fintech
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Pixpay is a challenger bank for teens focused on pocket money
Meet Pixpay, a French startup that wants to replace cash when you’re handing out pocket money to your kids. Anybody who is older than 10 years old can create a Pixpay account, get a debit card and manage pocket money.
Challenger banks are nothing new, but they’re still mostly targeted towards adults. If you want to create an N26 or Revolut account, you need to be at least 18 years old. You can create a Lydia account if you’re at least 14 years old with parental consent.
Pixpay, like Kard, wants to fill that gap and offer modern payment methods to teens so that you can ditch cash altogether. Parents and kids both download the Pixpay app to interact with the service.
A few days after creating an account, your child receives a Mastercard. It offers the same features that you’d expect from a challenger bank — you can customize the PIN code, lock it and unlock it, receive a notification with each transaction and restrict some features, such as limits, ATM withdrawals, online payments and payments abroad. Pixpay also lets you generate virtual cards for online payments.
In addition to some spending analytics, users can create projects and set money aside to buy an expensive thing after months of savings. Parents can also define an interest rate on a vault account to teach children how to save money. In the future, Pixpay wants to let teens collect money after a babysitting job for instance.
As for parents, they can send money instantly from the Pixpay app. You can top up your Pixpay account with your favorite debit card and send money on a regular basis (€4 per week for instance) or for one-off payment (here’s €15 for your movie ticket and fast food).
Parents can see an overview of multiple accounts in case you have multiple children using Pixpay. Eventually, the startup wants to let multiple parents manage the account of their child, which could be useful for separated couples.
Pixpay costs €2.99 per month per card. Payments and ATM withdrawals in the Eurozone are free. Transactions in foreign currencies cost 2% in foreign exchange and ATM withdrawals outside of the Eurozone cost €2.
The startup has raised $3.4 million (€3.1 million) from Global Founders Capital. The company partners with Treezor, a banking-as-a-service platform that lets you generate cards and e-wallet accounts using an API.
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Bunq launches metal card and plants a tree for every €100 spent
Fintech startup Bunq is launching a metal card called the Green Card. While some banks offer a cashback program with premium cards, Bunq is offering a special kind of “cashback”. For every €100 spent, Bunq plants a tree. The company has partnered with Eden Reforestation Projects to finance reforestation around the globe.
Manufacturing a metal card isn’t particularly environmentally friendly. That’s why the Green Card expires after six years instead of four years. It is also made of recyclable material (even though I’m not sure it’s that easy to recycle a metal card with a chip, a magnetic stripe and an NFC antenna after it expires).
Other than that, the Green Card works more or less like the Travel Card. While Bunq offers traditional bank accounts, you can order a Travel Card or a Green Card and keep your existing bank account.
The Green Card is a Mastercard without any foreign exchange fee. The company uses the standard Mastercard exchange rate but doesn’t add any markup fee.
While the Green Card is a credit card, it doesn’t work like normal credit cards. You don’t get a direct debit on your bank account once a month to cover your credit line. Instead, you have to open the Bunq app and top up your Bunq account — topping up your account with another card may incur some fees, more details here. If you don’t have enough money on your account, the transaction gets rejected like a debit card.
The Travel Card costs €9.99 to order the card. There’s no monthly fee after that. The Green Card costs €99 per year. Bunq charges €0.99 per ATM withdrawal but you get 10 free withdrawals with the Green Card.
The company is selling a limited edition today with “Founders Edition” engraved in the top right corner but the first batch is nearly sold out:
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Revolut supports direct debits in the UK
Fintech startup Revolut is adding a key feature for users who want to replace their traditional bank account altogether. You can now pay with GBP direct debits. Revolut already added EUR direct debits last year.
While most people use cards to pay for goods and services in the U.K., some businesses require you to pay with direct debit. It can be a utility bill, a gym membership or a phone contract for instance.
Compared to card transactions, direct debits pull money directly from your account and transfer it to the recipient’s account. It doesn’t go through Mastercard or Visa. Some businesses love direct debits because it’s usually cheaper than card processing fees. Direct debits also don’t have an expiry date, unlike cards.
