Tag: fintech

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Inside Stripe’s latest moves

Welcome back to The Interchange! If you want this in your inbox, sign up here. While there is always a lot going on in the world of fintech, this week felt a little subdued overall — at least when it came to funding rounds. But there was definitely still other fintech news to cover, and we’ll dive into it here.

Stripe has been busy

Stripe made headlines more than once this week as it acquired a (non-fintech!) startup and announced an expansion of its issuing product into credit.

In each case, I covered the news exclusively, which helped give me some insight into the fintech giant’s motivations behind each move.

Let’s start with the acquisition. Stripe picked up Okay, a startup that developed a low-code analytics software to help engineering leaders better understand how their teams are performing. Okay is a small startup, with just seven employees, that over time had raised $6.6 million from investors such as Sequoia Capital and Kleiner Perkins after graduating from Y Combinator’s Winter 2020 cohort. I didn’t talk to Stripe directly about the deal but Okay’s co-founder and CEO Antoine Boulanger told me that “by increasing engineering effectiveness, Stripe will be better positioned to attract and retain talented engineers.” It also presumably will be in a better position to compete in an increasingly crowded space.

In other words, Stripe deciding to acquire a startup that helps engineering leaders build performance dashboards to gauge how their teams are doing feels like the company is very serious about making sure its own engineering team is working effectively enough to not only move faster, but also be more productive. I found it interesting that one of Okay’s customers is Stripe competitor Plaid. Or I should say was. Of course, now Okay will be folded into Stripe’s engineering team and will no longer serve outside customers.

Stripe also announced this week its plans to give companies the ability to create and distribute virtual or physical charge cards that allow their customers to spend on credit rather than using the funds in their accounts.

“Among our suite of products, Issuing [which it launched in 2018] has been doing really, really well,” Denise Ho, Stripe’s head of product for BaaS, told TechCrunch. “And the No. 1 top demand within Issuing has been the ability for Stripe to enable our platforms to offer credit to their users.”

This has a twofold benefit for Stripe — giving it a new revenue stream as well as the option to offer new financing capabilities to their customers “with little additional operational cost,” Stripe touts. It also gives companies like Ramp and Karat, among others, the ability to give their clients access to credit at a time when credit may not be as easy to come by.

Ho also told me that Stripe has worked hard to make sure all its products work well together. For example, she said, its Issuing product is built on top of its Connect offering so customers “don’t have to KYC every single [one] of the thousands of businesses on their platform.”

“And when these businesses need to pay you back for, say, the couple [grand] they spent last month, they can use Stripe Invoicing and Stripe payments. And then we have the ability to move the money from the payments balance into issuing.” One Twitter user speculated that the expansion might mean that Stripe “is going towards becoming a bank.” While we don’t know about that, we can say that Stripe’s efforts to become a one-stop-shop for its customers appear to be advancing.

Stripe, which is one of the world’s highest-valued private companies, has had some struggles as the payments space in which it operates only continues to get more competitive and the IPO market has dried up. In the past year alone, companies such as Plaid and Finix have released competing products, for example. And Stripe, which has yet to go public via a long-awaited IPO, earlier this year raised $6.5 billion at a $50 billion valuation after being valued at $95 billion in March of 2021. Stripe’s latest raise took place months after the company laid off about 1,120 workers, or 14% of its workforce, in November of 2022 after saying it had “overhired for the world we’re in.”

On that note, CB Insights pointed out in an email this past week that despite laying off 14% of its staff last year, Stripe still has nearly 2x the employees of Adyen while its valuation ($50 billion as of March 2023) is essentially equivalent to Adyen’s market cap. — Mary Ann

Close up macro color image depicting an abstract view of a collection of debit and credit cards and numeric digits.

Image Credits: Getty Images

Spend management update

Another week, another spend management company providing milestones.

This past week, two players in the space provided us with some business updates worth noting.

For one, Brex shared that two of its products — Empower, Brex’s spend management platform, and Brex business accounts — “have each achieved $100 million in ARR.”

When TC+ editor and my Equity podcast co-host Alex Wilhelm and I pressed Brex on what this meant exactly, a spokesperson told us the following via email:

  1. ARR in this case means annual recurring revenue.
  2. To clarify, it’s revenue that is contracted on Empower, which includes software and interchange from committed spend.
  3. The revenue in regards to Brex business accounts is from its deposits where the company is “paid by banks and asset managers for providing funding / assets under management. That is highly recurring as customers rarely move their funds.”

The company added that since launching Empower last year, Brex has signed on companies such as Coinbase, Indeed, SeatGeek, Lemonade and DoorDash, among others. It also said that its business accounts, which it describes as cash management accounts with a suite of money movement tools across ACH, wires and checks, have seen “rapid growth due to the ease of use and up to $6M in FDIC insurance coverage.”

You may recall that Brex also recently announced it was going global.

It’s not the only one.

