Onyx Private, a Miami-based Y Combinator-backed digital bank that provided banking and investment services to high-income Millennials and Gen Z, is discontinuing its banking operations.
In a March 13 email seen by TechCrunch to customers with the subject line “Important Notice: Bank Termination and Account Closure,” Onyx wrote: Starting today, all related accounts will be closed. ”
Co-founder and CEO Victor Santos admitted to TechCrunch that the company is “moving away from a B2C model,” but rather than shutting down operations, the company is changing its business model. He said he is doing so.
Y Combinator lists the company as “inactive” on its website, but Santos could not explain that. (P.S. text updated after publication).
He said Onyx hopes to launch digital apps built for younger, more affluent consumers and move toward a “B2B white-label, platform-as-a-service model for community banks, regional banks, and credit unions.” Stated. Santos claimed that Onyx has been exploring the idea and developing it with some partners over the past year.
Less than a year ago, in May, the startup announced it had raised $4.1 million in venture funding from investors including Village Global, Y Combinator, Global Founders Capital, One Way Ventures, 186 Ventures, and Olive Tree Capital. At the time, the company said Onyx Private, which the company claimed was aiming to be the “next generation UBS,” had grown 30% month over month since its launch about a year ago and had processed more than $4 million in transaction payments. Announced. Value per month. He also claimed that the TPV (total value paid) was approaching $5 million.
Mr. Santos today declined to reveal the number of Onyx's banking customers. A source told TechCrunch that regulatory issues may have influenced the decision, which Santos dismissed, causing the startup to suspend direct-to-consumer operations. He said there were no regulatory issues.
He added: “This was a purely strategic decision, allowing us to leverage our existing financial institution base.” [financial institutions] And we use the technology we build to scale in a more capital efficient way. ”
At the time of the financing, the company had appointed Piermont Bank as its banking partner. Today, Onyx says on its website: [are] Provided by i3 Bank. Santos told TechCrunch that Onyx “started with Piermont and moved to i3 last year.”
Piermont declined to comment. TechCrunch has reached out to i3 for comment.
The email told the bank's customers that the closure would take effect on April 14, but that the “suspension of our rewards program” was “effective immediately.”
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