Customers from the European Economic Area can now share their GBP account details for direct debits in the U.K. Direct debits are protected against some fraud and payment errors by the U.K. Direct Debit Guarantee.
Revolut has partnered with Modulr for this feature as it uses Modulr’s API. Business customers will also be able to take advantage of direct debits. You can now pay suppliers with your account details, which could be convenient for large sums of money for instance.
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Alpaca nabs $6M for stocks API so anyone can build a Robinhood
Stock trading app Robinhood is valued at $7.6 billion, but it only operates in the U.S. Freshly funded fintech startup Alpaca does the dirty work so developers worldwide can launch their own competitors to that investing unicorn. Like the Stripe of stocks, Alpaca’s API handles the banking, security and regulatory complexity, allowing other startups to quickly build brokerage apps on top for free. It has already crossed $1 billion in transactions within a year of launch.
The potential to power the backend of a new generation of fintech apps has attracted a $6 million Series A round for Alpaca led by Spark Capital . Instead of charging developers, Alpaca earns its money through payment for order flow, interest on cash deposits and margin lending, much like Robinhood.
“I want to make sure that people even outside the U.S. have access” to a way of building wealth that’s historically only “available to rich people” Alpaca co-founder and CEO Yoshi Yokokawa tells me.
Alpaca co-founder and CEO Yoshi Yokokawa
Hailing from Japan, Yokokawa followed his friends into the investment banking industry, where he worked at Lehman Brothers until its collapse. After his grandmother got sick, he moved into day-trading for three years and realized “all the broker dealer business tools were pretty bad.” But when he heard of Robinhood in 2013 and saw it actually catering to users’ needs, he thought, “I need to be involved in this new transformation” of fintech.
Yokokawa ended up first building a business selling deep learning AI to banks and trading firms in the foreign exchange market. Watching clients struggle to quickly integrate new technology revealed the lack of available developer tools. By 2017, he was pivoting the business and applying for FINRA approval. Alpaca launched in late 2018, letting developers paste in code to let their users buy and sell securities.
Now international developers and small hedge funds are building atop the Alpaca API so they don’t have to reinvent the underlying infrastructure themselves right away. Alpaca works with clearing broker NTC, and then marks up margin trading while earning interest and payment for order flow. It also offers products like AlpacaForecast, with short-term predictions of stock prices, AlpacaRadar for detecting price swings and its MarketStore financial database server.
AlpacaForecast
The $6 million from Spark Capital, Social Leverage, Portag3, Fathom Capital and Zillionize adds to $5.8 million in previous funding from investors, including Y Combinator. The startup plans to spend the cash on hiring to handle partnerships with bigger businesses, supporting its developer community and ensuring compliance.
One major question is whether fintech businesses that start to grow atop Alpaca and drive its revenues will try to declare independence and later invest in their own technology stack. There’s the additional risk of a security breach that might scare away clients.
Alpaca’s top competitor, Interactive Brokers, offers trading APIs, but other services as well that distract it from fostering a robust developer community, Yokokawa tells me. Alpaca focuses on providing great documentation, open-source contribution and SDKs in different languages that make it more developer-friendly. It will also have to watch out for other fintech services startups like DriveWealth and well-funded Galileo.
There’s a big opportunity to capitalize on the race to integrate stock trading into other finance apps to drive stickiness because it’s a consistent, voluntary behavior rather than a chore or something only done a few times a year. Lender SoFi and point-of-sale system Square both recently became broker dealers as well, and Yokokawa predicts more and more apps will push into the space.
Why would we need so many stock trading apps? “Every single person is involved with money, so the market is huge. Instead of one-player takes all, there will be different players that can all do well,” Yokokawa tells me. “Like banks and investment banks co-exist, it will never be that Bank of America takes 80% of the pie. I think differentiation will be on customer acquisition, and operations management efficiency.”
The co-founder’s biggest concern is keeping up with all the new opportunities in financial services, from cash management and cryptocurrency that Robinhood already deals in, to security token offerings and fractional investing. Yokokawa says, “I need to make sure I’m on top of everything and that we’re executing with the right timing so we don’t lose.”