Mesh Payments this past week also announced an expansion to support global multinational businesses operating in Europe, the United Kingdom and Asia in local currencies. The company believes that by doing so, it can work to solve “a major pain point companies encounter when managing spend for remote workforces and across multiple entities.”

I hopped on a call with Mesh co-founder and CEO Oded Zehavi, who shared that the expansion comes during a period in which the fintech company saw its payments volume (and revenue as a result) climb by 3x compared to the first half of 2022. He was candid about the fact that while that volume came both from existing and new customers, the company could definitely see a decline in spending from existing clients — but was making up for that by continuing to sign on new ones, including an unnamed Fortune 100 company.

Mesh aims to serve mid-market and enterprise companies, and Zehavi said the expansion into Europe, the U.K. and Asia is just the beginning as the company continues to explore other territories. Acknowledging that it is challenging to serve global customers, he said that in some cases Mesh partners with local banks and with other fintechs that serve multiple territories.

He was also adamant about the fact that disruption of this space still has a long way to go.

“We just came from a Gartner event and I will not exaggerate and say that more than 90% of the companies that attended this event are using Concur, and don’t use any one of the new players in this space,” Zehavi said. “So it means that the space is still far from being disrupted.”

globe and dollars

Image Credits: PonyWang (opens in a new window) / Getty Images

City Spotlight: Atlanta

On June 7, TechCrunch is going to (virtually) be in Atlanta. We have a slate of amazing programming planned, including the mayor himself, Andre Dickens. If you are an early-stage Atlanta-based founder, apply to pitch to our panel of guest investors/judges for our live pitching competition. The winner gets a free booth at TechCrunch Disrupt this year to exhibit their company in our startup alley. Register here to tune in to the event.

Weekly News

TC+ editor Alex Wilhelm did a couple of fintech-related deep dives this week, including his unique take on Klarna’s first-quarter earnings that led him to conclude that while “a few good quarters do not make for a comeback…there’s lots to like about the company best known for its buy now, pay later services.” He also dug into U.K.-based neobank Monzo’s fiscal 2023 results and “what its recent profitability tells us about its performance this past year (spoiler alert: good things).” Alex also took that opportunity to make some other observations on other neobanks worth $1 billion or more. As he put it, “We are compiling an IPO list in our heads, after all.”

This week, Mary Ann caught up with personal finance guru Suze Orman, who made her debut into the startup world about a year ago with SecureSave, a company that enables employers to offer employees sponsored emergency savings accounts. Mary Ann and Suze discussed a number of hard-hitting topics, including why SecureSave isn’t like its competitors (it doesn’t try to go after all your money) and how Americans aren’t saving enough (people like to spend — spoiler!). Oh, and we found out her weapon for success. There was more fintech talk on Friday’s episode of the Equity podcast as well. Check it out here.

As Ivan Mehta reports, Amazon may have gotten out of the food delivery business in India but recognizes that dining is big business. The company is now testing dine-in payments at select restaurants. Read more.

Affirm has a partnership with FIS’ Worldpay that enables Worldpay merchants to offer Affirm’s Adaptive Checkout product. Eligible consumers can, in a few clicks, sign up for biweekly and monthly payment options. Check out TechCrunch’s coverage of Affirm, including what happened with Affirm’s earnings earlier this year and the buy now, pay later boom.

Speaking of FIS, rumor has it that the company is acquiring BaaS platform Bond, according to fellow fintech enthusiast Jason Mikula.

Other headlines

JPMorgan debuts payments partner marketplace

How a $13 billion fintech that angered Jamie Dimon won over banks

Kasisto launches KAI-GPT, the first banking industry-specific large language model

Adyen launches payout services to provide faster global payments

Fundings and M&A

Seen on TechCrunch

Revolut alums raise millions for Vault, a startup offering banking services to Canadian SMBs

Olé Life wants to make buying life insurance for Latin Americans easier

Vartana lands a $20M investment to scale its sales closing platform

NomuPay, formed from pieces of failed fintech Wirecard, says it’s raised $53.6M for cross-border payments

Hostaway unlocks $175M to expand its vacation rental management platform

Qflow raises $9.1M to track construction receipts, making it easier to de-carbonize

Taxfix, the $1B German accounting startup, slashes 120 jobs amid funding crunch

And elsewhere

Mexican fintech unicorn Stori secures $50M in debt capital

Fintech startup from JPMorgan alum raises $23.5M

Brazilian health insurance company Sami secures $18M

ICYMI fintech funding round-up: Ballerine, Trébol & more

RealBlocks raises additional $10M in extension of Series A financing

SVB alum raises $7M for new cash management startup

Image Credits: Bryce Durbin

Inside Stripe’s latest moves by Christine Hall originally published on TechCrunch

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Okay startup names and why fintech is rebounding

Hello, and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines.

Mary Ann and Alex were a busy pair this week, so much so that they tagged in Dominic-Madori Davis from the TechCrunch+ crew to help out.

Before we get into what we covered on the episode, Equity is holding its annual listeners survey. If you listen to the pod, we’d love to hear from you. The questions are here, and you have our thanks.

