Fintech

The young fintech Copper had to emergency discontinue its banking and debt products

Published

8 months ago

21 May, 2024

Teen fintech Copper had to emergency discontinue its banking, debit products

Another fintech startup, and its customers, have been severely affected by the crisis implosion of banking-as-a-service startup Synapse.

Copper Banking, a digital banking service aimed at teens, informed its customers on May 12 that it would discontinue bank deposit accounts and debit cards on May 13. In a letter to customers, CEO and co-founder Eddie Behringer said the company had learned the previous week that the banking middleware provider they use, Synapse, would cease its service “imminently.”

“Despite our advance planning, this event forced us to close bank accounts much earlier than expected,” he wrote.

Synapse filed for Chapter 11 bankruptcy on April 22 with plans to sell its assets to TabaPay for $9.7 million. But that sale fell through and last week a U.S. trustee filed an emergency motion asking the judge to move to a Chapter 7 bankruptcy liquidation.

The closure of Copper Banking’s bank accounts and debit cards means that some Copper customers do not have access to their funds. Behringer says it is working with its banking partners, AMG National Trust Bank and Synapse, to return their money as soon as possible.

Behringer said that as soon as it heard the news that the TabaPay deal was in jeopardy, it began returning customer funds, so only a small number of single-digit customers did not receive their funds before the service was discontinued .

Copper now plans to offer a white-labeled family banking product later this year in partnership with “big banks across America,” which Behringer told TechCrunch in an interview that he hasn’t gotten around to yet to name. The company had been planning to move in that direction for the past year, he added, but the process was accelerated due to Synapse’s shutdown.

According to Behringer, Copper remains operational providing customers with its direct-to-consumer financial education product, Earn. Earn teen credits for playing games, taking surveys, scanning receipts, inviting friends, and once users reach a certain threshold of credits, they get paid cash (500 credits for $5), she says. The goal is to teach children about finance. Earn money through collaboration with other institutions.

That product, he said, launched just under a year ago and has seen revenue growth of 160% year over year. It has since provided the “majority” of Copper’s revenue as the company makes money through partnerships with brands that want feedback on their products. The 30-person company remains intact, Behringer said, and is still hiring.

He says that because Earn’s growth is so strong, Copper is still “on track to reach near profitability this year” and, in addition to the money raised from VC fundraising, has “well over four years of runway” .

In April 2022, Copper raised $29 million in a Series A funding round led by Fiat Ventures. It has raised a total of $42.3 million since its inception in 2019. Other backers include Panoramic Ventures, Insight Partners and Invesco Private Capital. At the time, the company said it derived its revenue primarily from interchange fees.

AMG National Trust Bank and Synapse could not be reached for comment at the time of publication. As it turns out, Copper customers may not be alone. In an emergency hearing last week, as reported by Forbesa US bankruptcy court judge described Synapse’s problems as “a situation where tens of millions of people don’t have access to potentially hundreds of millions of dollars of their deposits.”

And Jason Mikula of Fintech Business Weekly reported After Friday’s bankruptcy hearing, “numerous fintech end users who have had their ability to access their funds frozen have shared the devastating impact it has had on their lives with the court and hundreds of participants who have connected to the hearing”.

The copper problems could be another example of a trend that sees consumer fintech moving towards B2B. Earlier this year, TechCrunch reported that Miami-based Private onyxa Y Combinator-backed digital bank that provided banking and investment services to high-income Millennials and Generation Z, also had has ended its consumer banking operations. He said at the time that he would move toward a “white-label B2B platform-as-a-service model for community banks, regional banks and credit unions” that want to launch digital apps built for young, affluent consumers.

Want more fintech news in your inbox? Subscribe to TechCrunch Fintech Here.

Do you want to contact us with a suggestion? Email me at maryann@techcrunch.com or text me on Signal at 408.204.3036. You can also send a note to the entire TechCrunch team at tips@techcrunch.com. For safer communications, Click here to contact uswhich includes SecureDrop (instructions here) and links to encrypted messaging apps.

Source

Fintech

Lloyds and Nationwide invest in Scottish fintech AI Aveni

Published

6 months ago

29 July, 2024

FinCrypto Staff

Lloyds and Nationwide invest in Scottish AI fintech Aveni

Lloyds Banking Group and Nationwide have joined an £11m Series A funding round in Scottish artificial intelligence fintech Aveni.

The investment is led by Puma Private Equity with additional participation from Par Equity.

Aveni creates AI products specifically designed to streamline workflows in the financial services industry by analyzing documents and meetings across a range of operational functions, with a focus on financial advisory services and consumer compliance.

The cash injection will help fund the development of a new product, FinLLM, a large-scale language model created specifically for the financial sector in partnership with Lloyds and Nationwide.

Joseph Twigg, CEO of Aveni, explains: “The financial services industry doesn’t need AI models that can quote Shakespeare, it needs AI models that offer transparency, trust and, most importantly, fairness. The way to achieve this is to develop small, highly tuned language models, trained on financial services data, vetted by financial services experts for specific financial services use cases.

