UpEquity, a digital mortgage company that makes cash offers on a buyer’s behalf, has raised $20 million in equity funding and secured $30 in debt financing. UpEquity has seen 500% year-over-year growth in revenue and transaction volume. It will originate more than $1 billion in mortgages over the next 12 months. UpEquity has so far worked with “thousands” of buyers. The startup pledges faster closing times, it reduces closings from the industry standard of about 50 days to 18. Its goal within the next year is to reduce that to an average 10-day close. The company also claims to offer lower interest rates than other companies in what it describes as the “power buying” space, with no incremental fees. UpEquity also can turn clients into all-cash buyers so they don’t risk losing a desired home in a competitive situation.
Traditional banks can and should get ahead of the curve by integrating more customer-specific perks that could possibly retain digital natives debating whether to take the neobank plunge. Technological integration will be key to this endeavor as customers will expect a fairly seamless, curated experience that larger banks may be more equipped to create. Values-based banking, and mission-based interactions overall, are an integral piece of the neobank approach. In an age of online activism and increased individual expression, customers are looking for more than a reliable financial institution to deposit their hard-earned cash. Rather than competing with larger banks at the generic level by casting a wide net, neobanks aim to offer specific perks that align with their target audience.
- Daylight, a challenger bank that aims to serve the LGBTQIA+ community, lets customers know how LGBTQIA+-friendly their spending is, in addition to receiving up to 10% cashback on LGBTQIA+-owned bars and allied businesses.
- Beyond addressing personal values, neobanks differentiate themselves as drivers of industry, reaching out to small-business owners and gig workers who may have a more difficult time obtaining loans or opening a business account due to poor financial history or a failure to meet a minimum income threshold. E-commerce challenger bank Juni quickly caught on to this phenomenon, crafting a digital banking model with built-in invoice fetching and customizable financial reports while claiming to accelerate cashflow via its own credit product backed by multiple partnerships.
- Philanthropic giving, in alignment with the personal values and identities of neobanks, greatly bolsters their claim to not only be a more efficient, modern option but a purpose-driven one. For example, Daylight promises to donate $10 for every eligible sign-up. Although larger banks may not look to attract new customers in this manner, they could attach such philanthropic promises as an incentive to open a new account or credit card. The essential piece of this giving strategy is that it’s simple and already done, placing pressure on traditional banks to offer giving options just as effortlessly.
- Fintech Douugh has partnered with Zero Hash to integrate cryptocurrency wallet and trading capabilities into the Douugh app. The partnership will initially allow customers to buy, hold and sell crypto in the US directly through Douugh’s Crypto Jar feature on the Douugh platform. Customers will also be able to spend using the cryptocurrency of their choice through the Douugh Mastercard debit card. Zero Hash is a digital asset settlement and custody platform that specializes in building enterprise-grade solutions. Through its platform, Zero Hash powers the cryptocurrency offerings of other fintechs such as MoneyLion and Wirex.
- This feature further broadens the Douugh Wealth offering, which recently saw the launch of managed portfolios ‘Portfolio Jars’ linked to dedicated savings goals. The Crypto Jar offering will allow consumers to directly participate in digital asset investing and diversify their portfolios across cryptocurrencies. Douugh’s Crypto Jar will allow even more Americans to participate in the decentralized financial ecosystem. Under the partnership, Douugh customers will agree to the terms and conditions of Zero Hash when they activate the Crypto Jar offering. The partners will have a revenue share model based on customer activity.
X1, the challenger credit card for digital natives founded by former Twitter executives, is rolling out of private beta to a waitlist of 350,000 people. The stainless steel X1 Card uses current and future income instead of credit scores to set smart credit limits. The startup’s proprietary technology also lets cardholders cancel subscription payments in one click, end free trials automatically with auto-expiring virtual credit cards, get instant notifications on refunds, attach receipts to purchases, and create virtual cards for one-time use. The firm initially promised up to 5 times higher credit limits than average credit cards but says that in the beta, customers’ X1 limits are 7.5 times higher. Within 60 days of having the card, 45% of customers started using X1 for the majority of their spending.
- The next generation of app-based brokers have embraced the engrossing traits of social media that Robinhood pioneered — though in their case, it’s not about hitting ‘Like’ or retweet, but instead buying and selling shares, options and cryptocurrencies.
- The U.S. Securities and Exchange Commission has called out the downsides of reward systems and behavioral nudges in the industry. The agency is now reviewing public feedback about whether the so-called gamification of trading is bad for investors, akin to the addictive habits spurred by gambling. But the burgeoning popularity of apps such as Robinhood, Webull Financial and SoFi Technologies Inc. presents a challenge, as any changes would hit billions of dollars of trades. And no matter how controversial some practices are, defining the boundaries of what’s acceptable could be slippery. Beyond creating a game-like environment, some online brokerages dangle prizes such as iPads and Tesla Inc. shares. One even has a “stock party” website where users can fire off confetti while waiting for share giveaways. It’s an approach that’s been wildly successful. Some academics express concern compulsive trading is on the rise. Webull traders can spin a virtual Wheel of Fortune for a chance at Tesla stock.