Here’s the show rundown:

TC City Spotlight: Atlanta

Whew, and with that, we are done for the week! Chat with you Monday!

For episode transcripts and more, head to Equity’s Simplecast website. 

Equity drops at 7 a.m. PT every Monday, Wednesday and Friday, so subscribe to us on Apple Podcasts, Overcast, Spotify and all the casts. TechCrunch also has a great show on crypto, a show that interviews founders, one that details how our stories come together and more!

Okay startup names and why fintech is rebounding by Alex Wilhelm originally published on TechCrunch

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Fintech giant Stripe is getting into the credit game

Stripe wants to make it easier for businesses to access credit.

The private financial infrastructure giant announced a new charge card program today from Stripe Issuing, its commercial card issuing product, Denise Ho, head of product for BaaS at Stripe, told TechCrunch exclusively.

The company originally launched its Issuing product in 2018 and since then, it’s helped companies such as Shopify and Ramp issue more than 100 million cards in the U.S., the United Kingdom and the European Union. The product is today one of Stripe’s fastest-growing, Ho said – supporting half a million transactions a day. Fintechs like Klarna “build entire businesses on it,” the company claims. 

Klarna’s Q1 results show that the fintech unicorn’s turnaround is in full swing

Previously, Stripe-issued cards could only be used to spend money from a prefunded account. Its expansion into charge cards, according to Ho, will companies the ability to create and distribute virtual or physical charge cards that allow their customers to spend on credit rather than using the funds in their accounts. 

“Among our suite of products, Issuing has been doing really, really well,” Ho told TechCrunch. “And the No. 1 top demand within issuing has been the ability for Stripe to enable our platforms to offer credit to their users.”

This has a twofold benefit for Stripe – giving it a new revenue stream as well as the option to offer new financing capabilities to their customers “with little additional operational cost,” Stripe touts. (Operational efficiency is in vogue, after all.)

For example, platforms that use Stripe Connect offering can white label products from Stripe and provide a range of embedded financial services, such as financial accounts, working capital loans and now charge cards as well, Ho said.

Further, she added, Stripe Issuing provides the core components of a charge card program — such as funds flows, network connections, printing, and integration APIs — and then aims to “streamline” all the necessary compliance, bank partnerships and ledgering. 

Ramp, Emburse, Karat and Coast are among the current users of the charge card program, which is available in beta in the US. In the coming months, Stripe will launch charge card programs in the EU and the UK.

“In the U.S., the banks are the ones that have been our sponsor … and that’s regulated,” Ho explained. “And because you’re letting the small businesses spend, that is a form of lending so that lending compliance has to come from the bank.”

For its part, she said Stripe is partnering with startups to help guide them through the process and help provide the necessary compliance and risk oversight so that they don’t get in over their heads.

When it comes to underwriting, Ho said that Stripe has received feedback that its clients ultimately want to own the underwriting decision.

“What we do is we help them put together the set of policies and ensure that these policies are actually compliant,” she said. “So we offer both sort of flexibility and the control but with guardrails.”

Over time, Ho said its clients may want “more modules” to do their own underwriting so that’s something Stripe will work on over time as it matures its offering.

Anyone can sign up for the new program, she said, even if they are not an existing Stripe user.

For its part, Stripe will make money off of interchange fees so as customers’ volume grows and users spend more, Stripe will earn more. There will also be compliance fees associated with the program.

On May 31, TechCrunch reported exclusively on Stripe’s acquisition of Okay, a startup that developed a low-code analytics software to help engineering leaders better understand how their teams are performing.

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Got a news tip or inside information about a topic we covered? We’d love to hear from you. You can reach me at maryann@techcrunch.com. Or you can drop us a note at tips@techcrunch.com. Happy to respect anonymity requests. 

Fintech giant Stripe is getting into the credit game by Mary Ann Azevedo originally published on TechCrunch

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Revolut alums raise millions for Vault, a startup offering banking services to Canadian SMBs

Vault, an online banking platform serving small-to-medium sized business (SMBs) in Canada, is launching to the public today after raising $3.7 million in seed funding.

Founded in late 2021 by Saud Aziz and Ahmed Shafik (who previously worked at sunday, Revolut and Koho), Toronto, Ontario-based Vault says its mission is to “revolutionize” the banking experience for Canadian entrepreneurs and SMBs by giving them a place “to manage their money more efficiently and effectively while saving on costly banking fees.”

Vault touts the ability to sign up customers — in this case entrepreneurs and business owners — “quickly,” or in less than five minutes.

While startups offering banking services to SMBs abound in the U.S, they are far less common in Canada, Shafik told TechCrunch. His and Aziz’s parents were small business owners, so the pair saw firsthand the challenges they faced when it came to managing their finances.

