Since the start of the pandemic, Americans have been able to access free weekly credit reports.
Consumers were previously entitled to one annual credit report from each of the three major bureaus.
Advocates argue that such reports should remain free, with consumers able to easily dispute inaccurate data.
During the earliest days of the coronavirus pandemic in April 2020, the three major credit bureaus — Equifax, Experian, and TransUnion — announced that they would offer free weekly credit reports in response to the public health emergency.
Before 2020, consumers were legally entitled to one free yearly credit report from each of the three bureaus at annualcreditreport.com, but the pandemic-related change was extended through 2021 and 2022, and has also been extended through December 2023.
However, with President Joe Biden set to end the COVID-19 national and public health emergencies in May, the future of free weekly reports remains up in the air.
Why is it so important for consumers to continue having such a resource? And what can be done to keep free weekly reports for consumers in a post-pandemic world?
Even with weekly reports, nearly a half million consumer complaints
In the wake of the pandemic, the availability of weekly credit reports has aided Americans in monitoring their credit histories, but the three credit bureaus are still the subject of complaints from many consumers.
The Consumer Financial Protection Bureau (CFPB), the US government agency created in 2010 to protect consumers against financial malfeasance, stated in a January 2023 report that from October 2021 to September 2022, it had sent over 488,000 consumer complaints to the three major credit bureaus.
"Even when consumers are successful in having their complaint addressed, complaints call into question the underlying data contained in consumers' credit reports," the report read. "Through the CFPB's complaint process, the CFPB frequently encounters consumers who attempt to have inaccurate information corrected only to have different outcomes at each of the NCRAs [nationwide consumer reporting agencies] or the wrong information changed."
The CFPB report did identify improvements that were made by the credit reporting agencies, namely that most consumers have begun to receive substantive responses after addressing complaints, while there has also been a sharp increase in "more tailored complaint responses" and higher rates of relief to individual complaints.
But many consumers have continued to register their grievances with the CFPB.
Ed Mierzwinski, the senior director of the federal consumer program at the US Public Interest Research Group, a consumer advocacy organization, told Insider that the big three credit bureaus are "the No. 1 complaint at the Consumer Financial Protection Bureau."
"What are the complaints? 'They made a mistake and they didn't listen to me when I said to fix it.' So the credit bureaus are in a big fight with the consumer bureau over this issue," he said.
Credit reports are a relatively recent phenomenon with an enormous amount of power
In 1970, the Fair Credit Reporting Act (FCRA) was passed, putting into place legislation intended to advance the accuracy and privacy of personal information contained in the files of credit reporting agencies.
Over the next 30 years, advances in technology, notably the exponential growth of the internet in the 1990s, prompted policymakers to consider additional changes to the existing law. Consumer groups and many lawmakers were also alarmed by the difficulties that consumers faced in finding errors in their respective credit reports, along with the growing issue of identity theft, which was becoming increasingly prevalent in the digital age.
President Biden is set to end the COVID-19 health emergency order in May.
AP Photo/Jacquelyn Martin, Pool
In December 2003, the Fair and Accurate Credit Transactions Act (FACTA) was signed into law by then-President George W. Bush as an amendment to the FCRA, affording Americans a free yearly credit report from the three major bureaus through the aforementioned Annual Credit Report website. The act also sought to tackle the proliferation of identity theft, which in 2002 had cost US lenders at least $1 billion, according to NBC News.
Navigating the credit reporting system in the United States requires skill and often a good deal of patience.
Applying for a credit card? Your score better be in great shape, or you could get a higher interest rate. If you're shopping for a mortgage, an excellent score could land you a lower interest rate for a home, while even a good score with one negative mark on your report can lead to rejection.
Many consumers have had inaccurate information posted on their reports, unknowingly dragging down their scores before being forced to file disputes that can take weeks to resolve.
In the years leading up to the pandemic, identity theft had not only become more prevalent, but many consumers still had issues navigating the credit reporting system, a problem made worse by the limitation of getting just one free annual report from each of the three major credit bureaus.
Lots of people want to completely overhaul the flawed and costly system
The Comprehensive Credit Act, sponsored by Rep. Ayanna Pressley of Massachusetts, would have established an appeals process for credit report disputes, offered free credit reports and scores to consumers disputing items on their respective reports, and expedited the process for withdrawing information about debt that was paid off, among other reforms. Meanwhile, the Protecting Your Score Act, introduced by Rep. Josh Gottheimer of New Jersey, would have created a central online portal giving Americans free credit scores and implemented a credit reporting ombudsman at the CFPB, among other measures.
The Consumer Financial Protection Bureau headquarters in Washington, DC.
Bill Clark/CQ-Roll Call, Inc via Getty Images
But the bills were never taken up by the Senate, which at the time was run by then-Majority Leader Mitch McConnell of Kentucky.
In May 2021, attorney Chi Chi Wu of the National Consumer Law Center appeared before the House Financial Services Committee, where she floated moving away from the three-credit-bureau system and putting into place a public credit registry.
"While public agencies are far from perfect, at least they would not have profit-making as their top priority," Wu told the committee. "They would be responsive to public pressure and government oversight."
Democratic Rep. Maxine Waters of California, who chaired the panel at the time, said during the hearing that a public credit reporting agency "would be a major upgrade over today's broken, biased credit reporting system."
Consumer advocates stress that not only should credit reports be easily accessible but that Americans should be able to scrutinize the information contained in credit reports.
"The marginal costs of them sending you these reports is virtually nothing," Mierzwinski told Insider.
"You should have the right to audit information that a company is selling without your consent to make sure that it's true. That's why credit reports should always be free," he added.
Jessica Day-Weaver's daughter, Anastasia, died in January after coping with chronic-health conditions for years.
AP Photo/Nick Cammett
An anti-vax social-media campaign has targeted the family of a 6-year-old girl who died suddenly.
A photo of the child posted on the "Died Suddenly" Twitter blamed her parents for vaccinating her.
#DiedSuddenly is a recent iteration of an online conspiracy spreading disinformation about vaccines.
After the unexpected death of a young girl with long-time health issues in Ohio, online conspiracy theorists took the opportunity to blame the COVID-19 vaccine for her passing.
Just hours after the funeral of six-year-old Anastasia Weaver, who died in January, strangers online were quick to contact grieving family members to further their anti-vaccination agenda. One Facebook user messaged the child's mother, according to AP, calling her a "murderer."
Anastasia's obituary said that the kindergartener died unexpectedly at the Akron Children's Hospital in Ohio on January 25. She had previously experienced health problems, including epilepsy, asthma, and frequent hospitalizations resulting from respiratory viruses, her obituary said.
While the results of her autopsy are not yet public, doctors "haven't given us any information other than it was due to all of her chronic conditions," Jessica Day-Weaver, Anastasia's mother, told AP.
Even so, the "Died Suddenly" Twitter page — and, more widely, the anti-vaccination movement — has co-opted and exploited the death of a young girl after the account posted a photograph of Anastasia on Twitter with a syringe emoji as a kind of "warning" against COVID vaccines.
"Her mother is a nurse, and she heavily pushed the vaccine on Facebook," the post said, falsely indicating that her mother and the vaccine were in some way responsible for her death.
The "Died Suddenly" hashtag is centered around a video by the same name, which labels itself as a "documentary film of a generation."
Produced late last year by the far-right online commentator Stew Peters, the film misrepresents the stories of health crises and frames them as vaccine-related deaths. The hour-long movie claims, among other things, that COVID vaccines cause blood clots that cause unexpected deaths — an idea that health experts have repeatedly debunked as misinformation.
Anastasia and her family are only one of the latest targets of the "Died Suddenly" Twitter account, which began posting in October 2022 and has nearly 300,000 followers. Other Twitter accounts are also pushing this line and trawling for death stories.
Some of those whose lives the movie has used for anti-vaccination propaganda, as Matt Shuham reported in the HuffPost, are fighting to take their stories back.
Traffic to the #DiedSuddenly hashtag has increased by 740% on Twitter over the past two months compared to the previous two, according to an analysis conducted for the Associated Press, and searches for the term on Google spiked around the time the video was released. Rep. Marjorie Taylor Greene also tweeted in support of the video a few days after it came out.
