Welcome to TechCrunch Fintech! This week we look at how two fintech companies serving the underserved are doing, and more!
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The big story
PayJoy is an example of a company with positive unit economics and a mission to help underserved people. It’s not often that these two things intersect, and when we do, we get pretty excited. I wrote about the company’s milestone of achieving $300 million in annual revenue and profitability last year while also receiving $150 million in Series C funding. The company’s model is unique: It helps people build credit through pay-as-you-go financing for smartphones. Once the phones are paid off, customers can apply for loans through PayJoy using their devices as collateral. Read all about its growth here.
Analysis of the week
petal is another fintech company that aims to help disadvantaged people “build credit, not debt.” Last May, TechCrunch wrote about the company’s $35 million raising and plans to spin off its data division. Last week, Empower Finance announced its plans to acquire Petal, which apparently began looking for buyers last year “when it was strapped for cash,” according to Fortune. A Petal spokesperson told me via email: “Like Petal, Empower… leverages cash flow underwriting across its credit product range.”…With the acquisition of Petal, there will soon be a family of credit cards to complement this offering.” We will be in the Experience more M&A in 2024? I’m looking forward to it.
Dollars and cents
TransferGo, the UK-based fintech company best known as a consumer platform for global remittances, has raised a $10 million growth funding round from Taiwanese investor Taiwania Capital to expand in Asia Pacific. The last Series C funding round of $50 million took place in 2021. TransferGo claims that its growth combined with the new investment doubles its value.
What else we write
Brazilian startup Volleys, an enterprise wireless carrier, was the only Latin America-based company in Y Combinator’s latest batch, the accelerator confirmed to TechCrunch’s Anna Heim. This is a significant decrease compared to cohorts that went through the accelerator during the COVID period, when distance learning was still in place, but also to more recent courses. For example, in Y Combinator’s winter 2022, 33 Latin American companies were represented. Could the overall health of the fintech sector be partly to blame? Historically, about a third of the 231 Latin American companies that went through YC were focused on fintech. And with fintech funding declining, this could potentially partially explain YC’s lack of interest in Latin America.
Very interesting headlines
Investors are circling the “most hated” fintech and e-commerce sectors
Stride and Utah have set new precedents in self-employment benefits
US startup Parafin is acquiring a $125 million warehouse facility from SVB and Trinity Capital
Tabs secures $7 million in seed funding to enhance AI-driven accounts receivable platform
United Arab Emirates fintech company Fortis secures $20 million in a Series A round
Anrok reaches a $250 million valuation with a banal idea: computing
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