“In Canada, there are five big banks, so many business owners have to deal with antiquated processes such as going to a branch to make a $50,000 wire transfer, plus paying an exorbitant amount of fees,” he added. “What you have on the U.S. side with Mercury, Brex and Ramp — it just doesn’t exist here. People are used to going to the branch, calling a branch manager just to deal with daily banking operations.”

Shafik acknowledges there are products that exist for specific use cases. For example, Canadians have access to TransferWise to make transfers, or credit unions if they want to take out a credit card or a loan. But for banking in general, the options are limited.

“It took us about a week and a half just to open our business account,” said Shafik. “In Canada, we’re probably three to five years behind.”

Vault’s customers, the startup claims, pay no monthly or annual fees and don’t have to carry minimum balances. Features include the ability to have local accounts in CAD, USD, GBP and EUR to hold, send and receive funds; a real-time currency exchange that it claims is “10x cheaper” than the big banks; a multi-currency Mastercard corporate card with 1% cashback; spend management for employees; free domestic and international bank transfers to 180 countries and accounting integrations “to automate bookkeeping.”

Vault also announced the ability to purchase investment products, including GICs (guaranteed investment certificates) that it says will earn up to 5.00%. Its goal is to expand its offerings to include lending, savings products, payment automation and more complex FX products later this year. 

Gradient Ventures and Fin Capital co-led Vault’s US$3.7 million seed raise, which closed last year and included participation from The Fintech Fund, Exponent Capital and Thirdbase Capital. Angel investors in the company include founders and executives of companies such as PayPal, Google Pay, Affirm, BNY Mellon, Airbnb, Coinbase, Revolut and Robinhood. 

Vault says it partners with regulated financial institutions and that its customers can see which financial institution is holding their funds via their accounts page. Its Mastercard card is issued by Peoples Trust Company.

Building infrastructure from the ground up

Shafik said that Vault spent its first year just building out the infrastructure for the card transfers and account products in house.

“Infrastructure for fintech is essentially nonexistent here [in Canada],” he told TechCrunch. “We don’t have products to build on top of. You have to build the infrastructure in house, do the diligence with banking partners to come up with compliance programs and launch from scratch.”

Vault targets all industries, Shafik said, and conducted a pilot initially with about 25 companies. Now, he said, the startup is “growing into the 100s per month.” Companies ranging from two employees up to 100 are users, he said with the company’s sweet spot so far being in the “up to 100 employee mark.”

Vault co-founders Ahmed Shafik and Saud Aziz. Image Credits: Vault

When it comes to revenue, Vault says it makes money off interchange and transaction fees.

“We’re excited honestly to come out of the gate with a product that is ready to replace your entire stack from day one, rather than come up with just one product and build over time,” Shafik said. “The reception from Canadian companies has been great, where they’re either using us as a primary account or at least trying us for a vertical.”

Zach Bratun-Glennon, founder and general partner at Gradient Ventures, believes that Canada “is a market with unique financial service and technology needs.”

He wrote via email: “It has a high volume of cross-border transactions, a large number of multinational and distributed employee bases, and is a growing hub for innovation.”

Despite the opportunity, Bratun-Glennon also notes that Canadian financial services have been slow to adopt new technologies, compared to larger markets like the U.S. and the EU. 

“Most businesses rely on traditional banks or a few niche fintech solutions. Vault’s platform can replace a business’ entire financial stack,” he added. “One of Vault’s standout features is its multi-currency functionality. This allows businesses to make and receive payments in multiple currencies, without having to worry about high foreign exchange rates or excessive transfer fees.”

Want more fintech news in your inbox? Sign up here.

Got a news tip or inside information about a topic we covered? We’d love to hear from you. You can reach me at maryann@techcrunch.com. Or you can drop us a note at tips@techcrunch.com. Happy to respect anonymity requests. 

Revolut alums raise millions for Vault, a startup offering banking services to Canadian SMBs by Mary Ann Azevedo originally published on TechCrunch

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Neobanks should take heart from Monzo’s performance in 2022

UK-based neobank Monzo has had quite the bittersweet year. The company’s full-year financial results for 2022 paint a picture of a business that’s growing rapidly, though at the cost of sticky, large losses.

However, it’s not all bad news: Monzo has been cash-flow positive since October 2022, and it “reached profitability” after the end of its most recent fiscal year.

The Exchange explores startups, markets and money.

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Monzo has been through a few tumultuous years.

When COVID struck, Monzo laid off staff, closed offices, raised a down round and saw founder Tom Blomfield leave the company. After seeing its valuation fall to a post-money price of £1.3 billion in 2020, however, the company bounced back. In late 2021, it raised a $500 million round at a pre-money valuation of $4 billion, providing it with a massive cash injection and raising the value of its efforts many times.

Since then, Monzo has continued to grow, and now that it is both cash-flow positive and profitable, it can fund its own efforts. That puts it in good company, joining Starling, another UK-based neobank that is also profitable and growing thanks to rising interest rates.

