you’re seeing people now really look at biotech in general, in the same kind of way that you would look at a tech company,” he said. “There are these tech metrics that now also apply in biotech, about adoption velocity, other other things that may not exactly equate to immediate revenue, but give you all the core material that usually works over time.”

Overall, Foresite’s investment thesis focuses on funding companies in three areas – therapeutics at the clinical stage, infrastructure focused on automation and data generation, and what Tananbaum calls “individualized care.” All three are part of a continuum in the tech-enabled healthcare end state that he envisions, ultimately resulting “a world where we’re able to, at the individual level, help someone understand what their predispositions are to disease development.” That, Tananbaum suggests, will result in a transformation of this kind of targeted care into an everyday consumer experience – in the same way tech in general has taken previously specialist functions and abilities, and made them generally available to the public at large.

Former top Paytm exec is building his own financial services startup

The executive who built the financial services boutique for Paytm, India’s most valuable startup, from the ground is ready to do something similar all over again.

Pravin Jadhav, the former chief executive of Paytm Money, revealed on Thursday his own startup, Raise Financial Services.

This time, Jadhav — under whose leadership, Paytm had amassed over 6 million Money customers — is focusing on serving a different set of the population.

Hundreds of millions of users in India today don’t have access to financial services. They don’t have a credit card, banks don’t lend to them, and they have never purchased an insurance cover or invested in mutual funds or stocks.

Scores of large firms and startups in India today are attempting to reach these users by building an underwriting technology that can use alternative data to determine an applicant’s credit worthiness. It’s a tough and capital intensive business, built on pillars of uncertainties, assumptions and hopes.

In an interview with TechCrunch, Jadhav said Raise Financial Services is aimed at customers living in metro, tier 1 and tier 2 cities (so very much in and around urban cities). “They want financial products, they are literate about these products, but they are not being served the way they should be,” he said.

Pravin Jadhav, left, poses with Paytm founder and CEO Vijay Shekhar Sharma. Jadhav left Paytm last year.

He said his new startup will offer products across financial services including investing, financing, insurance, wealth, and payments. “Just not doing the banking part, as I believe that is more of an infrastructure play,” he said.

“The idea is to offer great exceptional products that are not being offered by anyone. Number 2: Focus a lot on tech-driven distribution. And third is that today the quality of customer service experience is bad across the market. So we are trying to solve that,” he said. “Over time, we will try to stitch all of this together.”

Jadhav also announced he has raised a Seed financing round. He did not disclose the amount, but revealed enough high-profile names, including: Kunal Shah (Cred), Kalyan Krishnamurthi (Flipkart), Amod Malviya and Sujeet Kumar (Udaan), Sameer Nigam and Rahul Chari (PhonePe), Amrish Rau (Pine Labs, Citrus Pay), Sandeep Tandon (Freecharge), Jitendra Gupta (Jupiter), Girish Mathrubootham (Freshworks), Nischal Shetty (WazirX), Kuldeep Dhankar (Clevertap), Sreevatsa Prabhakar (Servify), and Amit Bhor (Walnut).

Jadhav himself is also investing, and venture investor Mirae Asset Venture is leading the round, with participation from Multi-Act Private Equity, Blume Ventures (via its Founder’s Fund) and US based early-stage investor Social Leverage, for which it is the first investment in India.

Ashish Dave, CEO of Mirae Asset Venture’s India business, told TechCrunch that even though he had known Jadhav, it was listening to him at various Clubhouse sessions that prompted him to reach out to Jadhav.

Jadhav said users can expect the startup’s first product to be live by the end of the year. (TechCrunch understands it’s shipping much sooner. Raise Financial Services’ offerings will have some similarities with SoFi and Goldman Sachs’ Marcus.)

Five takeaways from Coinbase’s S-1

The Coinbase S-1 is out! And hot damn, did the company have a good fourth quarter.

TechCrunch has a first look at the company’s headline numbers. But in case you’ve been busy, the key things to understand are that Coinbase was an impressive company in 2019 with more than a half-billion in revenue and a modest net loss. In 2020, the company grew sharply to more than $1.2 billion in revenue, providing it with lots of net income.


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The company’s Q4 2020 was about as big as its entire 2019 in revenue terms, albeit much more profitable because the sum was concentrated in a single quarter instead of spread out over four.

However, beyond the top-level numbers are a host of details to explore. I want to dig more deeply into Coinbase’s user numbers, its asset mix, its growing subscription incomes, its competitive landscape and who owns what in the company. At the end, we’ll riff on a chart that discusses the correlation between crypto assets and the stock market, just for fun.

Sound good? You can read along in the S-1 here if you want, and I will provide page numbers as we go.

Inside Coinbase’s direct listing

To make things simpler, we’ll frame our digging in the form of questions, starting with: How many users did Coinbase need to generate its huge 2020 revenue gains?

The answer: not as many as I expected. In 2019, Coinbase generated $533.7 million from what it describes as 1 million “Monthly Transacting Users” (page 14). That works out to $533.7 in revenue per MTU for the year.

In 2020, Coinbase generated $1.28 billion in revenue off of 2.8 million MTUs, which works out to around $457 apiece during the year. That’s a bit lower, but not terribly so. And given that the company’s transaction margins ranged in the mid-80s percent during much of 2020, each Coinbase active trader was still quite valuable, even at a lower revenue point.

As we noted in our first look at the company’s economics, Coinbase’s metrics are highly variable. Its MTU figure is no exception. Observe the following chart from its S-1 filing (page 95):

Coinbase’s Q1 2018 was nearly as popular in MTU terms as its final quarter of 2020. And from that point in time, the company’s MTUs fell 70 percent to its Q1 2019 nadir. That’s a lot of variance.

The company itself notes in its filing that “MTUs have historically been correlated with both the price of Bitcoin and Crypto Asset Volatility,” though the company does point out that it expects such correlations to diminish over time.

The answer to our question is that it only takes a few million MTUs for Coinbase to be a huge business. But the other side of that point is that Coinbase has shown twice in two years (2018, 2019) that the number of traders on its platform can decline.

What assets do Coinbase users hold? This is a question that I am sure many of you crypto enthusiasts have. But first, what does the Coinbase user asset base look like? Like this, historically (page 96):

Holy shit, right? The chart shows two things. First, the rapid appreciation of cryptocurrencies overall, which you can spy in the upward kick of the black line. And then the blue bars show how the assets on Coinbase’s platform grew from $17 billion at the start of 2020 to $90 billion by year’s end.