While the film "premiered" on the site Rumble — a video-sharing site popular within the alt-right community — the entire video is also available to watch on Twitter after the site removed its COVID-misinformation label, when billionaire Elon Musk took over the platform, according to The Atlantic.
"Twitter under Elon Musk has been giving signals to the communities of conspiracy theorists that Twitter's door might be open to them again," Jing Zeng, a researcher on Twitter and conspiracy theories, told The Atlantic.
I barely had any money, but I wanted to give my husband a nice birthday surprise even if it was hard.
If I'd listened to financial advice, I never would've been willing to take the plunge.
The future is more uncertain than ever, and I'm glad I lived for the present.
It December 22, just a few hours before the clock struck midnight. It marked another trip around the sun for my husband, Francisco. I was texting with Gerardo, the front man of a seven-member mariachi group. Was his band available to play a house party in just 24 hours?
If he said yes, it would be hard to justify not booking them. But I half hoped he'd say no — my bank balance was low. I had rent and three tuition payments due in a week. Neither my landlord nor my kids' schools would want to hear I'd prioritized smartly dressed men parading into my home with trumpets, violins, and Quattrone's over them.
"Of course!" Gerardo wrote. "See you at 9 PM tomorrow!"
My husband deserved a nice surprise
Francisco grew up in Cuba, in a single parent home where there was no disposable income. His mother gave little importance to holidays and birthdays. As he tells our own children frequently, he never received presents. In fact, I learned after we started dating, he'd never had a birthday party — ever.
That was nearly 20 years ago.
After a major surgery, COVID-19, and an international move with our kids, I figured 2022 was definitely the birthday when Francisco deserved a big party.
And what could be bigger than a surprise dinner party with friends, featuring a seven-man mariachi band?
I sent Gerardo a 50% deposit along with our address. "See you soon!" I texted.
I realized I needed to ignore the financial advice
Most financial advice consists of a single, sacrosanct maxim: SAVE. Have a lot of money? Sock it away! Don't have much money at all? Try the 100 envelopes challenge! Start a change jar! Save something! Anything!
Literally no one will advise you to spend what you don't have… nor to prioritize a mariachi band over any other actual financial responsibility.
But my husband and I had just spent months talking about our financial situation (in a word, um, dynamic) and the choices we've made as a couple, as adults, and as parents. We had always traded security — or the illusion of it — for freedom and flexibility. Here we were: me at 45, him at 65. Were the stakes different now? Did we regret our choices? Friends were buying homes or bragging about their stocks or their retirement accounts. We could do neither.
No, we agreed. We didn't regret a thing.
Planning for the future is precarious
Critics might say we are trading long-term goals for short-term desires. They aren't wrong. But we have much older friends who saved their whole lives, only to arrive at retirement both unable to seize the dream they'd been saving for due to health problems, and unable to pay for treatment because healthcare in the U.S. was so expensive that it exceeded what they had been able to save.
And that was in "the before times." In a precarious world where COVID cut short the lives of people we loved, in an era when the planet is literally on fire, and in a country where capitalism is prioritized over human lives, our YOLO approach to finances may seem irresponsible to others. But to us, it makes more sense with each passing year.
As the mariachi played, I had no regrets
Just as Francisco was serving dinner, our doorbell rang and the mariachi announced their arrival with "Las mañanitas," Mexico's version of "Happy Birthday." Were those tears in Francisco's eyes? Yes. "I've never had a birthday party," Francisco told Gerardo and his fellow musicians. The revelation motivated them still more. For the next hour they serenaded our family and friends, giving it their absolute all.
Just hours before, I'd been mildly worried about my decision: Should I have contracted a band when I didn't really have the money to do so? But I took a leap and said yes, knowing — because I had plenty of experience with the YOLO approach — that I'd figure out how to hustle to cover all of our expenses.
I did. And I didn't regret it.
As I watched our friends and family double over with laughter, as I watched my husband dance around our living room with our two younger children, and as our 13-year-old texted me from her bedroom — "OMG. You really DID hire the mariachi!" — before asking me to send her video so she could send it to friends and upload it to TikTok, I realized my choice was worth every peso. Weeks later, Francisco was still talking about the party, marveling that I'd planned and pulled off such a thrilling surprise.
The YOLO financial approach isn't for everyone. It will make most people deeply uncomfortable. It not only goes against all mainstream financial advice; it pokes at deeply held assumptions about responsibility and certainty. But in 2023, it might be worth a thought. And at the very least, I can promise you this: If you hire the mariachi, you won't regret it.
Steve Bannon outside of the E. Barrett Prettyman U.S. Courthouse on June 15, 2022 in Washington, DC.
Kevin Dietsch/Getty Images
The Brookings Institution reviewed dozens of top political podcasts and how many lies they air.
Conservative hosts shared by far the most falsehoods, with Steve Bannon on top.
The top 10 podcasts sharing 60% of falsehoods were all right-leaning, the study found.
A major study reviewing the top US political podcasts found that conservative-leaning shows are vastly more likely to include misinformation — with Steve Bannon's War Room coming way out ahead.
The study released by the Brookings Institute this week reviewed more than 36,000 episodes released on Apple Podcasts up to January 2022, by 79 leading podcasters across the political spectrum. They included Bannon, Dan Bongino, Seth Myers, Ben Shapiro, and Trevor Noah.
"Conservative podcasters were 11 times more likely than liberal podcasters to share claims fact-checked as false or unsubstantiated," the study said.
Major topics of misinformation were the 2020 election and the Covid-19 pandemic.
Fifty-six of the podcasters reviewed shared false or unsubstantiated claims at some point, the study found. But 10 of those were responsible for a full 60 per cent of the misleading material found. And of those, all were conservative-leaning, the study said.
Right behind Bannon's "War Room" was "The Charlie Kirk Show," "The Rush Limbaugh Show," and "The Clay Travis and Buck Sexton Show," all of which shared falsehoods in at least 15 per cent of their episodes, the study said.
The authors worked by comparing transcripts against a list of common fact-checks and keywords. The study noted it had taken the potential for liberal bias in the referenced fact-checks into account.
In total, more than 70% of the podcasts reviewed shared false claims at some point, including those described as "liberal," "moderate," or "unknown." But repeat offenders — podcasts that did this over the course of anything between five and 200 episodes — leaned overwhelmingly to the right.
While conservatives were more willing in general to challenge a false claim, conservative hosts were far more likely to challenge a false claim — almost half the time — if it came from a liberal guest than a fellow conservative — where more than 90% of false claims went unchallenged, the study found.
Ben Shapiro stood out as the host most likely to challenge any false claim, whether it came from his ideological peers or not, it said.
The study noted that it included far more conservative podcasts in its sample as a result of choosing those that are most popular on Apple Podcasts.
The sheer rate of production adds to the issue, it said, with conservative podcasters making longer and more frequent episodes.
While the strongly left-leaning "Pod Save America" puts out its roughly hour-long show about twice a week, Steve Bannon's "War Room" goes out as many as four times a day.
When Jonathan, 30, moved back in with his parents in 2020, they decided to take things a step further and own a home (pictured) together.
Jonathan C.
In May 2020, my parents and I decided to purchase an empty lot and build a home for the three of us.
As a Mexican-American, living with my parents as an adult is more culturally acceptable.
There were some arguments and tough conversations along the way, but it all worked out.
This as-told-to essay is based on a conversation with Jonathan C., a 30-year-old elementary school teacher based in San Diego, Calif.According to Zillow, the average value of a San Diego home in May 2020 was about $650,000. It has been edited for length and clarity.
I've lived with my parents on and off for the past 10 years, so in 2020, we decided to make a more permanent joint investment in our living situation.
After I'd moved back to their home in Southern California at the beginning of the COVID-19 pandemic, the three of us decided to look for a property I call "faux rural." We wanted something outside of San Diego but still a short drive away from the city.
The decision to build a house came when an opportunity presented itself in the form of an empty lot being sold by a divorced couple for a big discount. We took the project on in May 2020, and now the house is complete. We love it.