The CEO hopes that Alpaca will one day power broader access to the U.S. stock market back in Japan, noting that if a modern nation still lags behind in fintech, the rest of the world surely fares even worse. “I want to connect this asset class to as many people as possible on the earth.”
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Revolut launches publicly in Singapore, signs deal with Mastercard
London-based fintech startup Revolut has two pieces of news to announce this week. First, Revolut is expanding to Singapore after a long beta period. The company already has 30,000 customers there and anyone can open an account now.
Singapore residents will be able to take advantage of all of Revolut’s core features. You can open an account from your phone, get a card and start spending anywhere in the world.
Revolut supports Singapore dollar as well as 13 other currencies. You can top up your account, and send and receive money from the app.
With a free account you can convert money in the app without any markup fee on weekdays up to S$9000 per month. You can also withdraw money anywhere in the world without any fee, up to S$9000 per month.
Premium accounts cost S$9.99 per month and Metal accounts cost S$19.99 per month in Singapore. You get higher limits and a few additional features with Metal.
Revolut is currently available in the U.K., Europe and Australia. There are 7 million Revolut customers in total. The company is still working on its launch in the U.S. and Canada for later this year.
The other piece of news is that Revolut has signed a global partnership with Mastercard. Revolut has already been working with Mastercard to issue cards, so this is an expansion of the current deal.
Revolut can now issue cards that work on the Mastercard network in any market where Mastercard is accepted, which represents around 210 countries. It doesn’t mean that Revolut will launch in 210 countries. But the startup says that the first Revolut cards in the U.S. will work on Mastercard.
It also doesn’t mean that Revolut will work exclusively with Mastercard. The company also works with Visa and recently announced a partnership deal. But at least 50% of all existing and future Revolut cards in Europe will be Mastercard branded.
It shouldn’t matter much to end customers, as I have yet to see a place that accepts Mastercard but not Visa, or Visa but not Mastercard. But Revolut is clearly using market competition to its advantage.
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Revolut ramps up customer support with plans to hire 400 people in Porto
Fintech startup Revolut has been growing like crazy and now has 6 million customers. The company has to scale its support team accordingly. That’s why Revolut just announced plans to open a customer operations centre in Porto, Portugal.
There are already 70 people working for Revolut in Porto. Eventually, Revolut plans to hire 400 people in the country. They’ll work on customer support, complaints, investigations and compliance.
And Revolut has been quite successful in Portugal so far. There are currently 250,000 Revolut customers in Portugal, and the company is adding 1,000 new customers per day in the country.
It should help when it comes to hiring local talent. The company is also hiring a growth manager, a communication and PR lead and a community manager in Portugal. Ricardo Macieira, the new growth manager, is the former country manager for Airbnb in Portugal. Rebeca Venâncio, the communication and PR lead, has worked for Microsoft in Portugal. And Miguel Costa, the community manager, has worked for Mog and Nomad Tech.
Earlier this summer, Revolut also announced plans to open a tech hub in Berlin. Originally founded in London, Revolut is slowly building multiple offices across the U.K. and Europe in order to attract local talent.
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Fintech decacorn Nubank raises $400M led by TCV
Another day, another mega round for a fintech startup. And this one is mega-mega.
Brazil-based Nubank, which offers a suite of banking and financial services for Brazilian consumers, announced today that it has raised a $400 million Series F round of venture capital led by Woody Marshall of TCV. The growth-stage fund is best known for its investment in Netflix but has also made fintech a high priority, with over $1.5 billion in investments in the space. According to Nubank, the company has now raised $820 million across seven venture rounds.
Katie Roof and Peter Rudegeair of The Wall Street Journal reported this morning that the company secured a valuation above $10 billion, potentially making it one of a short list of startup decacorns. That’s up from the $4 billion valuation we wrote about back in October 2018.
