Originally published at: The shocking allegations against Daylight, an LGBTQ+ focused fintech startup – We Never See Nothing
Welcome to The Interchange! If you received this in your inbox, thank you for signing up and your vote of confidence. If you’re reading this as a post on our site, sign up here so you can receive it directly in the future. Every week, I’ll take a look at the hottest fintech news of the previous week. This will include everything from funding rounds to trends to an analysis of a particular space to hot takes on a particular company or phenomenon. There’s a lot of fintech news out there and it’s my job to stay on top of it — and make sense of it — so you can stay in the know. — Mary Ann
Last week ended with an explosive feature published by NY Magazine. The article homed in on Daylight, an LGBQT+ focused neobank whose seed and Series A raises TechCrunch had covered here and here, respectively. The depiction of CEO and founder Rob Curtis was so far from the polite executive that I interviewed that it made me question my own character judgment. Lawsuits, fabrications and inappropriate behavior are among the many allegations reported in this in-depth piece. One person who tried the bank’s service shared with me that other than being allowed to use their chosen name on a card, they “didn’t really see much in the way of benefits or specialization” and that it was “so buggy,” they stopped using it.
Meanwhile, there is never a dull day in the corporate spend space. Last week, I wrote about Ramp reporting 4x revenue growth in 2022. That got me curious about other companies in the space, so I pinged a few of them. An Airbase spokesperson got back to me, sharing via email: “We grew 2X across the important dimensions of ARR, payment volume and number of paying customers. It’s important to point out that the majority of our revenue is high-margin and subscription based, unlike most of the interchange revenue focused companies in our space. We choose not to play the gross ARR obfuscation game…” Ouch. Meanwhile, I neglected to include last week that Brex had expanded into the travel space. That company has reportedly ruffled a few feathers, though, as of late, according to AwardWallet, by devaluing “cash and crypto redemptions by 40% and slashed Brex Rewards point transfer rates to airline partners by over 40%” with little to no notice. Twitter was also abuzz about the news, if this tweet is any indication. I did reach out to the company but had not yet heard back.
Other Weekly News
Reports Haje Jan Kamps: “What do you do when you have a very successful and popular product (marijuana) that is legal in some places, but federally has been a Schedule 1 drug since 1970? Well, you can’t rely on any national institutions as your business partners. One of the major places that shows up is in payments and payment processing; even after recreational cannabis became legal in 21 states and decriminalized in another dozen or so, cannabis has become largely a cash business. In a world that is increasingly cashless, that’s a problem for both consumers and businesses. Smoakland is currently beta-testing a loophole that lets its customers pay by credit card. The secret, it turns out, is crypto.” More here.
Reports Anna Heim: “If you think embedded insurance is the only hot thing in insurtech these days, we’ve got a surprise in store for you: While it’s true that startups that help sell insurance together with other products and services are enjoying tailwinds, there are plenty of other opportunities in the space, several investors told TechCrunch+.” More here.
I reached out to payment company Checkout.com’s new president, Céline Dufétel, to find out more about her plans in her new role, including what’s in store for the company this year, her thoughts on the future of payments generally and why she sees so much opportunity in the U.S. We also asked how she felt about the comparisons to Stripe…and her answer may surprise you. More here.
Reports Kyle Wiggers: “Confluent co-founder Neha Narkhede today announced a new fintech company, Oscilar, that’s developing an ‘AI-driven’ platform to help financial institutions protect online transactions from fraud and theft. Oscilar is entirely self-funded, backed by $20 million that Narkhede and the company’s other co-founder, Sachin Kulkarni, themselves contributed. Narkhede says they opted not to take outside funding so that they could ‘quickly build and scale the company as it launches publicly.” More here.
Reports Kyle Wiggers: Months after unveiling a “major update to Apple Pay called Apple Pay Later, which allows users to split the cost of an Apple Pay purchase into four equal payments over six weeks without interest or late fees, Apple has finally launched the feature. But not for everyone — at least not yet. Starting today, Apple says it’ll begin inviting randomly selected users to access a pre-release version of Apple Pay Later, with plans to offer it to all ‘eligible’ users on iOS 16.4 or iPadOS 16.4 in the coming months.”
Meanwhile, Fitch Ratings weighed in on the Apple Pay Later news, with senior director Michael Taiano noting via email that “Apple not allowing customers to link to a credit card is a unique feature in its BNPL product that should limit the ability of borrowers to pay off one form of debt with another form of debt, though it does not fully address our broader concerns over the structural and cyclical challenges the buy-now-pay-later business model continues to face.”
Tage Kene-Okafor conducted an in-depth interview with Union54 co-founder and CEO Perseus Mlambo in which the executive “spoke candidly about the issues Union54 had to contend with when it had to halt operations over an attempted $1.2 billion chargeback fraud last year, how the company was at risk of a total shutdown, and why fintechs need to be more transparent about fraud exposure.” A must read!
Reports Fintech Futures: “Payments giants Visa and Mastercard are reportedly among a number of firms competing to acquire Brazilian payment and banking platform Pismo. News reports state that the firm is working with Goldman Sachs on a potential sale at a reported valuation of $1 billion. Sources tell Bloomberg that other interested parties include a bank and a private equity firm, and that the talks may not result in a sale. According to Valor Economico’s Pipeline, Visa submitted an initial offer of $1 billion which was rejected by Pismo, following which Visa upped its bid to $1.4 billion.” More here. TechCrunch covered Pismo’s $108 million raise in October of 2021. If true, this is super exciting news not only for Pismo, but also for the Latin American startup scene as a whole.
Speaking of Latin America, Latitud, a self-described “tech entrepreneurship program” for the Latin American region that is backed by Andreessen Horowitz and NFX, “launched business accounts.” According to co-founder Brian Requarth, the move was made in part because “most all founders in LatAm worked with SVB. . . . There is a gaping hole,” he said via email. “We had been working on this for months so we decided to launch it.” TechCrunch covered Latitud’s raise last March.
Aspiration filed a WARN notice in Oregon on March 24, 2023, notifying the state that it plans to lay off 180 people sometime between May 26, 2023, and June 1, 2023. Among those impacted are the chief administration officer, president of the MENA region, and vice presidents of business development, HR and product design. As one source shared, Aspiration had planned to become a public company but has yet to iron out its SPAC. The SPAC requested an extension until June 9 to complete the merger. Notably, according to its website, it has “pivoted to selling carbon credits to businesses instead of the environmentally friendly neo bank most people might know them as,” the source said. TechCrunch reached out to Aspiration but did not get a response. The company has raised about $250 million in known funding.
Reports PYMNTS: “Family finance app Greenlight has unveiled an integration for banks and credit unions. Greenlight for Banks…lets financial institutions add Greenlight’s app to their financial service offerings…With the app, banks can offer customers Greenlight’s tools for earning, saving and spending. In addition, parents can automate allowances and send money instantly, while kids and teenagers get ‘hands-on money management experience with parental supervision,’” the company said.
Fundings and M&A
Seen on TechCrunch
PSA: Last year was my first Disrupt and I was blown away. This year, I am even more excited, as we will have a dedicated fintech stage! Come join us — it’s going to be awesome.
Next week we’ll be taking a break due to the Easter holiday, but I’ll be back on April 16. Until then, please take good care! And as always, thank you for reading, and sharing, this newsletter. xoxo, Mary Ann
The shocking allegations against Daylight, an LGBTQ+ focused fintech startup by Mary Ann Azevedo originally published on TechCrunch