We wanted an escape
There was a lot of pressure at the onset of the pandemic to find an escape from everything. It was a fear-based decision in the moment, but it's paid off for different reasons now. My parents covered 60% of the building costs while I was responsible for the remaining 40%.
We're a middle-class family, so we built a standard two-story, five-bedroom Southern California home, situated about 20 miles outside of San Diego, for between $250,000 and $600,000.
My dad is a construction worker, so we saved a lot of money on the whole project by not having to hire a contractor. His connections allowed us to find good deals on plumbing, electricity, and more.
It became my job without a job
Like a lot of people, I lost my job in the early months of the pandemic, so I was relying a lot on my savings from the eight years prior. However, the lack of employment allowed me to be really involved in the building process for the year and a half I was without work.
My mom and I spent 10-hour shifts overseeing the building process at the lot. The beginning was the hardest because you're just there in a barren lot standing by to answer any questions the builders may have.
There were many hard arguments between my parents and I since we're all financially locked into this house. The build caused a lot of tension because there were so many little issues that would arise. But since the completion, we've gotten along just fine.
Use your resources
Living with my parents as a full-grown adult has been kind of nice. Now that I'm older and not going out most weekends, they've become two of my closest friends, and I'm really glad I can say that.
In the US, there's this idea of getting out at 18 or having to pay rent to your parents, and I find it so bizarre that a parent would do that to their child. As a Mexican-American, growing up I was told to go to school and get a good job, then start helping out the family.
As the youngest of their five children, and a gay man with no kids, it feels like a blessing that we could help each other achieve this big accomplishment. Now this will be the house that I grow old in.
David Rosenberg answered seven key questions about markets and the economy in an Insider interview.
He shrugged off inflation, called a recession, and predicted stocks and house prices will plunge.
The veteran economist sees the Fed cutting rates later this year, and offered portfolio advice.
David Rosenberg answered seven burning questions about markets and the economy in an interview with Insider this week.
The Rosenberg Research president and former chief North American economist at Merrill Lynch said the inflation threat has faded, and a recession is underway. He also predicted stocks and house prices would tumble, and the Federal Reserve would begin cutting interest rates later this year.
Moreover Rosenberg suggested some solid bets for investors in the months ahead, and dismissed crypto as too volatile and tough to value.
Here are our 7 questions and Rosenberg's answers to them:
1. Why did inflation spike, and should we still be worried about it?
Inflation surged to a 40-year high of 9.1% last June, and was still over 6% in December — well above the Fed's 2% target. Rosenberg blamed surging prices on "excessive fiscal and monetary stimulus that took hold against a recurring set of global supply shocks."
In other words, the Fed's near-zero interest rates and epic bond-buying spree during the COVID-19 pandemic, combined with the US Treasury dispatching stimulus checks and bailing out companies, stoked historic demand. Meanwhile, the virus' disruption of international supply chains, coupled with Russia's invasion of Ukraine roiling food and fuel production, choked supply.
However, Rosenberg argued the upward pressure on prices has now faded. Many government-aid programs have ended, while the Fed has hiked rates from virtually zero to nearly 5% over the past year and started to shrink its balance sheet.
"All the inflation is in the rear-view mirror," he said, dismissing official government measures as imperfect and lagging reality.
2. Is there a recession coming?
"Let's face facts, the economy is flat on its back," Rosenberg said, arguing official GDP readings are flattering and don't reflect the underlying health of the country.
The veteran economist noted that changes to monetary policy act with a lag of 6-to-18 months, meaning most of the Fed's rate hikes haven't taken full effect yet. He also pointed to the US money supply shrinking for the first time in decades last year, and banks tightening their lending requirements, which usually only happens in recessions.
Moreover, he highlighted the US central bank's stated expectation that unemployment will rise to 4.6% — a scale of increase that has historically only occurred during prolonged downturns.
"The Fed is giving us a recession call on a silver platter," he said. "There is no get-out-of-jail-free card," he continued, meaning the Fed can't tighten economic conditions so aggressively without causing serious fallout.
3. Why did stocks surge during the pandemic, and where are they going from here?
"When the central banks take the risk-free rate to zero, your discounted cash flows end up looking like 'Jack and the Beanstalk'," Rosenberg said about the stock market's boom in 2020. He meant that when interest rates are cut to nothing, the relative appeal of stocks increases as safer options such as savings accounts and bonds offer virtually no returns to investors.
Rosenberg also discussed the idea of the "Fed put," or investors' belief that their downside is limited as the central bank will eventually step in to save the day.
"The Fed gave investors the comfort level that it was going to be the lender of last resort, first resort and everything in between," he said.
Stocks fell sharply in 2022, but have jumped so far this year. Rosenberg described the rebound as a "very whippy and junky, short-covering, bear-market rally," and warned investors face a "meat grinder" of a year.
"There's not a snowball's chance in hell that we've hit the bottom of this market," he said, arguing stocks are still far too expensive relative to other assets.
He suggested the S&P 500 could drop from about 4,100 points today to as low as 3,000 points — a 27% decline — if the Fed insists on hitting 2% inflation.
Rosenberg noted the stock market has historically bottomed 70% of the way through a recession, and 70% of the way through the Fed's easing cycle. As the recession is only just starting in his view, and the central bank is currently tightening, stocks could have much further to fall.
"If 2022 was about multiple contraction from nosebleed levels, 2023 is when interest rates percolate through the economy and into corporate earnings," he said.
He was referring to higher rates dampening spending, investing, and hiring, plus making it costlier for businesses to service their debts. Those impacts typically weigh on company profits and drag down stocks, especially in a recession.
4. When will the Fed stop raising rates and start lowering them?
"There's a good chance they'll be done in March, although we could see a hike in May," Rosenberg said. "I think they'll be cutting rates in the second half of the year."
He suggested that by the third quarter, the job market may have cooled sufficiently and inflation might be below 2%, freeing the Fed to begin reducing rates.
5. What's the outlook for house prices?
"The price bubble heading into this bear market was bigger than it was in the mid-2000s," Rosenberg said. "The higher they are, the harder they fall."
He noted there's less leverage in the housing market today than during the last big bubble, drastically lowering the risk of another financial crisis. Yet he still sees house prices plunging 15% to 20% from current levels, or as much as 25% from their peak last year.
6. What should investors have in their portfolios?
"The Fed is paying you to be in cash," Rosenberg said, noting investors will appreciate liquidity when asset prices drop into bargain territory.
He touted long-dated bonds, which typically rally during recessions. He also pointed to gold, which could benefit from the US dollar weakening once the Fed starts cutting rates.
At the same time, he talked up stocks that should be more resilient to a recession — in areas such as healthcare, utilities, consumer staples — as well as defense and technology stocks with solid long-term growth prospects.
7. Should investors bet on crypto?
"It's way too volatile for me," Rosenberg said regarding crypto. "It's fun to trade, but something that can be up or down 20% or 30% in a matter of weeks — why introduce that to your portfolio unless you're a gambler?"
Rosenberg also emphasized the difficulty of determining the worth of something that doesn't generate cash or yield a return to investors.
"I don't know how to value it," he said. "Therefore, as they say on "Shark Tank" — 'I'm out.'"
Walmart is shuttering its standalone pickup and delivery stores.
Walmart
Walmart opened up its first pickup-and-delivery-only store in its headquarters city of Bentonville, Arkansas, in 2014.
The retailer appears to be abandoning the model by closing the concept's last 2 remaining stores.
The move comes as Walmart's e-commerce growth has greatly slowed since the height of the pandemic.
Long before the onset of the COVID-19 pandemic, Walmart was working to boost its pickup and delivery options and encourage more customers to shop online.
The retail giant opened a pickup-and-delivery-only prototype grocery store in its headquarters city of Bentonville, Arkansas, in September 2014, allowing customers to order food without ever having to get out of their car. In fact, customers could not travel into the store.
But less than nine years after this launch, Walmart appears to be abandoning the concept as it closes the only two remaining standalone Walmart pickup and delivery stores in the country. Walmart spokeswoman Felicia McCranie confirmed to Insider that the company will be closing the pickup and delivery only stores in Bentonville and Lincolnwood, Illinois, on February 17.
