Welcome to TechCrunch Fintech! This week we cover the long-term impact of Synapse's bankruptcy on the fintech sector, Majority's impressive ARR milestone, and more.
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The big story
Last week, we reported that Copper Banking, a digital banking service targeted at teenagers, suddenly discontinued its bank accounts and debit cards. The startup said that banking middleware provider Synapse would shut down its services “soon.” This is just one of many ways businesses and consumers are being affected by the collapse of Synapse, a banking-as-a-service (BaaS) company. I have done extensive research into the short-term and long-term impact that Synapse's collapse could have on the fintech sector. Of course, this is not the only bad news, but it shows how treacherous the situation can be in the often interdependent world of fintech when one of the key players runs into trouble.
This week's analysis
Beyond Copper, many niche digital banks have struggled recently, making it all the more notable that immigrant banking platform Majority not only raised more funding but also revealed that it had hit $40 million in annual recurring revenue as of April. That's no easy feat, especially in a crowded industry with competitors like Comun, Maza, Alza, and Welcome Technologies. Founded in 2019 by Swedish immigrant Magnus Larsson, Majority said it has tripled revenue and doubled its user base over the past year.
Dollars and cents
Vitesse, a British fintech company targeting insurance companies with an all-in-one financial and payment management platform, has closed a $93 million Series C round of funding led by investment giant KKR. The company said it will focus on expanding in the United States.
Finout, an enterprise toolset designed to help manage and optimize cloud costs, closed a $26 million Series B round last week led by Red Dot Capital. We covered the company's launch as it emerged from stealth in 2022. Despite the competitive market, Finout says it has landed high-profile clients such as The New York Times, Tenable, and Wiz, and is growing annual recurring revenue ninefold from 2022 to 2023.
Valor Ventures, founded by Peter Thiel, has backed a number of fintech companies, and has raised a $300 million fund, half the size of its previous round.
What else am I writing?
Google Pay announced the rollout of several updates last week that leverage its integration with other Google products, including Android and the Chrome browser. People checking out with Google Pay can now see card benefits and offers before selecting one. Additionally, they can now take advantage of buy now, pay later through partners like Affirm and Zip, and enter their card details with biometrics or a PIN instead of entering a security code. These changes are designed to improve the experience for consumers using Google Pay and make it a more competitive option against other payment methods.
Indian digital payments platform Paytm reported a wider fourth-quarter net loss and warned of job cuts as it struggles with recent regulatory tightening.
Highly Interesting Headlines
Stripe launches new payments and lending tools to accelerate business growth in the UK
Rho partners with Navan for travel and expense management
Capchase secures $114 million to fund SaaS business
In case you missed it: Federal prosecutors are investigating financial transactions of Block, owner of Cash App and Square
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