Welcome to TechCrunch Fintech! This week, we look at how two fintech companies serving the underserved are doing and more!
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The big story
PayJoy is an example of a company with positive financials and a mission to help the underserved. It’s not often that we see these two things cross paths, so when we do, we get pretty excited. I wrote about the company’s milestone of reaching $300 million in annual revenue and profitability last year, while also managing to raise $150 million in Series C funding. The company’s model is unique: It helps people build credit through smartphone financing. Once the phones are paid off, customers can apply for loans through PayJoy using their devices as collateral. Read all about its development here.
Analysis of the week
Petal is another fintech company that aims to help the underserved “build credit, not debt.” Last May, TechCrunch wrote about the company’s $35 million raise and plans to spin off its data unit. Last week, Empower Finance announced plans to take over Petal, which apparently began looking for buyers last year “when it was short of cash,” according to Luck. A Petal representative told me via email: “Like Petal, Empower… uses cash flow underwriting for its suite of credit products. … With the acquisition of Petal, it will soon have a family of credit cards to complement this offering.” Will we see more M&A in 2024? I can’t wait to see.
Dollars and cents
TransferGo, the UK-based fintech best known as a consumer platform for global remittances, has raised a $10 million growth funding round from Taiwan-based investor Taiwania Capital to expand into the Asia-Pacific region. It last raised a $50 million Series C funding round in 2021. TransferGo claims its growth, combined with the new investment, doubles its valuation.
What else are we writing?
Brazilian startup Salvy, an enterprise mobile company, was the only company based in Latin America in Y Combinator’s latest batch, the accelerator confirmed to TechCrunch’s Anna Heim. This is a significant drop compared to cohorts that passed through the gas during COVID when it was remote, but also with more recent lessons. For example, there were 33 Latin American companies in Y Combinator’s Winter 2022 batch. Could the overall state of the fintech industry be partly to blame? Historically, about a third of the 231 Latin American companies that passed through YC focused on fintech. And with fintech funding in decline, this could perhaps partly explain YC’s lack of interest in LatAm.
High interest titles
Investors are circling the ‘most hated’ sectors of fintech and e-commerce
Stride and Utah set new precedents in benefits for the self-employed
US startup Parafin acquires $125 million warehouse from SVB and Trinity Capital
Tabs Secures $7M in Seed Funding to Enhance AI-Powered Accounts Receivable Platform
UAE fintech Fortis secures $20M in Series A round
Anrok achieves $250 million valuation with a secular idea: computing
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