"We are grateful to the customers who have given us the privilege of serving them at our Pickup and Delivery locations," McCranie said in an email. "We look forward to serving them at our other stores in the surrounding communities and on walmart.com."
Walmart still offers pickup and delivery from many of its supercenters and locations nationwide.
At one point, at least three of these models existed in the United States. In addition to the locations in Lincolnwood and Bentonville, a Walmart pickup and delivery only store opened in Metairie, Louisiana, in 2017 and closed last year. The Lincolnwood location opened in 2019.
The Bentonville location took up 15,000 square feet of space for produce, meats and frozen foods and other consumables, according to the Democrat-Gazette in 2014, and could serve 19 cars at a time. Meanwhile, the Lincolnwood location was much larger, occupying roughly 42,000 square feet, per the Chicago Tribune in 2019.
Walmart's decision to close these stores, where customers placed orders on walmart.com or the Walmart app, comes as the company has seen ecommerce growth slow greatly.
Walmart has been attempting to recapture the magic it had from the early days of the coronavirus pandemic, when the world hunkered down and primarily turned to online shopping. In the second quarter of 2020, Walmart US ecommerce sales increased 97% compared with the year prior.
Check out these pitch decks to see how fintech founders are selling their vision and nabbing big bucks in the process. You'll see new financial tech geared at freelancers, fresh twists on digital banking, and innovation aimed at streamlining customer onboarding.
The fintech "fixing wealth management"
CEO Michael Simon lured Roni Israelov, former principal at the hedge fund, AQR Capital Management, to head up his portfolio management and research team.
NDVR
Michael Simon launched NDVR in January on the premise that he wanted to build a new kind of investment firm for high-net-worth investors. One that would, according to him, "fix wealth management."
Simon had been a client of major banks like Goldman Sachs, Morgan Stanley, UBS, and even a robo-advisor. But he felt there wasn't an investment strategy that fit his family planning needs because many of the solutions seemed like one-size-fits-all offerings. So he developed a portfolio management app that customizes portfolios and investment strategies to the needs of wealthy investors.
NDVR has attracted big names in the venture capital space as its backers. Karen Pritzker, one of the heirs to the Hyatt fortune, invested through her VC firm, Launch Capital. Polaris Partners led the company's $19 million Series A and Simon and Polaris led NDVR's $20 million Series B which closed in July.
From left: SecureSave cofounders Devin Miller, Suze Orman, and Bassam Saliba.
SecureSave
The origins of SecureSave — a Kirkland, Washington-based fintech that works with companies to offer emergency savings accounts, or ESAs, to employees — began with a single email to a Seattle-based venture studio and investor.
Cofounders Devin Miller and Bassam Saliba each spent years working in financial technology at companies like TaxAct and Equiom. But as the pandemic upended the American economy, they realized their idea to incentivize employee saving was more salient than ever.
Miller sent a note to Pioneer Square Labs in Seattle asking if they were still backstopping new companies, even in the midst of what seemed like "the end of the world," he told Insider. The venture studio was interested, introduced Miller and Saliba to who would become their third cofounder — the personal-finance expert and author Suze Orman — and SecureSave officially launched in September 2020.
Miller said SecureSave's business is rooted in a fundamental premise: Too few Americans have enough money saved for emergencies. A June Bankrate survey revealed that more than half of adults nationwide are uncomfortable with their level of emergency savings — and that only one in four have more saved for emergencies than they did a year ago.
In some ways, emergency savings accounts resemble health savings accounts, through which workers can set aside pre-tax earnings to save for medical care. Those with an employer-sponsored ESA set up regular deductions from their paychecks into a dedicated account for emergency funds, up to certain limits. But the money is deducted after taxes, so funds can be tapped at any time without penalty (unlike retirement accounts) and can be matched by employers.
Employers "are looking for kind of that silver bullet, something that's easy, that has good impact, is very measurable, and is not too hard to do. It really resonates with employees, and solves very clear problems around loans and financial wellness," Miller said.
Consumers are getting used to the idea of branch-less banking, a trend that startup digital-only banks like Chime, N26, and Varo have benefited from.
The majority of these fintechs target those who are underbanked, and rely on usage of their debit cards to make money off interchange. But fellow startup HMBradley has a different business model.
"Our thesis going in was that we don't swipe our debit cards all that often, and we don't think the customer base that we're focusing on does either," Zach Bruhnke, cofounder and CEO of HMBradley, told Insider. "A lot of our customer base uses credit cards on a daily basis."
Instead, the startup is aiming to build clientele with stable deposits. As a result, the bank is offering interest-rate tiers depending on how much a customer saves of their direct deposit.
Notably, the rate tiers are dependent on the percentage of savings, not the net amount.
"We'll pay you more when you save more of what comes in," Bruhnke said. "We didn't want to segment customers by how much money they had. So it was always going to be about a percentage of income. That was really important to us."
Yinon Ravid, the chief executive and cofounder of Albert.
Albert
The COVID-19 pandemic has underscored the growing preference of mobile banking as customers get comfortable managing their finances online.
The financial app Albert has seen a similar jump in activity. Currently counting more than six million members, deposits in Albert's savings offering doubled from the start of the pandemic in March 2020 to May of this year, from $350 million to $700 million, according to new numbers released by the company.
Founded in 2015, Albert offers automated budgeting and savings tools alongside guided investment portfolios. It's looked to differentiate itself through personalized features, like the ability for customers to text human financial experts.
Budgeting and saving features are free on Albert. But for more tailored financial advice, customers pay a subscription fee that's a pay-what-you-can model, between $4 and $14 a month.
And Albert's now banking on a new tool to bring together its investing, savings, and budgeting tools.
Jessica Chen Riolfi kept hearing the same concern from users during her time at financial-technology companies focused on personal finance: "I don't know what I'm doing."
Whether they were weighing what stocks to pick on Robinhood or attempting to break out of living paycheck to paycheck using Earnin, an earned-wage access startup, Chen Riolfi found users often struggled to understand how best to save, spend, and invest.
In her latest role, Chen Riolfi hopes to finally help users overcome their doubts and confusion as the cofounder and CEO of Uprise, a free financial-coaching app that aims to bring an offering typically limited to high net-worth individuals to a wider audience.
"What we're building at Uprise is really seeing ourselves as democratizing access to private family offices," Chen Riolfi told Insider. "There's somebody out there keeping an eye out and optimizing your finances. Helping people sleep better at night — that's really the feeling that we're trying to impart."
Priyank Singh and Rohit Mittal are the cofounders of Stilt.
Stilt
Rohit Mittal remembers the difficulties he faced when he first arrived in the United States a decade ago as a master's student at Columbia University.
As an immigrant from India, Mittal had no credit score in the US and had difficulty integrating into the financial system. Mittal even struggled to get approved to rent an apartment and couch-surfed until he found a roommate willing to offer him space in his apartment in the New York neighborhood Morningside Heights.
That roommate was Priyank Singh, who would go on to become Mittal's cofounder when the two started Stilt, a financial-technology company designed to address the problems Mittal faced when he arrived in the US.
Stilt, which calls itself "a bank for immigrants," does not require a social security number or credit history to access its offerings, including unsecured personal loans.
Instead of relying on traditional metrics like a credit score, Stilt uses data such as education and employment to predict an individual's future income stability and cash flow before issuing a loan. Stilt has seen its loan volume grow by 500% in the past 12 months, and the startup has loaned to immigrants from 160 countries since its launch.
Henry Yoshida is the co-founder and CEO of retirement fintech startup Rocket Dollar.
Rocket Dollar
Fintech startup Rocket Dollar, which helps users invest their individual retirement account (IRA) dollars into alternative assets, just raised $8 million for its Series A round, the company announced on Thursday.
Park West Asset Management led the round, with participation from investors including Hyphen Capital, which focuses on backing Asian American entrepreneurs, and crypto exchange Kraken's venture arm.
