Welcome to TechCrunch Fintech! This week, we look at the ongoing fallout from Synapse’s bankruptcy, how Layer wants to disrupt SMB accounting, and more!
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The big story
The prospects for struggling banking-as-a-service (BaaS) startups. Synapse went from bad to worse last week when a US trustee filed an emergency motion seeking to convert the company’s Chapter 11 debt restructuring bankruptcy into a Chapter 7 liquidation due to “gross mismanagement” of its assets. Apparently, up to 20 million fintech depositors are at risk as a result bankruptcy. As Jason Mikula of Fintech Business Weekly References“Many fintech end users who had their ability to access their funds frozen shared the devastating impact it had on their lives with the court and the hundreds of attendees invited to the hearing [on Friday].” Unfortunately, the fallout from the Synapse collapse continues.
Analysis of the week
There seems to be real appetite for an alternative to QuickBooks, the legacy accounting alternative for SMBs, judging by the attention this story received about Layer’s $2.3 million raise. Layer leans toward what it describes as a better user experience through integrated accounting. Its customers are those that work with small and medium-sized businesses to offer accounting and bookkeeping capabilities within their own products. Better Tomorrow Ventures led the pre-seed investment in the startup and with it a team of executives at companies such as Square, Plaid, Unit and Check.
Dollars and cents
PayHOA, a Kentucky-based startup that previously launched software for self-managed home owner associations (HOAs), is an example of how real-world problems can be translated into opportunities. It just raised a $27.5 million Series A round in an environment where Series A rounds of nearly $30 million are no longer common.
Buy now pay later services have become so ubiquitous that BNPL might just be another way of saying “debt”. But in Mexico, where the BNPL platform Aplazo works, a big one underbanked population makes BNPL more like an alternative to cash. A recent $45 million Series B round led by QED Investors will help it further expand its reach, both virtual and physical.
Speaking of QED, it also led a $10 million round Glorywhich uses artificial intelligence to understand consumer spending habits to then provide more personalized financial advice.
Aeropay, a bank-to-business payment solutions provider that started helping cannabis retailers and gaming companies with their payments, is now entering Visa and Mastercard territory by innovating payment networks. And it just raised $20 million in a Series B round.
What else are we writing?
The Consumer Financial Protection Bureau (CFPB) is suing SoLo Fundsa fintech company that enables peer-to-peer lending, alleging that the company used “digital dark patterns” to defraud borrowers and charged illegal fees while advertising to consumers that there were no fees.
High interest titles
CFPB Takes Action Against Chime Financial for Unlawfully Delaying Consumer Refunds
Deel works with Carta to offer capital gains tax withholding capabilities
Insurtech Cover Genius Raises $80M in Series E Funding (TC covered its latest hike here)
Yendo raises $165 million for ‘vehicle-secured’ credit card.
FinLocker raises $17 million in Series B funding round
Bunq enters the insurance market through a new partnership
Square adds new integrated solutions for restaurants
Integrated accounting startup Teal raises $8 million
ICYMI: Baselayer raises $6.5 million in seed funding
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