Higher interest rates are fostering a fintech comeback story

Similar themes are at work at Monzo. Today, we’re diving into the company’s fiscal 2023 results and considering what its recent profitability tells us about its performance this past year (spoiler alert: good things). We’ll close with a few notes on other neobanks worth $1 billion or more. We are compiling an IPO list in our heads, after all. To work!

Yet another benefactor of interest rates

Here are Monzo’s key results, extracted from its annual report:

  • Monzo’s net operating income, defined as revenues less credit loss-related expenses, increased by 88% to £214.5 million from a year earlier.
  • Expenses (staffing, depreciation and impairment, and other operating costs) also rose 42% to £330.9 million in the year.
  • The company’s rising cost basis weighed on its larger revenues, leading to a loss of £116.3 million, narrowing 2% from its fiscal 2022 loss of £119 million.

How did the company grow so much? Its net fees and commissions rose 64% to £132.9 million from a year earlier, as its customers spent more, and its Monzo Plus, Premium and Business subscription efforts drew more customers. The biggest driver by far, however, was interest incomes. Net interest income rose a whopping 382% to £164.2 million from fiscal 2022.

But that growth did not come cheap: Anticipated credit loss expenses skyrocketed to £101.2 million in FY 2023 from only £14 million a year earlier.

Monzo’s vastly bigger loan book powered both this surge in interest incomes and credit loss provisions. According to its results, “total gross loans and advances to customers” expanded to £759.7 million in FY 2023 from £258.8 million in fiscal 2022.

Not all of Monzo’s interest income came from loans, though. The neobank also saw revenue from “cash and balances at central banks” and “treasury assets” rise dramatically.

As Monzo detailed in the annual report (emphasis ours):

To safely optimise the mix of our balance sheet, maintain appropriate hedging and improve margins while retaining liquidity, we used some cash balances to invest in treasury assets and for customers to borrow from us. The increase in base rate from 0.5% to 4.0% in FY2023 resulted in interest on our cash balances increasing by £43.7m. The increase in rates and growth of our treasury portfolio to £2.7bn, resulted in treasury interest income also increasing by 1,125% to £29.4m (£2.4m in FY2022).

So here we have yet another example of a fintech company that’s benefiting from the high interest rate environment. Each company is slightly different, but they do share the core element of rising interest-related incomes in recent quarters.

Finally, considering that Monzo managed to get into the black after the end of fiscal 2023, we can infer that the company was working towards profitability throughout the year. If we had a quarterly breakdown of its results, I expect that we would see sequential improvement as the company’s FY 2023 progressed.

Now’s a good time to be a neobank

After seeing how Robinhood and Coinbase benefited from rising interest rates and considering Starling’s performance, we had a hunch that the new interest rate climate was going to prove a boon for fintechs of various stripes. With Monzo’s results, we now have enough data to be confident in our general outlook.

We can see some of our thesis at work in Nubank’s results. The Latin American neobank, worth more than $30 billion today, had this to share in its most recent financial report (emphasis ours):

Interest Income and Gains (Losses) on Financial Instruments increased 103% YoY, or 105% YoY FXN, to $1,255.5 million in Q1’23. The increase reflected mainly higher three factors: (1) higher interest income in the consumer finance portfolio, associated with the ongoing expansion of both personal loans and credit cards; (2) credit mix, mainly associated with the increase of installments with interest within the credit card portfolio; and (3) the continuous rise in Brazil’s interest rates (the interbank deposit rate or “CDI”) which accumulated 3.21% quarterly in Q1’23 versus 2.42% quarterly in Q1’22.

So we’re seeing a positive impact on neobank performance in the UK and Brazil, and likely in the United States as well.

Which neobanks should we expect to benefit similarly? The good news could extend to Chime, Varo and Current in the U.S., to pick a few. We expect that UK’s Revolut and Monese would enjoy similar gains. N26 in the EU is another obvious name to keep in mind.

Is the economy strong enough for more neobank IPOs? Sure, but with the fintech valuations still so depressed, we doubt that any new IPO filings will drop anytime soon. Still, Monzo’s results are one more ray of warm sunshine for this particular subsector of the beleaguered fintech market. And in 2023, all bits of good news are welcome.

Neobanks should take heart from Monzo’s performance in 2022 by Alex Wilhelm originally published on TechCrunch

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Okay, which analyzes engineers’ productivity, sells to Stripe

Fintech giant Stripe has acquired Okay, a startup that developed a low-code analytics software to help engineering leaders better understand how their teams are performing, the companies told TechCrunch exclusively.

Founded in 2019, Okay participated in Y Combinator’s Winter 2020 cohort before going on to raise a total of $6.6 million in capital from the likes of Sequoia and Kleiner Perkins. Angel investors include executives from Plaid, Brex and Instacart, along with Stripe CEO Patrick Collison.

Financial terms of the deal, which marks Stripe’s first acquisition since it bought card reader provider BBPOS in January of 2022, were not disclosed.

