February 21, 2024

Welcome back to The Interchange! If you would like to receive this information in your inbox, please sign up here. After a brief hiatus, we’re back with plenty of fintech news, including Robinhood’s latest acquisition, Plaid’s newest product, and a ChatGPT-powered AI tool designed to help you save on your bills.

robin hood motive

When Robinhood announced on June 22 that it was acquiring credit card startup X1 for $95 million, there was all sorts of chatter in the fintech world.

Why is Robinhood buying a credit card startup? Is this a good deal considering X1 has only raised $62 million in its lifetime? Did its investors get a good deal, or just a return on investment? Why is X1 in particular superior to many other credit card startups?

Let’s talk about the last point first.

When we spoke to X1 in December, when it was last fundraising, founder and CEO Deepak Rao told us that the company was launching a new transaction platform that would allow cardholders to use earned reward points buy stocks. He even singled out Robinhood as a company he hopes to compete with, telling TechCrunch: “By using credit card points to buy stocks instead of cash or savings, we think it’s a safe way to invest for many consumers. There’s no real Cons, because their investment is technically free.”


Could this be what attracted Robinhood to the X1?

On this week’s Stocks Podcast, we discuss this possibility, with co-host Alex William pointing out that one has to earn a large reward before buying many stocks. He also noted that Robinhood may still have some cash to burn, and that the company claims to be looking for something new as a way to “expand (its) product range” and “deepen” relationships with existing customers.

If you’ve been following Robinhood’s performance over the past year, its desire to diversify its business may not come as a surprise. We have noticed that not only has cryptocurrency trading on Robinhood slowed down, but the company is also losing users.So buying X1 puts Robinhood in the credit card space and Additional source of income.

That said, one observer pointed out that while the basic premise of X1 to offer credit based on income rather than credit score is innovative, since its first inception in 2020, nothing other than New Inventory Function – Stand out in the market.

Fintech analyst Alex Johnson had a similar sentiment, tweet: “Brand consistency is strong. There’s a certain unearned manliness to both companies. Other than that, I don’t understand the Robinhood thing. The X1 doesn’t have many customers (is it fully launched?), and it’s functional Neither is revolutionary.”

True, X1 may not have many customers, especially compared to a giant like Robinhood, but the company claims to be on a growth trajectory, with Rao telling us in December that the company was generating $3 million a month in revenue last October and that its annual Revenue reached $36 million.

Not everyone is against the deal, though. Sheel Mohnot of Better Tomorrow Ventures tweeted that while X1 may not have many customers, Robinhood does.he Add to: “To me, it seemed like a good acquisition, and it was cheaper to cross-sell than to sell to a new customer.”

mary ann and kristen

Challenger credit card startup X1 plans to launch investment platform, boost valuation by 50%

Image Source: X1

weekly news

fintech startups Plaid Started out as a company connecting consumers’ bank accounts with financial apps, but has since gradually expanded its offering to offer more of a full-stack onboarding experience. On June 22, Plaid announced more new products that will take the company in a new direction while also helping to diversify its revenue streams. Foremost is Beacon, which it describes as “a collaborative anti-fraud network that enables financial institutions and fintechs to share critical fraud intelligence via an API on Plaid.” More here.

Navin (formerly TripActions) offers corporate cards and software subscriptions. In a surprise move, the company announced on June 12 a new product called Navan Connect, described as a patented card-linking technology that offers businesses a way to Provides a means to automate expense management and reconciliation. At its initial launch, Navan partnered with Mastercard and Visa, and plans to announce more network partnerships in the near future. More here.

Spend Management Launched breaks Named to Time Magazine’s 100 Most Influential Companies list.When it makes an affirmation, the time wrote: “Co-CEO Henrique Dubugras says he sees Brex as a ‘spending platform’. The company launched a corporate charge card for start-ups five years ago and has since grown into a fintech conqueror. Valued at $12.3bn in 2022 Dollar, which has made 10 acquisitions, received $2 billion in deposits and opened 4,000 new accounts after the Silicon Valley bank collapsed. Last year, Brex launched Empower software, which links Brex cards and accounts with custom expense management services. The company serves startups and helps new businesses get off the ground, as well as enterprise clients including DoorDash, Indeed, Coinbase, SeatGeek, and Lemonade.”

bluebankis an Argentina-based digital bank founded by former Citibank executive Juan Bruchou, who told TechCrunch that it has attracted nearly 3 million customers since its launch in 2019, making Brubank “the largest Spanish-language bank in Latin America.” Digital Bank, with 50% activity rate,” the company said. The company has been profitable for the past 12 months.

At least two companies are preparing to launch credit cards this summer: snowflakeOne of three startups touting at TC Early Stage Boston in April, the company will launch in July a credit card tailored for users in the US and India so they can move cash across borders more easily. U.S. users have a limit of up to $30,000, and the card reduces the need to have separate bank accounts in the U.S. and India, the company said. Plus, the process is instant and free. at the same time, stepThe financial platform tailored for teens, their families and young adults has opened a waiting list for its latest card, the Step Black Card. Cardholders will be eligible for benefits, including earning a 5% bonus on savings balances of up to $1 million and earning up to 8x points on purchases. Read TechCrunch’s coverage of Step here and here.

other headlines

This ChatGPT-Powered AI Tool Can Help You Haggle to Save on Bills

PayEm integrates spend management and procurement platform with American Express

Stripe launches payment feature for Google Calendar reservations

Deal: Citizens picks embedded payments provider Wisetack

Amsterdam fintech unicorn Adyen partners with Shopify to enhance its commerce capabilities

Visa launches fintech accelerator in Africa

TTV Capital Hires Former Global Payments CFO to Continue Expansion

Financing and M&A

See on TechCrunch

Volt, an open banking fintech that offers services like payments, raises $60M at a valuation of over $350M

Heard Technologies raises another $15 million to develop accounting tool for therapists

Nasdaq to acquire financial services software firm Adenza from Thoma Bravo for $10.5B

TransUnion takes aim at Equifax, invests $24M in income verification platform Truework

Finfra lets Indonesian businesses add embedded finance to its platform

there are other places

Dallas-based Yendo raises $24 million in Series A funding

Fintech firm Rho in talks to acquire startup (formerly Party Round)

Car insurer Root secures takeover bid (Interestingly, the company’s stock price rose sharply following the news, soaring from the opening price of $5.92 per share to $12.62 per share That day.)

New lender Gulp Data secures $25M to offer data-backed loans to startups

Alternativ raises $10M as digital-native RIA grows

Fortis Expands to Canada, Adds Payment Capabilities, Acquires SmartPay

Join us at TechCrunch Disrupt 2023 this September in San Francisco as we explore the impact of fintech on today’s world. This year, we’ll have a full day dedicated to all things fintech featuring some of today’s leading fintech personalities. Save up to $600 on passes now through August 11, plus save 15% with promo code INTERCHANGE. learn more.

Image Source: Bryce Durbin