Part of the reason for that big-ticket round is the company’s growth. Nubank said in a statement that it has now reached 12 million customers for its various products, making it the sixth-largest financial institution by customer count within its home market. Brazil has a population of roughly 210 million people — indicating that there is still a lot of local growth potential even before the company begins to consider its international expansion options. Nubank announced a few weeks ago that it will start to expand its offerings to Mexico and Argentina.
Over the past year, the company has expanded its product offerings to include personal loans and cash withdrawal options as part of its digital savings accounts.
As I wrote earlier this week, part of the reason for these fintech mega-rounds is that the cost of acquiring a financial customer is critical to the success of these startups. Once a startup has a customer for one financial product — say, a savings account — it can then upsell customers to other products at a very low marketing cost. That appears to be the strategy at Nubank as well, with its quickly expanding suite of products.
As my colleague Jon Shieber discussed last month, critical connections between Stanford, Silicon Valley and Latin America have forged a surge of investment from venture capitalists into the region, as the continent experiences the same digital transformation seen elsewhere throughout the world. As just one example from the healthcare space, Dr Consulta raised more than nine figures to address the serious healthcare needs of Brazilian consumers. Additionally, SoftBank’s Vision Fund, which was rumored to be investing in Nubank earlier this year, has vowed to put $5 billion to work in the region and recently invested $231 million in fintech startup Creditas.
In an email from TCV, Woody Marshall said that, “Leveraging unique technology, David Vélez and his team are continuously pushing the boundaries of delivering best in class financial services, grounded in a culture of tech and innovation. Nubank has all the core tenets of what TCV looks for in preeminent franchise investments.”
NuBank was founded in 2013 by co-founders Adam Edward Wible, Cristina Junqueira, and David Velez. In addition to TCV, existing backers Tencent, DST Global, Sequoia Capital, Dragoneer, Ribbit Capital and Thrive Capital also participated in the round.
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Revolut tweaks business accounts with new pricing structure
Fintech startup Revolut announced changes to its business accounts this week. The good news is that if you were thinking about trying Revolut for your business needs, it’s now cheaper to get started. But there are some limits.
While Revolut is better known for its regular consumer accounts that let you receive, send and spend money all around the world, the company has been offering launched business accounts for a couple of years.
The main advantage of Revolut for Business is that you can hold multiple currencies. If you work with clients or suppliers in other countries, you can exchange money and send it to your partners directly from Revolut’s interface.
The company also lets you issue prepaid corporate cards and track expenses. Revolut for Business also has an API so you can automate payments and connect with third-party services, such as Xero, Slack and Zapier.
None of this is changing today. Revolut is mostly tweaking the pricing structure.
Previously, you had to pay £25 per month to access the service with a £100,000 top-up limit per month. Bigger companies had to pay more to raise that ceiling.
Now, Revolut is moving a bit more toward a software-as-a-service approach. Instead of making you pay more to receive and hold more money, you pay more as your team gets bigger and you use Revolut for Business more intensively.
The basic plan is free with two team members, five free local transfers per month and 0.4% in foreign exchange fees. If you want to add more team members or initiate more transfers, you pay some small fees.
If you were paying £25 before, you can now top up as much money as you want in your Revolut account, but there are some limits when it comes to team members (10), local transfers (100 per month) and international transfers (10 per month, interbank exchange rate up to £10,000).
Once again, going over the limits doesn’t necessarily mean that you need to change to a new plan. You’ll pay £0.20 per extra local transfer, £3 per extra international transfer, etc.
Here’s a full breakdown of the new plans:
If you’re a freelancer, there’s now a free plan. You’ll pay 0.4% on foreign exchange and £3 per international transfer, but there’s no top-up limit anymore.
Similarly, the old £7 plan for freelancers has been replaced by a new £7 plan that removes the limit on inbound transfers but adds some limits on transfers.
It’s good news if you’re a small customer. But if you vastly exceed the transfer limit in one of the categories, you might pay more than before. With this change, the company wanted to make Revolut for Business more accessible instead of making small customers subsidize bigger customers with high entry pricing.
Existing customers can switch to a new plan starting today. Revolut plans to switch everyone to the new plans on October 1st, 2019.