Co-founders Antoine Boulanger (CEO) and Tomas Barreto (CTO) met while working at Box — Boulanger as a senior director of engineering and Barreto as a VP of engineering. Prior to starting Okay, Boulanger was working as a senior engineering manager at Google and Barreto was a vice president of product and engineering at Checkr.

The pair told TechCrunch in 2020 that in the process of building out a suite of in-house tools designed to help managers at Box understand their teams better, they realized the opportunity for a subscription toolset that could help managers across companies. For the most part, Boulanger says that Okay was designed to largely replace tools built in-house as well.

Getting a picture of an engineering team’s productivity involves plugging into Okay’s toolsets and gathering data into a digestible feed. The dashboards can be built on top of developer tools’ data such as GitHub and Jira.

In a nutshell, Okay was aimed at giving companies a way to build engineering effectiveness dashboards on top of developer tools.

“We use metrics and data to make an engineering team more efficient and effective,” Boulanger told TechCrunch in an interview. “It looks very much like [analytics software] Mixpanel or Amplitude but applied to engineering work. The difference is that we are very focused on finding the bottlenecks that are affecting engineers on their day-to day-activities — more on their inputs…rather than outputs, like lines of codes.”

Of course now that it has been acquired by Stripe, Okay will transition out of serving its other customers — which in the past have included Brex, Plaid and Intercom — to exclusively serving Stripe. Okay had seven employees prior to the acquisition. The co-founders declined to share if all seven employees would be joining Stripe.

“Our approach…aligns with Stripe engineering values: by increasing engineering effectiveness, Stripe will be better positioned to attract and retain talented engineers,” Boulanger said.

While Okay would not share any recent revenue metrics, the company told TechCrunch in February of 2022 that it had seen both its revenue and customer base grow around 10 times, including adding on customers such as Sourcegraph and mParticle. 

It was while pitching Stripe in 2022 that the small startup “really hit it off with the engineering leaders, and “from there, it evolved into more of an acquisition discussion,” said Boulander.

As a SaaS company, Okay made money by selling subscriptions to its software.

“Stripe was the kind of customer we served,” Boulanger said. “They were usually companies in the pre-IPO phase with hundreds to thousands of engineers where the manager wanted to start tracking what others are doing, and looking for tools to help with decision-making.”

Today, Okay is being folded into Stripe’s engineering department.

Boulanger said that prior to this acquisition, Okay had regular conversations with other potential acquirers but concluded that “Stripe was really special.”

Stripe, which is one of the world’s highest-valued private companies, has had some struggles as the payments space in which it operates only continues to get more competitive and the IPO market has dried up. In the past year alone, companies such as Plaid and Finix have released competing products, for example. And Stripe, which has yet to go public via a long-awaited IPO, earlier this year raised $6.5 billion at a $50 billion valuation after being valued at $95 billion in March of 2021. Stripe’s latest raise took place months after the company laid off about 1,120 workers, or 14% of its workforce, in November of 2022 after saying it had “overhired for the world we’re in.”

Stripe declined to comment on its acquisition of Okay, outside of confirming that it had taken place.

Okay, which analyzes engineers’ productivity, sells to Stripe by Mary Ann Azevedo originally published on TechCrunch

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SecureSave’s secret weapon: Suze Orman

Hello, and welcome back to Equity, a podcast about the business of startups, where we unpack the numbers and nuance behind the headlines.

This is our Wednesday show, where we niche down to a single person, think about their work and unpack the rest. This week, Mary Ann hopped on the mic with number one New York Times best selling author, producer, personal finance thought leader, and host of the Women & Money podcast, Suze Orman. We’re following up on Suze’s not-so-surprising-startup debut with SecureSave, what the company’s been up to and how Suze is thinking about protecting employees in today’s economy.

Here’s what we got into:

  • How little money many Americans have saved for emergencies and how SecureSave wants to change that
  • How inflation may be making it harder for people to save when they have less money to do so
  • We ended, as always, with a “lightning” round Q&A in which Suze revealed her secret weapon for success

For the startup founders listening, today is your last chance to apply to the Startup Battlefield 200 at TechCrunch Disrupt 2023! Fill out those applications while you still can, and Mary Ann and Alex will be back Friday to close out your week with a special guest.

For episode transcripts and more, head to Equity’s Simplecast website. 

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SecureSave’s secret weapon: Suze Orman by Theresa Loconsolo originally published on TechCrunch

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Vartana lands a $20M investment to scale its sales closing platform

Vartana, a business-to-business (B2B) sales closing and financing platform, today announced that it raised $20 million in a Series B funding round led by Activant Capital with participation from Mayfield and Audacious Ventures. The financing, which brings Vartana’s total raised to $39 million, will be put toward hiring and expanding the company’s product offerings, according to co-founder and CEO Kush Kella.

“Today, Vartana is specifically focused on expanding its product offering to solve the needs of B2B sellers in the software-embedded hardware space and the reseller space,” Kella told TechCrunch in an email interview. “These two types of companies require the most diverse sets of payment options which enable Vartana to continue supporting all companies in the software-as-a-service (SaaS) space.”