- There are other “awesome” prizes, including a $5,000 gift card and Apple products such as an iPad. In a previous promotion, Webull advertised $2,500 toward a vacation. SoFi dangles as much as $1,000 in free stocks, accompanied by an illustration of a pile of wrapped gifts. While investing isn’t a game or a path to getting rich quick, “we offer incentives so novice investors can learn that investing is for them, too,” Stash Financial’s stock party, meanwhile, “is designed to teach the importance of diversification via exposure to new investments.
CapWay, Inc., a financial technology startup based in Atlanta, has announced the launch of its neobank, the core service in its financial system of inclusive products and services. With a CapWay Money Account and CapWay Visa (virtual and physical) debit card, benefits include the ability to make online transactions, send and receive money, and round-up change per transaction to direct towards “Money Goals.” With CapWay Money Accounts, there are no monthly, minimum balance, nor overdraft fees, and account holders can get their direct deposit early, which allows more of their money to work for them. CapWay’s saving product, Money Goals, enables users the option to share their money-saving progress or ask for financial contributions from family and friends to achieve their Money Goal. In addition to a debit card, CapWay offers financial content and education through its platform. CapWay financial literacy programming, called Phunds, is available to different organizations – including employers, schools, and community organizations. Individuals can also subscribe to Phunds programs and modules.
Fintech Brex is expanding its capabilities to allow seamless access to its offerings globally as well. This new expansion allows startup founders to be able to scale their business using Brex’s unique Financial OS from anywhere: accessing credit cards, business accounts, spend management software, and venture debt services. Founders from around the world can now sign up for a Brex account in just 10 minutes. They can apply so long as they have a US Incorporation, US EIN, a US billing address, and US operations. Brex has partnered with Firstbase to help founders quickly and easily incorporate their businesses in the US. A lot of customers struggle with establishing business credit and accessing great financial tools–especially when they’re first-time founders. Brex makes it easy and sets customers up with the tools for success. This expanded capability will help Brex create a community of global founders and providing all startups with the right tools to manage their finances – so that they can better focus on building and growing their businesses.
Monzo has launched a new product for Monzo Business customers that uses its technology expertise to remove unnecessary admin and make getting paid faster and easier. Monzo has given 1,000 business customers early access to the product, with the businesses who used it being 70% more likely to be paid within 3 days compared to before. With this new product, businesses can now request payment and get paid directly by creating a payment link or invoice in just a few taps. Monzo is reportedly giving businesses more flexibility with the ability to now accept payment by card or by free Easy Bank Transfer (Open Banking) – this will also improve things for their customers, who no longer need to type out manual bank transfers. Every part of getting paid (invoicing, card payments, banking, easy bank transfers, automatic reconciliation) now sits in the Monzo Business account, with instant payment confirmations and complete visibility of overdue, due, and paid invoices at a glance.
SoFi Technologies Inc is likely to generate strong revenue growth as it gains a share in the consumer financial services wallet, according to Morgan Stanley. Although competition in the fintech space is rising, the company is “leading with lending; specifically refinancing a high yield student loan into a lower rate. Lending generates higher customer loyalty and a “lending first model generates customer leads for SoFi’s other services,”. Sofi’s customer base can double in the next 2 years, from 2.6 to 5.3 million, after more than doubling over the past year from 1.2 million. Financial Services revenue growth is a key driver of SoFi’s growth model and looking for ~150% CAGR over the next 2 years as SOFI doubles its customer set and expands its product offerings.
A Fidelity study shows unprecedented growth in women opening retail investment accounts, with a record 43% year-over-year increase since last summer. Millennials are the ones driving the upward trend. Half of the survey respondents have become more interested in investing since the start of the pandemic. Forty-two percent now have more to invest, and 67% are investing savings outside of their retirement and emergency funds. Those investments are going primarily toward individual stocks and bonds. The trend coincides with the overall jump in retail investors entering the stock market over the last year. A growing population of retail investors in the public markets has been spurred by more time spent in front of a computer, large amounts of liquidity in the markets, and zero-commission trading. Many retail traders are using social investing platforms to buy and sell assets. Public.com, an investing app popular among new investors says 40% of its member base is made up of women. Educating new participants is key. Only 4-in-10 women are comfortable with their investing knowledge, and 70% of the respondents would need to learn more about picking individual stocks before they could get started. The upward trend of women investing is expected to grow, with nine in 10 of those surveyed saying they plan to take steps within the next 12 months to help their money grow.