Co-founded in 2018 by CEO Henry Yoshida, CTO Rick Dude, and VP of marketing Thomas Young, Rocket Dollar now has over $350 million in assets under management on its platform. Yoshida sold his first startup, a roboadvisor called Honest Dollar, to Goldman Sachs' investment management division for an estimated $20 million.
Yoshida told Insider that while ultra-high net worth investors have been investing self-directed retirement account dollars into alternative assets like real estate, private equity, and cryptocurrency, average investors have not historically been able to access the same opportunities to invest IRA dollars in alternative assets through traditional platforms.
This fintech wants to make investing in wines and spirits accessible to everyone by creating a new asset class.
The market for investing in wines and spirits is "highly inefficient" and "largely inaccessible," Vint CEO and cofounder Nick King told Insider. But wines and spirits have a strong history of good returns and tend to hold their value despite what's happening in the wider financial markets.
That's why King and his cofounder and CTO, Patrick Sanders, launched Vint in June 2019 as a marketplace to enable both accredited and non-accredited investors to buy shares in collections of fine wines and spirits.
"What we're trying to do is to create a financial asset class. We're not a wine company, we're a fintech company, and that is the mission," said King. "You should look at wine and spirits just like you look at stocks, bonds, and real estate when it comes to constructing a portfolio."
An up-and-coming fintech is taking aim at some of the world's largest corporations by empowering retail investors to push for social and environmental change by pooling their shareholder rights.
London-based Tulipshare lets individuals in the UK invest as little as one pound in publicly-traded company stocks. The upstart combines individuals' shareholder rights with other like-minded investors to advocate for environmental, social, and corporate governance change at firms like JPMorgan, Apple, and Amazon.
The goal is to achieve a higher number of shares to maximize the number of votes that can be submitted at shareholder meetings. Already a regulated broker-dealer in the UK, Tulipshare recently applied for registration as a broker-dealer in the US.
"If you ask your friends and family if they've ever voted on shareholder resolutions, the answer will probably be close to zero," CEO and founder Antoine Argouges told Insider. "I started Tulipshare to utilize shareholder rights to bring about positive corporate change that has an impact on people's lives and our planet — what's more powerful than money to change the system we live in?"
Jason Wenk started his career at Morgan Stanley in investment research over 20 years ago. Now, he's running a company that is hoping to broaden access to financial advice for less-wealthy individuals.
The startup raised $50 million in Series B funding led by Insight Partners with participation from investors Vanguard and Venrock. The round brings the Los Angeles-based startup's total funding to just under $67 million.
Founded in 2018, Altruist is a digital brokerage built for independent financial advisors, intended to be an "all-in-one" platform that unites custodial functions, portfolio accounting, and a client-facing portal. It allows advisors to open accounts, invest, build models, report, trade (including fractional shares), and bill clients through an interface that can advisors time by eliminating mundane operational tasks.
Altruist aims to make personalized financial advice less expensive, more efficient, and more inclusive through the platform, which is designed for registered investment advisors (RIAs), a growing segment of the wealth management industry.
For lenders, debt collection is largely automated. But for people who owe money on their credit cards, it can be a confusing and stressful process.
Relief is looking to change that. Its app automates the credit-card debt collection process for users, negotiating with lenders and collectors to settle outstanding balances on their behalf. The fintech just launched and closed a $2 million seed round led by Collaborative Ventures.
Relief's fundraising experience was a bit different to most. Its pitch deck, which it shared with one investor via Google Slides, went viral. It set out to raise a $1 million seed round, but ended up doubling that and giving some investors money back to make room for others.
A new software layer for non-profit small business lenders
Miren CEO and Founder Gabriela Campoverde
Janick Gilpin
Gabriela Campoverde could already count years of experience working at two of the nation's largest financial firms, American Express and Goldman Sachs, when she headed to business school at the University of Pennsylvania in 2020.
But rather than use her time at Wharton to score another job with a big financial firm, she shifted her focus to study the business needs of South Philadelphia's Mexican community. Campoverde walked door to door, speaking to the owners of small businesses like South Philly Barbacoa, one of the city's most buzzed-about restaurants, and learned about the gaps in access to capital that exist for Latina and Latino entrepreneurs.
Miren hasn't raised any equity investments to date — for one, Campoverde said, many venture investors don't have relationships with CDFI lenders — but the young startup has raised more than $46,000 in grants, including a $10,000 fellowship through Google for Startups' partnership with the venture firm Visible Hands, announced this August.
Also this August, Campoverde was named as a finalist for the David Prize, a $200,000 philanthropic award granted annually to five New Yorkers (Campoverde is originally from Queens).
For large corporations with a track record of tapping the credit markets, taking out debt is a well-structured and clear process handled by the nation's biggest investment banks and teams of accountants.
But smaller, middle-market companies — typically those with annual revenues ranging up to $1 billion — are typically served by regional and community banks that don't always have the capacity to adequately measure the risk of loans or price them competitively. Per the National Center for the Middle Market, 200,000 companies fall into this range, accounting for roughly 33% of US private sector GDP and employment.
Dallas-based fintech CollateralEdge works with these banks — typically those with between $1 billion and $50 billion in assets — to help analyze and price slices of commercial and industrial loans that previously might have gone unserved by smaller lenders.
On October 20th, CollateralEdge announced a $3.5 million seed round led by Dallas venture fund Perot Jain with participation from Kneeland Youngblood (a founder of the healthcare-focused private-equity firm Pharos Capital) and other individual investors.
Pinwheel founders Curtis Lee, Kurt Lin, and Anish Basu.
Pinwheel
Growing up, Kurt Lin never saw his father get frustrated.
A "traditional, stoic figure," Lin said his father immigrated to the United States in the 1970s. Becoming part of the financial system proved even more difficult than assimilating into a new culture.
Lin recalled visiting bank after bank with his father as a child, watching as his father's applications for a mortgage were denied due to his lack of credit history.
"That was the first time in my life I really saw him crack," Lin told Insider. "The system doesn't work for a lot of people — including my dad," he added.
Lin would find a solution to his father's problem years later while working with Anish Basu, and Curtis Lee on an automated health savings account. The trio realized the payroll data integrations they were working on could be the basis of a product that would help lenders work with consumers without strong credit histories.
"That's when the lightbulb hit," said Lin, Pinwheel's CEO.
In 2018, Lin, Basu, and Lee founded Pinwheel, an application-programming interface that shares payroll data to help both fintechs and traditional lenders serve consumers with limited or poor credit, who have historically struggled to access financial products.
An alternative auto lender that caters to thin- and no-credit Hispanic borrowers is planning a national expansion after scoring a $90 million investment from BlackRock-managed funds.
Tricolor is a Dallas-based auto lender that is a community development financial institution. It uses a proprietary artificial-intelligence engine that decisions each customer based on more than 100 data points, such as proof of income.
Half of Tricolor's customers have a FICO score, and less than 12% have scores above 650, yet the average customer has lived in the US for 15 years, according to the deck.
A 2017 survey by the Federal Deposit Insurance Corporation found 31.5% of Hispanic households had no mainstream credit compared to 14.4% of white households.
"For decades, the deck has been stacked against low income or credit invisible Hispanics in the United States when it comes to the purchase and financing of a used vehicle," Daniel Chu, founder and CEO of Tricolor, said in a statement announcing the raise.
Kristy Kim knows first-hand the challenge of obtaining credit in the US without an established credit history.
Kim, who came to the US from South Korea, couldn't initially get access to credit despite having a job in investment banking after graduating college.
"I was in my early twenties, I had a good income, my job was in investment banking but I could not get approved for anything," Kim told Insider. "Many young professionals like me, we deserve an opportunity to be considered but just because we didn't have a Fico, we weren't given a chance to even apply," she added.
Kim started TomoCredit in 2018 to help others like herself gain access to consumer credit. TomoCredit spent three years building an internal algorithm to underwrite customers based on cash flow, rather than a credit score.
Method Financial cofounders Jose Bethancourt and Marco del Carmen.
Method Financial
When Jose Bethancourt graduated from the University of Texas at Austin in May 2019, he faced the same question that confronts over 43 million Americans: How would he repay his student loans?
