🌊The Fintech Wave #49
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TLDR: Somebody on Twitter asked where to invest $50K to start a cash flow business - check the answers, pretty good ideas out there. The corporate credit card market is getting crowded. Buy Now Pay Later for healthcare bills. Marketplace app for student loans. CRM to manage web3 fundraising.
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It’s started - everybody wants to offer corporate credit cards💳 for startups
Spend management software and corporate credit cards for startups are “the current thing” - everybody wants to compete in the $100 Trillion market of corporate spending; a rare example where the pie is big enough for everyone. A few days ago, the HR platform Rippling also launched its spend management platform and credit card. Currently, there are over well-funded 20 startups competing in this space in the USA. These are some of the current players👇
Startups tend to spend a lot of money on credit cards - think about cloud computing and ads - tens of thousands of dollars. These corporate cards earn more than 2.5% interchange on spend, so it is a great revenue stream for the card issuer.
For example, Bill.com, a popular software for automating payments for SMBs, issued their credit card, and almost 70% of its Q1 2022 revenue came from payment processing.
European News and Funding
Latvian Startup is issuing bonds💸
We came across on pretty unusual thing for startups - bond issuing.
Bonds are debt securities issued by corporations, governments, or other organizations and sold to investors. Bonds also tend to pay regular and stable interest, making them well-suited for those on a fixed income.
It is unusual for startups to issue bonds, but in this case, it makes sense. This is the first time I heard about Sun Finance and this is by far the best lending consumer app I came across.
Sun Finance is an online and mobile lending platform. Stats of this fintech are impressive: 9M customers with over $1.5B issued in loans and the company is profitable.
They offer a couple of different landing products:
Buy Now Pay Later (up to 36 months and up to €5,000)
Installment loans (up to 48 months and €10,000)
Open Line of Credit (from €200 to €4,000)
Microloans (between €50 and €2,000)
The minimum investment in the bonds will be €100, 000.
Americas News and Funding
Buy Now Pay Later for healthcare⚕️
Buy Now Pay Later for healthcare is only possible in America. We all know how broken the healthcare system is in the USA. It is ridiculous that people don’t know how much they will be charged for a doctor's visit. Usually, these are surprisingly high bills. Scratch Financial raised $35M to help patients finance medical bills.
Buy Now Pay Later is everywhere, it was just a matter of time before it came to healthcare. Scratch offers patients options to pay for the healthcare bill in 5 installments with no interest. This also brings more business to hospitals if they can offer a more affordable way to pay. More than 10,000 practices use Scratch's payment and financing tools.
Search and compare student🎓 loan offers
Sparrow, an app that facilitates student loans raised $5.83M. With 43 million Americans in student debt, the market size for this niche is big.
I would expect Sparrow makes money from affiliate marketing. So far, the app facilitated more than $200M in student loans. This app works like a marketplace for student loans - users can shop around to get the best rates. Also, they can refinance existing loans at a better rate.
STARTUP IDEA: I don’t think anybody did this for the European market. I know that market for student loans is much smaller in the EU, but it would still make sense. Especially, for students that are planning to study abroad for a year or two, to browse through the loan offers.
Crypto ₿ites
Fundraising platform for web3🖼️projects
Managing the fundraising process with tokens is a nightmare. Technology is still new and solutions are being built as we speak. One of them is Presail, which just raised $3.8M to help manage web3 fundraising.
Presail allows anybody to launch a web3 project, raise money, give tokens in return and manage to vest. Most projects still use Excel to track everything, but Presail allows project managers to collaborate, manage cap tables, automate vesting schedules, and implement KYC and AML. The startup claims that more than $100M is already facilitated via the platform.
Also, the website design is excellent and whoever did it should get a raise.
ETH price graph
Just a quick look at the Ethereum graph. It is on a good way to going below $1000 by the end of the year. A few days ago, Ethereum switched on its proof-of-stake mechanism because it is more secure, less energy-intensive, and better for implementing new scaling solutions compared to the previous proof-of-work architecture. Even this didn’t help with the price.
Tweets and Threads of the Week
🌊The Fintech Wave #49
A lot of fintech is focused on credit. What does that mean when interest rates skyrocket and creditors default? A fintech fueled financial crises?