Vartana’s platform is designed to be used by sellers of B2B software, hardware and hardware paired with SaaS software. Vartana helps to manage tasks like contract tracking, payment terms and signature capture, accepting a range of different payment options (e.g. pay in full, deferred payment) and installment plans.

That might not sound incredibly sophisticated from a technical standpoint. But Andrew Steele, a partner at Activant, argues that Vartana’s making a dent in an industry — B2B sales in SaaS — that’s long been stuck in the dark ages.

“B2B commerce will never fully come online until you enable salespeople, who deliver the human touch for large, mission-critical transactions,” he said in an emailed statement. “That’s where Vartana comes in, bringing fintech to the sales suite to unlock a digital transaction.”

Vertana

Vartana’s platform is designed to facilitate B2B sales. Image Credits: Vartana

Consider, too, that B2B sellers in all industries have less time these days — and more pressure — to build relationships and close deals, making tech-forward approaches highly appealing. B2B buyers responding to a recent Gartner survey report spending exceedingly little time with sales reps, with the majority saying that they had only 17% of the total purchase journey in such interactions. Any given sales rep has roughly 5% of a customer’s total purchase time, the report found — and that’s on the high end.

Sellers on Vartana can send multiple quotes at one time and give buyers the flexibility to select which payment style works for them. Once a method has been selected, the buyer can e-sign the agreement from the web or mobile to finalize the deal.

On the capital marketplace side, Vartana-developed algorithms to normalize data, rate each buyer and extend debt financing offers. The platform matches buyer loan requests to a network of banks and lenders, allowing buyers to request funds and receive quotes in real time.

Vartana competes with startups including Ratio, Cashflow, Balance, Cacheflow and Gynger. But Kella doesn’t see them as direct competitors, pointing out that Vartana’s model hinges on delivering financing to buyers and targeting late-stage tech companies.

“In the typical B2B sales process, enterprise companies partner with national banks and large lenders to provide their customers the payment flexibility they need to perform business,” Kella said. “Unfortunately, this process involves lots of manual back and forth, paperwork, and negotiation for a vendor’s salespeople, which makes for a sub-par customer experience for the end software buyer. This is the process Vartana is digitizing.”

Vartana, which has around 51 employees, plans to double in size over the next 12 months.

Vartana lands a $20M investment to scale its sales closing platform by Kyle Wiggers originally published on TechCrunch

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NomuPay, formed from pieces of failed fintech Wirecard, says it’s raised $53.6M for cross-border payments

We still see regular updates on the calamitous fallout of the 2020 collapse of Wirecard, the now-insolvent fintech out of Germany that had built an elaborate house of cards on false accounting and murky business. Meanwhile, some of the assets from that operation, now under new ownership, appear to be in growth mode.

NomuPay — a unified payments business formed by VC Finch Capital out of its 2021 acquisitions of Wirecard assets, specifically local licenses, across Turkey and Asia Pacific (specifically Hong Kong, Malaysia, Philippines and Thailand), as well as separate businesses like Cardinity out of Lithuania (also known as Click2Sell) to cover European licenses — says that it has now raised $53.6 million, funding that it is using to continue expanding its operations, and building more integrations and other functionality into its API.

The $53.6 million is being called a Series A by the company in a press release, but in an interview with TechCrunch, CEO Peter Burridge described the figure as more of an aggregate of what NomuPay has raised to date: Finch’s initial acquisition of different assets came with an initial capital investment, and it was the sole owner of the new business at that point. Since then, management, unnamed individual investors, and a separate firm called Outpost Ventures (part of Neuberger Berman), have also invested, giving them also stakes in the business.

Outpost and Finch co-led NomuPay’s most recent tranche of about $15 million, and Burridge said the plan is to raise more — in his words a “proper raise” — soon. Today is the first time that the startup is announcing the details of any of this funding. 

NomuPay was quietly being formed from 2021, but it launched its first commercial product — a unified payments platform for making and taking payments that is gateway-agnostic and that works with whatever payments infrastructure the business already uses — at the end of 2022 and says it is now active in 20 countries. Burridge declined to disclose any specifics on the size of its active business, but customers and partners include regional operations for Spotify, Ikea, Facebook and hospitality payments specialist Planet.

That gives an idea of NomuPay’s target customers: merchants and other online businesses that need to make and take payments (that is, payment acceptance and payouts) across international markets. Its core product is an API that businesses can use to get around the difficulties of having to negotiate and integrate the many different, fragmented payment methods and processes a business needs to have in place when transacting in across borders. NomuPay’s unified payments platform competes against the likes of Stripe, PayPal and Adyen, but also PPRO, Payoneer, and many others.

It is indeed a crowded market, but also a big enough one that Burridge believes there is room for more payment companies to meet the demand.

“Payments is still a problem that needs to be solved,” he said. “We are building new rails to do that.”