The problem led Bethancourt on a nearly two-year journey that culminated in the creation of a startup aimed at making it easier for consumers to more seamlessly pay off all kinds of debt.
Initially, Bethancourt and fellow UT grad Marco del Carmen built GradJoy, an app that helped users better understand how to manage student loan repayment and other financial habits.
GradJoy was accepted into Y Combinator in the summer of 2019. But the duo quickly realized the real benefit to users would be helping them move money to make payments instead of simply offering recommendations.
"When we started GradJoy, we thought, 'Oh, we'll just give advice — we don't think people are comfortable with us touching their student loans,' and then we realized that people were saying, 'Hey, just move the money — if you think I should pay extra, then I'll pay extra.' So that's kind of the movement that we've seen, just, everybody's more comfortable with fintechs doing what's best for them," Bethancourt told Insider.
Even though banks and hedge funds are still several years out from adding quantum computing to their tech arsenals, that hasn't stopped Wall Street giants from investing time and money into the emerging technology class.
And momentum for QC Ware, a startup looking to cut the time and resources it takes to use quantum computing, is accelerating. The fintech secured a $25 million Series B on September 29 co-led by Koch Disruptive Technologies and Covestro with participation from D.E. Shaw, Citi, and Samsung Ventures.
QC Ware, founded in 2014, builds quantum algorithms for the likes of Goldman Sachs (which led the fintech's Series A), Airbus, and BMW Group. The algorithms, which are effectively code bases that include quantum processing elements, can run on any of the four main public-cloud providers.
Quantum computing allows companies to do complex calculations faster than traditional computers by using a form of physics that runs on quantum bits as opposed to the traditional 1s and 0s that computers use. This is especially helpful in banking for risk analytics or algorithmic trading, where executing calculations milliseconds faster than the competition can give firms a leg up.
Eric Chang and Alex Schumacher, co-founders of Claira
Claira
It was a match made in heaven — at least the Wall Street type.
Joseph Squeri, a former CIO at Citadel and Barclays, had always struggled with the digitization of financial documents. When he was tapped by Brady Dougan, the former chief executive of Credit Suisse, to build out an all-digital investment bank in Exos, Squeri spent the first year getting let down by more than a dozen tools that lacked a depth in financial legal documents.
His solution came in the form of Alex Schumacher and Eric Chang who had the tech and financial expertise, respectively, to build the tool he needed.
Schumacher is an expert in natural-language processing and natural-language understanding, having specialized in turning unstructured text into useful business information.
Chang spent a decade as a trader and investment strategist at Goldman Sachs, BlackRock, and AQR. He developed a familiarity with the kinds of financial documents Squeri wanted to digitize, such as the terms and conditions information from SEC filings and publicly traded securities and transactions, like municipal bonds and collateralized loan obligations (CLOs).
The three converged at Exos, Squeri as its COO and CTO, Schumacher as the lead data scientist, and Chang as head of tech and strategy.
Kirat Singh and Mark Higgins, Beacon's cofounders.
Beacon
A fintech that helps financial institutions use quantitative models to streamline their businesses and improve risk management is catching the attention, and capital, of some of the country's biggest investment managers.
Beacon Platform, founded in 2014, is a fintech that builds applications and tools to help banks, asset managers, and trading firms quickly integrate quantitative models that can help with analyzing risk, ensuring compliance, and improving operational efficiency. The company raised its Series C on Wednesday, scoring a $56 million investment led by Warburg Pincus with support from Blackstone Innovations Investments, PIMCO, and Global Atlantic.
Blackstone, PIMCO, and Global Atlantic are also users of Beacon's tech, as are the Commonwealth Bank of Australia and Shell New Energies, a division of Royal Dutch Shell, among others.
The fintech provides a shortcut for firms looking to use quantitative modelling and data science across various aspects of their businesses, a process that can often take considerable resources if done solo.
From left to right: Cofounders CTO David Movshovitz, CEO Doron Hendler, and chief architect Adi DeGani
RevealSecurity
An encounter with an impersonation hacker led Doron Hendler to found RevealSecurity, a Tel Aviv-based cybersecurity startup that monitors for insider threats.
Two years ago, a woman impersonating an insurance-agency representative called Hendler and convinced him that he made a mistake with his recent health insurance policy upgrade. She got him to share his login information for his insurer's website, even getting him to give the one-time passcode sent to his phone.
Once the hacker got what she needed, she disconnected the call, prompting Hendler to call back. When no one picked up the phone, he realized he had been conned.
He immediately called his insurance company to check on his account. Nothing seemed out of place to the representative. But Hendler, who was previously a vice president of a software company, suspected something intangible could have been collected, so he reset his credentials.
"The chief of information security, who was on the call, he asked me, 'So, how do you want me to identify you? You gave your credentials; you gave your ID; you gave the one time password. How the hell can I identify that it's not you?' And I told him, 'But I never behave like this,'" Hendler recalled of the conversation.
For years, the only way investors could figure out the going price of a corporate bond was calling up a dealer on the phone. The rise of electronic trading has streamlined that process, but data can still be hard to come by sometimes.
A startup founded by a former Goldman Sachs exec has big plans to change that.
BondCliQ is a fintech that provides a data feed of pre-trade pricing quotes for the corporate bond market. Founded by Chris White, the creator of Goldman Sachs' defunct corporate-bond-trading system, BondCliQ strives to bring transparency to a market that has traditionally kept such data close to the vest.
Banks, which typically serve as the dealers of corporate bonds, have historically kept pre-trade quotes hidden from other dealers to maintain a competitive advantage.
But tech advancements and the rise of electronic marketplaces have shifted power dynamics into the hands of buy-side firms, like hedge funds and asset managers. The investors are now able to get a fuller picture of the market by aggregating price quotes directly from dealers or via vendors.
Onboarding new customers with ease is key for any financial institution or retailer. The more friction you add, the more likely consumers are to abandon the entire process.
But preventing fraud is also a priority, and that's where Neuro-ID comes in. The startup analyzes what it calls "digital body language," or, the way users scroll, type, and tap. Using that data, Neuro-ID can identify fraudulent users before they create an account. It's built for banks, lenders, insurers, and e-commerce players.
"The train has left the station for digital transformation, but there's a massive opportunity to try to replicate all those communications that we used to have when we did business in-person, all those tells that we would get verbally and non-verbally on whether or not someone was trustworthy," Neuro-ID CEO Jack Alton told Insider.
Founded in 2014, the startup's pitch is twofold: Neuro-ID can save companies money by identifying fraud early, and help increase user conversion by making the onboarding process more seamless.
In December Neuro-ID closed a $7 million Series A, co-led by Fin VC and TTV Capital, with participation from Canapi Ventures. With 30 employees, Neuro-ID is using the fresh funding to grow its team and create additional tools to be more self-serving for customers.
Marketplaces like Amazon and eBay host millions of third-party sellers, and their algorithms will often boost items in search based on consumer sentiment, which is largely based on reviews. But many third-party sellers use fake reviews often bought from click farms to boost their items, some of which are counterfeit or misrepresented to consumers.
That's where Fakespot comes in. With its Chrome extension, it warns users of sellers using potentially fake reviews to boost sales and can identify fraudulent sellers. Fakespot is currently compatible with Amazon, BestBuy, eBay, Sephora, Steam, and Walmart.
"There are promotional reviews written by humans and bot-generated reviews written by robots or review farms," Fakespot founder and CEO Saoud Khalifah told Insider. "Our AI system has been built to detect both categories with very high accuracy."
Fakespot's AI learns via reviews data available on marketplace websites, and uses natural-language processing to identify if reviews are genuine. Fakespot also looks at things like whether the number of positive reviews are plausible given how long a seller has been active.
Proper Finance co-founders Travis Gibson (left) and Kyle Maloney
Proper Finance
As the flow of data becomes evermore crucial for fintechs, from the strappy startup to the established powerhouse, a thorny issue in the back office is becoming increasingly complex.
Even though fintechs are known for their sleek front ends, the back end is often quite the opposite. Behind that streamlined interface can be a mosaic of different partner integrations — be it with banks, payments players and networks, or software vendors — with a channel of data running between them.