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Learn how to change banking one dollar at a time at Disrupt SF
Fintech startups are the hot new thing. Everybody wants to reinvent the way you manage money, invest and pay for things. That’s why we’re inviting three fintech experts to TechCrunch Disrupt SF to help you learn everything about the space.
They know that the bank of the future is not necessarily a bank and that the payment method of the future is not necessarily a card. And they’re going to tell you all about it.
First up is Chris Britt, the founder and CEO of Chime. While there are plenty of challenger banks in Europe, Chime is a rare success in the U.S. market.
The company has managed to attract over 3 million customers and $300 million in funding with a simple value proposition — a better user experience, an automatic way to save money and no fees for basic features. But Chime isn’t an overnight success. Britt has amassed a ton of experience in retail banking as chief product officer at Green Dot and as a senior product leader at Visa.
We also invited Angela Strange, a general partner at VC firm Andreessen Horowitz . As a founder of a fintech startup, you might want to know what investors are looking for. And Strange is an expert on this front.
She focuses on financial services of all sorts, including insurance, real estate and increasing inclusivity. She’s a board observer at Branch, Earnin, HealthIQ, Mayvenn, PeerStreet and Point. As you can see, it’s an impressive portfolio, and she has encountered a ton of different situations in the fintech industry.
And finally, Omer Ismail from Goldman Sachs has seen both sides of the banking coin. After many years working in private equity investing and investment banking, he was asked to lead an unusual team — the consumer business of Goldman Sachs.
Goldman Sachs hasn’t been a powerful brand when it comes to consumer products — until very recently. The company successfully launched Marcus, a banking product focused on personal loans and online savings with high interest rates, and Clarity Money, a mobile app that acts as a financial dashboard.
More recently, Ismail was in charge of the surprising partnership with Apple for the Apple Card. It’s clear that he knows where the industry is heading, so you’ll want to learn a few tips from Ismail.
Buy your ticket to Disrupt SF to listen to this discussion — and many others. The conference will take place on October 2-4 at the Moscone Center in San Francisco.
In addition to fireside chats and panels, like this one, new startups will participate in the Startup Battlefield to compete for the highly coveted Battlefield Cup.
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N26 announces N26 You, a revamped premium account
Challenger bank N26 has unveiled a new premium plan called N26 You. This plan replaces N26 Black with the same benefits and a few tweaks.
N26 is keeping its three-tier system with a free basic bank account, a premium account (N26 You) and a super premium account (N26 Metal). With N26’s free plan, you can pay anywhere in the world without any foreign transaction fee, but there’s a 1.7% markup on ATM withdrawals in a foreign currency.
N26 You costs the same price as the previous premium plan N26 Black, €9.90 in the Eurozone and £4.90 in the U.K. In addition to a travel and purchase insurance package, you can withdraw money without any foreign transaction fee (€9.90 is roughly what you’d pay in fees if you withdraw the equivalent of €580 with a free N26 account).
You also can create up to 10 Spaces to organize your money with savings goals, separate sub-accounts and more — free accounts can only create two Spaces.
And, of course, you get a better-looking card. N26 is reusing its pastel color palette to give you more options. You can now choose between five colors — Aqua, Rhubarb, Sand, Slate and Ocean. The card has a minimal design with a tiny N26 logo in the top-left corner, a transparent line at the bottom of the card and a solid color background.
N26 also plans to add perks to the N26 You plan, such as discounts on Hotels.com, WeWork, GetYourGuide, Babbel, Blinkist and Bloom & Wild. Those perks were limited to N26 Metal customers in the past, so it’s going to be interesting to see how the lineup will work once those perks are added to N26 You. If you’re an existing N26 Black customer, you automatically become an N26 You customer.
Changing N26 Black to a premium plan with multiple card designs might seem like a small detail, but it potentially opens up a lot of possibilities. You’ll soon be able to order an additional card.
Eventually, you could imagine having a blue card associated with your main account and a yellow card associated with a shared Space sub-account, for instance. At least, that’s what I hope the company will do.
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