“FinLLM’s goal is to set a new standard for the controlled, responsible and ethical adoption of generative AI, outperforming all other generic models in our selected financial services use cases.”

Robin Scher, head of fintech investment at Lloyds Banking Group, says the development programme offers a “massive opportunity” for the financial services industry by streamlining operations and improving customer experience.

“We look forward to supporting Aveni’s growth as we invest in their vision of developing FinLLM together with partners. Our collaboration aims to establish Aveni as a forerunner in AI adoption in the industry, while maintaining a focus on responsible use and customer centricity,” he said.

Source

Fintech

Fairexpay: Risk consultancy White Matter Advisory acquires 90% stake in fintech Fairexpay

Published

6 months ago

29 July, 2024

FinCrypto Staff

Treasury Risk Consulting Firm White Matter Alert On Monday he announced the acquisition of a 90% stake in the fintech startup Fair payment for an undisclosed amount. The acquisition will help White Matter Advisory expand its portfolio in the area of cross-border remittance and fundraising services, a statement said. White Matter Advisory, which operates under the name SaveDesk (White Matter Advisory India Pvt Ltd), is engaged in the treasury risk advisory business. It oversees funds under management (FUM) totaling $8 billion, offering advisory services to a wide range of clients.

Improve your technology skills with high-value skills courses

College OfferCourseWebsite

IIT Delhi	Data Science and Machine Learning Certificate Program	Visit
Indian School of Economics	ISB Product Management	Visit
MIT xPRO	MIT Technology Leadership and Innovation	Visit

White Matter Advisory, based in Bangalore, helps companies navigate the complexities of treasury and risk management.

Fairexpay, authorised by the Reserve Bank of India (RBI) under Cohort 2 of the Liberalised Remittance Scheme (LRS) Regulatory Sandbox, boasts features such as best-in-class exchange rates, 24-hour processing times and full security compliance.

“With this acquisition, White Matter Advisory will leverage Fairexpay’s advanced technology platform and regulatory approvals to enhance its services to its clients,” the release reads.

The integration of Fairexpay’s capabilities should provide White Matter Advisory with a competitive advantage in the cross-border remittance and fundraising market, he added.

The release also states that by integrating Fairexpay’s advanced technology, White Matter Advisory aims to offer seamless and convenient cross-border payment solutions, providing customers with secure options for international money transfers.

Source

Fintech

Rakuten Delays FinTech Business Reorganization to 2025

Published

6 months ago

29 July, 2024

FinCrypto Staff

Rakuten (Japan:4755) has released an update.

Rakuten Group, Inc. and Rakuten Bank, Ltd. announced a delay in the reorganization of Rakuten’s FinTech Business, moving the target date from October 2024 to January 2025. The delay is to allow for a more comprehensive review, taking into account regulatory, shareholder interests and the group’s optimal structure for growth. There are no anticipated changes to Rakuten Bank’s reorganization objectives, structure or listing status outside of the revised timeline.

For more insights on JP:4755 stock, check out TipRanks Stock Analysis Page.

Source

Fintech

White Matter Advisory Acquires 90% Stake in Fintech Startup Fairexpay

Published

6 months ago

29 July, 2024

FinCrypto Staff

White Matter Advisory Acquires 90% Stake in Fintech Startup Fairexpay

You are reading Entrepreneur India, an international franchise of Entrepreneur Media.

White Matter Advisory, which operates under the name SaveDesk in India, has announced that it is acquiring a 90% stake in fintech startup Fairexpay for an undisclosed amount.

This strategic move aims to strengthen White Matter Advisory’s portfolio in cross-border remittance and fundraising services.

By integrating Fairexpay’s advanced technology, White Matter Advisory aims to offer seamless and convenient cross-border payment solutions, providing customers with secure options for international money transfers.

White Matter Advisory, known for its treasury risk advisory services, manages funds under management (FUM) totaling USD 8 billion.

Founded by Bhaskar Saravana, Saurabh Jain, Kranthi Reddy and Piuesh Daga, White Matter Advisory helps companies effectively manage the complexities of treasury and risk management.

The SaveDesk platform offering includes a SaaS-based FX market data platform with real-time feeds for over 100 currencies, bank cost optimization services, customized treasury risk management solutions, and compliance guidance for the Foreign Exchange Management Act (FEMA) and other trade regulations.

Fairexpay is a global aggregation platform offering competitive currency exchange rates from numerous exchange partners worldwide. Catering to both private and corporate customers, Fairexpay provides seamless money transfer solutions for education, travel and immigration, as well as simplifying cross-border payments via API and white-label solutions for businesses. Key features include competitive currency exchange rates, 24-hour processing times, extensive currency coverage of over 30 currencies in more than 200 countries, and secure, RBI-compliant transactions.

Source