Two people who know that better than the average are Kyle Maloney and Travis Gibson, two former employees of Marqeta, a fintech that provides other fintechs with payments processing and card issuance.
"Take an established neobank for example. They'll likely have one or two card issuers, two to three bank partners, ACH processing for direct deposits and payouts, mobile check deposits, peer-to-peer payments, and lending," Gibson told Insider.
Michael Rangel, cofounder and CEO, and Tyler McIntyre, cofounder and CTO of Novo.
Kristelle Boulos Photography
Business banking is a hot market in fintech. And it seems investors can't get enough.
Novo, the digital banking fintech aimed at small e-commerce businesses, raised a $40.7 million Series A led by Valar Ventures in June. Since its launch in 2018, Novo has signed up 100,000 small businesses. Beyond bank accounts, it offers expense management, a corporate card, and integrates with e-commerce infrastructure players like Shopify, Stripe, and Wise.
Founded in 2018, Novo was based in New York City, but has since moved its headquarters to Miami.
Productfy is looking to break into embedded finance by becoming the Shopify of back-end banking services.
Embedded finance — integrating banking services in non-financial settings — has taken hold in the e-commerce world. But Productfy is going after a different kind of customer in churches, universities, and nonprofits.
The San Jose, Calif.-based upstart aims to help non-finance companies offer their own banking products. Productfy can help customers launch finance features in as little as a week and without additional engineering resources or background knowledge of banking compliance or legal requirements, Productfy founder and CEO Duy Vo told Insider.
"You don't need an engineer to stand up Shopify, right? You can be someone who's just creating art and you can use Shopify to build your own online store," Vo said, adding that Productfy is looking to take that user experience and replicate it for banking services.
Deploying algorithms and automation to small-business financing
Justin Straight and Bernard Worthy, LoanWell co-founders
LoanWell
Bernard Worthy and Justin Straight, the founders of LoanWell, want to break down barriers to financing for small and medium-size businesses — and they've got algorithms and automation in their tech arsenals that they hope will do it.
Worthy, the company's CEO, and Straight, its chief operating and financial officer, are powering community-focused lenders to fill a gap in the SMB financing world by boosting access to loans under $100,000. And the upstart is known for catching the attention, and dollars, of mission-driven investors. LoanWell closed a $3 million seed financing round in December led by Impact America Fund with participation from SoftBank's SB Opportunity Fund and Collab Capital.
LoanWell automates the financing process — from underwriting and origination, to money movement and servicing — which shaves down an up-to-90-day process to 30 days or even same-day with some LoanWell lenders, Worthy said.
SMBs rely on these loans to process quickly after two years of financial uncertainty. But the pandemic illustrated how time-consuming and expensive SMB financing can be, highlighted by efforts like the federal government's Paycheck Protection Program.
Community banks, once the lifeline to capital for many local businesses, continue to shutter. And demands for smaller loan amounts remain largely unmet. More than half of business-loan applicants sought $100,000 or less, according to 2018 data from the Federal Reserve. But the average small-business bank loan was closer to six times that amount, according to the latest data from a now discontinued Federal Reserve survey.
Parafin cofounders Vineet Goel, Sahill Poddar, and Ralph Furman
Parafin
A trio of former Robinhood employees are trying to help small businesses access capital via the marketplaces they work with.
Parafin, launched in 2020, works with so-called platform partners, or companies that other small businesses sell their products through. Some of Parafin's customers include DoorDash and Mindbody, a software provider to tens of thousands of fitness, health, and wellness businesses.
The fintech enables platform partners to offer capital to the small businesses they work with. Parafin's tech offering spans product, marketing, compliance, and IT support for partners to embed capital products. The startup also provides the capital, sourced via debt capital providers, and manages underwriting and risk.
"When we left Robinhood, I don't think we knew we'd be starting Parafin as it is now," Sahill Poddar, CEO of Parafin, told Insider. All the cofounders knew was that they wanted to build technology that would help small businesses. "It was in our conversations with business owners themselves — we did a lot of them in the early days to find our way — that the problem of lack of access to capital became clear," he said.
Jennifer Glaspie-Lundstrom is the cofounder and CEO of Tandym.
Tandym
Jennifer Glaspie-Lundstrom is no stranger to the private-label credit-card business. As a former Capital One exec, she worked in both the card giant's co-brand partnerships division and its tech organization during her seven years at the company.
Now, Glaspie-Lundstrom is hoping to use that experience to innovate a sector that was initially created in malls decades ago.
Glaspie-Lundstrom is the cofounder and CEO of Tandym, which offers private-label digital credit cards to merchants.
Store and private-label credit cards aren't a new concept, but Tandym is targeting small- and medium-sized merchants with less than $1 billion in annual revenue. Glaspie-Lundstrom said that group often struggles to offer private-label credit due to the expense of working with legacy players.
"What you have is this example of a very valuable product type that merchants love and their customers love, but a huge, untapped market that has heretofore been unserved, and so that's what we're doing with Tandym," Glaspi-Lundstrom told Insider.
But despite how hot the market has gotten, Stefanie Sample said she ended up working in the space by accident.
Sample is the founder and CEO of Fundid, a new fintech that provides credit and lending products to small businesses.
This May, Fundid announced a $3.25 million seed round led by Nevcaut Ventures. Additional investors include the Artemis Fund and Builders and Backers. The funding announcement capped off the company's first year: Sample introduced the Fundid concept in April 2021, launched its website in May, and began raising capital in August.
"I never meant to do Fundid," Sample told Insider. "I never meant to do something that was venture-backed."
Branded cards have long been a way for merchants with the appropriate bank relationships to create additional revenue and build customer loyalty.
The rise of embedded payments, or the ability to shop and pay in a seamless experience within a single app, has broadened the number of companies looking to launch branded cards.
Highnote is a startup that helps small to mid-sized merchants roll out their own debit and pre-paid digital cards.
The fintech emerged from stealth on Tuesday to announce it raised $54 million in seed and Series A funding.
Many of those dollars flow to small-and-medium sized businesses, even though larger corporations are awarded the bulk of contracts by volume. Of the roughly $680 billion in federal contracts awarded in 2020, roughly a quarter, according to federal guidelines, or some $146 billion that year, went to smaller businesses.
But peeking under the hood of the procurement process, the cofounders of OppZo — Randy Garrett and Warren Reed — saw an opportunity to streamline how smaller-sized businesses can leverage those contracts to tap in to capital.
Securing a deal is "a government contractor's best day and their worst day," as Garrett, OppZo's president, likes to put it.
"At that point they need to pay vendors and hire folks to start the contract. And they may not get their first contract payment from the government for as long as 120 days," Reed, the startup's CEO, told Insider.
ComplYant's founder Shiloh Jackson wants to help people be present in their bookkeeping.
ComplYant
After 14 years in tax accounting, Shiloh Johnson had formed a core philosophy around corporate accounting: everyone deserves to understand their business's money and business owners need to be present in their bookkeeping process.
She wanted to help small businesses understand "this is why you need to do what you're doing and why you have to change the way you think about tax and be present in your bookkeeping process," she told Insider.
The Los Angeles native wanted small businesses to not only understand business tax no matter their size but also to find the tools they needed to prepare their taxes in one spot. So Johnson developed a software platform that provides just that.
Smaller firms have adopted this corporate-financial software en masse, boosting growth throughout the pandemic for relatively new entrants like Ramp and massive, industry stalwarts like Intuit.
But it's no easy task to connect all of those tools into one, seamless process. And while accounting operations might be far from where many startup founders want to focus their time, having efficient back-end finances does mean time — and capital — freed up to spend elsewhere.
For Decimal CEO Matt Tait, there's ample opportunity in "the boring stuff you have to do to survive as a company," he told Insider.
Launched in 2020, Decimal provides a back-end tech layer that small- and medium-sized businesses can use to integrate their accounting and business-management software tools in one place.
On Wednesday, Decimal announced a $9 million seed fundraising round led by Minneapolis-based Arthur Ventures, alongside Service Providers Capital and other angel investors.
