The shocking allegations against Daylight, an LGBTQ+-focused startup

Image credit: Getty Images

welcome to The exchange! If you received this in your inbox, thank you for signing up and your declaration of confidence. If you are reading this as a post on our site, please register here so that you can receive it directly in the future. Each week, I’ll take a look at the hottest fintech news from 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 up to date. — Mary Ann

Last week ended with an explosive feature published by NY Magazine. The article at home Daylight, an LGBQT+-focused neobank whose seed and Series A raises TechCrunch had covered here and here respectively. The portrayal of CEO and founder Rob Curtis was so far from the polite leader I interviewed that it made me question my own character assessment. Lawsuits, fabrications and inappropriate behavior are among the many allegations reported in this in-depth feature. One person who tried the bank’s service shared with me that apart from being allowed to use their chosen name on a card, they “didn’t 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 company’s spending space. Last week I wrote about Ramp reported 4x revenue growth by 2022. That made me curious about other companies in the area, so I pinged a few of them. An Air base The spokesperson got back to me and shared via email, “We grew 2X across the key dimensions of ARR, payment volume and number of paying customers. It is important to point out that the majority of our income is high-margin and subscription-based, in contrast to most companies focusing on exchange income in our area. We choose not to play the crude ARR obfuscation game…” Ouch. Meanwhile, last week I neglected to include it Brex had expanded into the travel space. This company has supposedly ruffled some feathers, though, lately, according to AwardWallet, by devaluing “cash and crypto redemptions by 40% and cutting Brex Rewards points transfer rates to airline partners by over 40%” with little or no notice. Twitter was also sour about the news, if this chirping is any indication. I contacted the company but had yet to hear back.

Other weekly news

Haje Jan Kamps reports: “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 cannot trust any national institutions as your business partners. One of the most important places that emerges is in payments and payment processing; even after recreational cannabis was legalized in 21 states and decriminalized in a dozen or so, cannabis has largely become a cash business. In a world that is becoming increasingly cashless, it is a problem for both consumers and businesses. Smoakland is currently beta testing a loophole that allows customers to pay by credit card. The secret, it turns out, is crypto.” More here.

Anna Heim reports: “If you think built-in insurance is the only hot thing in insurtech these days we have a surprise in store for you: While it’s true that startups that help sell insurance along with other products and services are enjoying tailwinds, there are plenty of other opportunities in the space, several investors told TechCrunch+. More here.

I contacted the payment company Checkout.comits 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 in general and why she sees so much opportunity in the US. asked how she felt about the comparisons to Stripe … and her answer might surprise you. More here.

Reports Kyle Wiggers: “Confluent co-founder Neha Narkhede today announced a new fintech company, Oscillate, which is developing an ‘AI-powered’ 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, contributed themselves. Narkhede says they chose not to take external funding so they could quickly build and scale the company as it goes public. More here.

Reports Kyle Wiggers: Months after the unveiling of a “big 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 will begin inviting randomly selected users to access a preview version of Apple Pay Later, with plans to offer it to all “eligible” users on iOS 16.4 or iPadOS 16.4 during the 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 a credit card is a unique feature of the BNPL product that should limit the ability of borrowers to pay off a form of debt with another form of debt, although it does not fully address our broader concerns about 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 where the leader “talked candidly about the problems Union54 faced when it had to cease operations due to 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: “Payment giants Visa and MasterCard is reportedly among a number of firms competing to buy the Brazilian payments and banking platform Pismo. News reports say the firm is working with Goldman Sachs on a potential sale at a reported $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 made an initial offer of $1 billion that was rejected by Pismo, after which Visa increased its bid to $1.4 billion. More here. TechCrunch covered Pismo’s $108 million raise in October 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, Latitude, a self-described “tech entrepreneurship program” for the Latin American region backed by Andreessen Horowitz and NFX, “launched business accounts.” According to co-founder Brian Requarth, the move was made in part because “most of the founders in LatAm worked with SVB. . . . There’s a gaping hole,” he said via email. “We’d been working on this for months, so we decided to launch it.” TechCrunch covered Latitude’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 affected are the chief administrative officer, president of the MENA region, and vice presidents of business development, HR and product design. As a source shared, Aspiration had planned to go public but has yet to complete its SPAC. The SPAC requested an extension to June 9 to complete the merger. Notably, according to its website, it has “turned to selling carbon credits to businesses rather than the eco-friendly neobank most people may know them as,” the source said. TechCrunch reached out to Aspiration, but did not receive a response. The company has raised around $250 million in known funding.

Report PYMNTS: “App for family finances Green light has unveiled an integration for banks and credit unions. Greenlight for Banks…allows financial institutions to add Greenlight’s app to their financial service offerings…With the app, banks can offer customers Greenlight’s tools to earn, save and spend. Additionally, parents can automate allowances and send money instantly, while kids and teens get “hands-on experience managing money with parental supervision,” the company said.

Other headings

Equals Money launches a new expense management platform in the US

Novo launches working capital program for small businesses

Pinwheel launches smart branch to bring payroll connectivity to brick-and-mortar bank branches

Secfi and Daffy.org work together to make charitable giving seamless for advisory clients

Has fintech lost its shine? What VC investors need to see from founders

Checkout.com President Céline Dufétel Image credit: Checkout.com

Financing and M&A

See TechCrunch

Salt Labs raises $10 million to gamify frontline work

StellarFi lands $15M to help people build credit by paying bills, rent on time

Paytrix raises $18.3 million to expand its one-stop payment shop

Payday wants to power the future of work for Africa with $3M seed led by Moniepoint Inc

Amazon-backed Acko is approaching $120 million in new funding

And other places

Mexican restaurant payment startup Pacto raises $4 million in seed funding

Investing.com buys StreetInsider for $10 million

Personal finance app Playbook captures $7 million in Series A funding

Stratyfy raises $10 million to advance AI-powered lending

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! Join us – it’s going to be amazing.

Next week we will be taking a break due to the Easter holidays, but I will be back on the 16th of April. Until then, please take care! And as always, thanks for reading and sharing this newsletter. xoxo, Mary Ann