Burridge can say something that lofty with some authority because he has a long history in the world of fintech, and specifically the messier aspects of cross-border payments. He was the longtime president and COO of HyperWallet, which was acquired by PayPal to build out its global payouts operation, a business he led for PayPal as well. Previous to that, Burridge also worked for years at Travelex; and before his foray into FX, he spent a long time at Oracle and Siebel so has a pretty strong background in CRM and how to build B2B services directed at customer needs.

“While card schemes [like Mastercard or Visa] have created ubiquity, it’s [still] hard to expand globally,” he said. “For example, if I go to Turkey, I still need to open a merchant account and work with another acquirer and pay local rates and local fees. The issue globally is that cross border acceptance rates are still very poor.”

While there is a clear link between Wirecard and the formation of NomuPay — and one might even think that there are some services and customers that have carried over, since Wirecard in its heyday offered unified payments as one part of its fintech stack before it went bust — Burridge is very specific to say that the acquisition was made to pick up local licensing, which can be expensive and time-consuming to negotiate in multiple markets.

Finch’s strategy, he said, was to get “good licenses in hard-to-get-to places” after they spent time looking at the market and looking at payment methods to find the best gaps. He rolls his eyes at the mention of Wirecard fiasco and says that the technology, customers and all of the infrastructure beyond the licenses are all built by NomuPay itself, not using anything from Wirecard.

“We think of this more as a Disneyland pass to get to the front of the queue,” he said.

“Under the Leadership of Peter Burridge, NomuPay has made a series of licence acquisitions, and top level hires that has helped to take the company to the next level,” said Radboud Vlaar, managing partner of Finch Capital, in a statement. “On top of this, the company has built a Unified Payments Platform that unlocks local payment acceptance and payout disbursements in geographies that have long lacked a unified system, through a simple and single integration. We are very excited to see how NomuPay addresses the burning need of clients in these core markets.”

“We’re thrilled to partner with the deeply experienced team at NomuPay and be a partner with them in this next phase of growth,” added David Dubick, a partner at Outpost Ventures. “Throughout our conversations with NomuPay we’ve been continually impressed by the technological implementation of the uP Platform, its ability to solve a wide range of issues faced by enterprises and marketplaces in global payments, as well as their approach to distribution and the initial partners who are using the platform at scale.”

NomuPay, formed from pieces of failed fintech Wirecard, says it’s raised $53.6M for cross-border payments by Ingrid Lunden originally published on TechCrunch

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Taxfix, the $1B German accounting startup, slashes 120 jobs amid funding crunch

Taxfix leaped to a $1 billion valuation in 2022 on the back of a popular mobile app used by consumers help with tax returns. But fast forward to 2023, and the Berlin-based accounting startup is taking an audit of its own affairs. TechCrunch has learned and confirmed that Taxfix has laid off 20% of its staff — 120 employees — as part of wider restructuring of the business aimed at cutting costs.

The cuts were announced to staff on Tuesday. Pointedly, they are coming in the wake of Taxfix acquiring a rival tax startup in the country, Stuttgart-based tax chatbot Steuerbot — a deal that was announced two months ago.

“With Taxfix’s recent successful acquisition of Steuerbot, great synergies are created, which enable us to heavily increase efficiencies. Therefore we took the strategic decision to restructure the organization,” a Taxfix spokesperson said in an emailed statement. Taxfix originally said it would operate Steuerbot as an independent and complementary subsidiary.

Taxfix had also been actively recruiting just prior to today’s news; now, it no longer lists open positions at the company on its own careers page so it appears that hiring is also frozen.

The sudden changes underscore the pressure that startups are under in the current market.

The most promising of them will have raised big rounds in years past at top valuations to stay in so-called “growth mode” — intentionally remaining unprofitable and investing capital in their market and technology expansion.

But now, with the funding landscape dried up, many of the same startups are being expected to pursue a variety of other courses: conserve the cash they have, cut costs where they can, be prepared to take hits on their valuations if they do need to raise (especially if they’re not tightening their belts), and aim for profitability — all boxes that Taxfix is now aiming to check.

“The macroeconomic funding environment has changed over the past months, and it is, therefore, more important than ever to position ourselves as an independent company for the long term. This entails an even stronger focus of the business activities on sustainable growth and profitability,” the spokesperson said.

Taxfix did not comment on its current runway, nor whether it is currently trying to raise more money.

The last funding the startup raised was just over a year ago, in April 2022, when it closed a $220 million Series D at a valuation of over $1 billion, from an impressive group of investors that included Teachers’ Venture Growth (formerly Ontario Teachers’ Pension Plan Board), Index Ventures, Valar Ventures, Creandum and Redalpine.

In more heady times, you might have expected Taxfix to follow the route of other high-flying unicorns: by now it would have scooped up yet more investors and capital at an even higher valuation to break into more markets and accounting categories. But these days, sounds like there’s a lot riding on just keeping things operating steadily on its own steam.

Taxfix, the $1B German accounting startup, slashes 120 jobs amid funding crunch by Jagmeet Singh originally published on TechCrunch