based in Miami Onyx Privatea Y Combinator-backed digital bank that provided banking and investment services to high-earning Millennials and Gen Zers is ending its banking operations.
In a March 13 email to a customer seen by TechCrunch, the subject line read: “Important Notice: Termination of Bank Operations and Account Closure” Onyx wrote, “We are writing to inform you of our decision to discontinue our services and begin closing all related accounts effective today.”
Co-founder and CEO Victor Santos confirmed to TechCrunch that the company was “moving away from the B2C model,” but said it was changing its business model, not shutting down.
Y Combinator has listed the company as “inactive” in its name Website, which Santos could not explain. (Update: The text has since been updated after publication).
He said Onyx will shift to a “white-label B2B platform-as-a-service model for community banks, regional banks and credit unions” looking to launch digital applications built for young affluent consumers. Santos claimed that Onyx had been exploring the idea for the past year and had made developments with some partners.
Less than a year ago, in May, the startup announced that it had raised $4.1 million in venture funding from investors such as Village Global, Y Combinator, Global Founders Capital, One Way Ventures, 186 Ventures and Olive Tree Capital. At the time, the company said that since its launch nearly a year ago, Onyx Private – which it said it wanted to be the “next-generation UBS” – had grown 30% month-on-month and was processing more than 4 million dollars in paid transaction value per month. It also claimed to be approaching $5 million in TPV (total payment volume).
Santos today declined to disclose how many banking clients Onyx had. Although a source told TechCrunch that regulatory issues may have played a role in that decision, Santos dismissed it, telling us that no regulatory issues caused the startup to shut down direct-to-consumer banking.
He added: “It was purely a strategic decision that allowed us to tap into our existing FI base [financial institutions] and use the technology we’ve built to scale in a more capital-efficient way.”
At the time of fundraising, the company had appointed Piermont Bank as its banking partner. Today on him WebsiteOnyx says that “banking services [are] powered by i3 Bank.” Santos told TechCrunch that Onyx “started with Piermont, but switched to i3 last year.”
Piermont declined to comment. TechCrunch has reached out to i3 for comment.
In the email, bank customers were told that the shutdown would take place on April 14, but that “discontinuing our rewards program’ was ‘effective immediately’.
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