Fintech Update, 11/13 - 11/19
Hi! It’s Monday, November 20th, 2023.
The Rundown
There were mixed signals in the world of fintech this week, with some headlines reflecting that things aren’t as dark as they seem and others suggesting there’s still more doom and gloom to come—particularly in the consumer space..
RIP HM Bradley, long live B2Bradley. HM Bradley, the fintech best known for a high yield savings product targeting affluent consumers, shuttered its consumer offering to focus on B2B. The company started developing a B2B offering earlier this year, with CEO Zach Bruhnke sharing the frank assessment that “as we took this [B2B offering] more seriously, it just became obvious that we were gonna produce more revenue on the B2B side.” We expect other consumer fintechs to come to a similar conclusion, and that those without a meaningfully differentiated product will be forced to sell or close down.
We’ll pour one out for Ness. The fintech that offered a credit card with the goal of reducing the cost of ‘wellcare’, announced that it was shutting down its card program. The company offered a card and app that rewarded users with points they could redeem on wellness products, services, experiences, and experts. They had previously raised $15.5 million in seed funding.
On the brighter side, automated wealth management provider Wealthfront announced that it has reached $50B in AUM across its 700k+ clients. The company is on track to grow revenue by over 140% in 2023. Alongside strong growth, Wealthfront’s underlying economics look good: the “business is profitable with EBITDA margins above 40%.” Feels like ancient history when UBS backed out of their agreement to acquire the company for $1.4B a year ago.
In response to mounting concerns from Washington, Zelle has implemented a new policy change to reimburse victims of imposter scams. Currently, federal regulations only require reimbursements for unauthorized payments (e.g., if an account is hacked). The new policy requires Zelle's bank and credit union partners to refund transactions even in cases when customers themselves were tricked into sending money. The announcement comes on the heels of Sen. Elizabeth Warren’s letter [full text] warning the CFPB of Zelle’s high rates of fraud and scams.
The Wall Street Journal shed light on the Federal Deposit Insurance Corporation’s toxic work culture that permitted sexual harassment and misogyny, driving women to leave the regulator responsible for ensuring the stability of the country’s banks. Chairman Marty Grunberg took responsibility for the workplace and vowed to stay on amid congressional pressure to resign.
Venmo is rolling out a new group payments product that will allow users to track and manage ongoing group expenses. With the new feature, groups of up to 30 members can manage shared expenses, add / split costs, and settle balances within the Venmo app. The new offering enables Venmo to bolster its defenses against competitors like Splitwise. About time?
Ramp announced an integration with Microsoft’s AI assistant Copilot, allowing for real-time alerts on employee transactions and automated raising of spend limits. Brex made a similar announcement in September.
Selected fundings
Imprint, the startup that offers branded payments and rewards products, raised $75 million in new funding from Ribbit.
Generative AI platform for accounting Puzzle raised $30 million in new funding.