About a decade ago, politician Stacey Abrams and entrepreneur Lara Hodgson were forced to fold their startup because of a kink in the supply chain — but not in the traditional sense.
Nourish, which made spill-proof bottled water for children, had grown quickly from selling to small retailers to national ones. And while that may sound like a feather in the small business' cap, there was a hang-up.
"It was taking longer and longer to get paid, and as you can imagine, you deliver the product and then you wait and you wait, but meanwhile you have to pay your employees and you have to pay your vendors," Hodgson told Insider. "Waiting to get paid was constraining our ability to grow."
While it's not unusual for small businesses to grapple with working capital issues, the dust was still settling from the Great Recession. Abrams and Hodgson couldn't secure a line of credit or use financing tools like factoring to solve their problem.
The two entrepreneurs were forced to close Nourish in 2012, but along the way they recognized a disconnect in the system.
"Why are we the ones borrowing money, when in fact we're the lender here because every time you send an invoice to a customer, you've essentially extended a free loan to that customer by letting them pay later," Hodgson said. "And the only reason why we were going to need to possibly borrow money was because we had just given ours away for free to Whole Foods," she added.
Amazon has long dominated e-commerce with its one-click checkout flows, offering easier ways for consumers to shop online than its small-business competitors.
Bolt gives small merchants tools to offer the same easy checkouts so they can compete with the likes of Amazon.
The startup raised its $393 million Series D to continue adding its one-click checkout feature to merchants' own websites in October.
Bolt markets to merchants themselves. But a big part of Bolt's pitch is its growing network of consumers — currently over 5.6 million — that use its features across multiple Bolt merchant customers.
Roughly 5% of Bolt's transactions were network-driven in May, meaning users that signed up for a Bolt account on another retailer's website used it elsewhere. The network effects were even more pronounced in verticals like furniture, where 49% of transactions were driven by the Bolt network.
"The network effect is now unleashed with Bolt in full fury, and that triggered the raise," Bolt's founder Ryan Breslow told Insider.
This payment-splitting fintech wants customers to ditch buy now, pay later at checkout.
Kasheesh allows users to split online payments across several debit and credit cards. The financial-technology company positions itself as a "responsible" alternative to buy now, pay later (BNPL) services, which have been criticized by some financial advisors as "predatory lending."
"We want to wedge ourselves in at the point of transaction before they do that damage to their credit, so that way they can actually start building themselves in a financially healthy situation," Sam Miller, cofounder and CEO at Kasheesh, told Insider.
Kasheesh generates a one-time-use "card" number for each purchase, which allows the user to split an online payment across their debit and credit cards of choice. Kasheesh works on any platform where Visa or Mastercard is accepted.
Three years ago, Patricia Montesi realized there was a disconnect in the payments world.
"A lot of new economy companies or fintech companies were looking to mesh up a lot of payment modalities that they weren't able to," Montesi, CEO and co-founder of Qolo, told Insider.
Integrating various payment capabilities often meant tapping several different providers that had specializations in one product or service, she added, like debit card issuance or cross-border payments.
"The way people were getting around that was that they were creating this spider web of fintech," she said, adding that "at the end of it all, they had this mess of suppliers and integrations and bank accounts."
The 20-year payments veteran rounded up a group of three other co-founders — who together had more than a century of combined industry experience — to start Qolo, a business-to-business fintech that sought out to bundle back-end payment rails for other fintechs.
Employees at companies large and small know the importance — and limitations — of how firms manage their payrolls.
A new crop of startups are building the API pipes that connect companies and their employees to offer a greater level of visibility and flexibility when it comes to payroll data and employee verification.
On Thursday, one of those names, Atomic, announced a $40 million Series B fundraising round co-led by Mercato Partners and Greylock, alongside Core Innovation Capital, Portage, and ATX Capital.
The round follows Atomic's Series A round announced in October, when the startup raised a $22 million Series A from investors including Core Innovation Capital, Portage, and Greylock.
When it comes to high-flying tech startups, headlines and investors typically tend to focus on industry "disruption" and the total addressable market a company is hoping to reach. Expense cutting as a way to boost growth typically isn't part of the conversation early on, and finance teams are viewed as cost centers relative to sales teams.
But one fast-growing area of business payments has turned its focus to managing those costs. Startups like Ramp and established names like Bill.com have made their name offering automated expense-management systems.
Now, one new fintech competitor, Glean, is looking to take that further by offering both automated payment services and tailored line-item accounts-payable insights driven by machine-learning models.
Glean's CFO and founder, Howard Katzenberg, told Insider that the genesis of Glean was driven by his own personal experience managing the finance teams of startups, including mortgage lender Better.com, which Katzenberg left in 2019, and online small-business lender OnDeck.
"As a CFO of high-growth companies, I spent a lot of time focused on revenue and I had amazing dashboards in real time where I could see what is going on top of the funnel, what's going on with conversion rates, what's going on in terms of pricing and attrition," Katzenberg told Insider.
Agora founders Noam Kahan, CTO, Bar Mor, CEO, and Lior Dolinski, CPO
Agora
For alternative asset managers of any type, the operations underpinning sales and investor communications are a crucial but often overlooked part of the business. Fund managers love to make bets on markets, not coordinate hundreds of wire transfers to clients each quarter or organize customer-relationship-management databases.
Within the $10.6 trillion global market for professionally managed real-estate investing, that's where Tel Aviv and New York-based startup Agora hopes to make its mark.
Founded in 2019, Agora offers a set of back-office, investor relations, and sales software tools that real-estate investment managers can plug into their workflows.
On Wednesday, Agora announced a $9 million seed round, led by Israel-based venture firm Aleph, with participation from River Park Ventures and Maccabee Ventures. The funding comes on the heels of an October 2020 pre-seed fund raise worth $890,000, in which Maccabee also participated.
LEX Markets cofounders and co-CEOs Drew Sterrett and Jesse Daugherty.
LEX Markets
Drew Sterrett was structuring real-estate deals while working in private equity when he realized the inefficiencies that existed in the market.
Only high-net worth individuals or accredited investors could participate in commercial real-estate deals. If they ever wanted to leave a partnership or sell their stake in a property, it was difficult to find another investor to replace them. Owners also struggled to sell minority stakes in their properties and didn't have many good options to recapitalize an asset if necessary.
In short, the market had a high barrier to entry despite the fact it didn't always have enough participants to get deals done quickly.
"Most investors don't have access to high-quality commercial real-estate investments. How do we have the oldest and largest asset class in the world and one of the largest wealth creators with no public and liquid market?" Sterrett told Insider. "It sort of seems like a no-brainer, and that this should have existed 50 or 60 years ago."
Fintechs looking to transform how insurance policies are underwritten, issued, and experienced by customers have grown as new technology driven by digital trends and artificial intelligence shape the market.
And while verticals like auto, homeowner's, and renter's insurance have seen their fair share of innovation from forward-thinking fintechs, one company has taken on the massive life-insurance market.
Founded in 2017, Ladder uses a tech-driven approach to offer life insurance with a digital, end-to-end service that it says is more flexible, faster, and cost-effective than incumbent players.
There's been no shortage of funds flowing into insurance-technology companies over the past few years.
Private-market funding to insurtechs soared to $15.4 billion in 2021, a 90% increase compared to 2020. Some of the most well-known consumer insurtech names — from Oscar (which focuses on health insurance) to Metromile (which focuses on auto) — launched on the public markets last year, only to fall over time or be acquired as investors questioned the sustainability of their business models.
In the commercial arena, however, the head of one insurtech company thinks there is still room to grow — especially for those catering to small businesses operating in an entirely new, pandemic-defined environment.
"The bigger opportunity is in commercial lines," Tanner Hackett, the CEO of management liability insurer Counterpart, told Insider.
"Everywhere I poke, I'm like, 'Oh my goodness, we're still in 1.0, and all the other businesses I've built were on version three.' Insurance is still in 1.0, still managing from spreadsheets and PDFs," added Hackett, who also previously co-founded Button, which focuses on mobile marketing.
A veteran of the online-insurance world is looking to revolutionize the way the industry prices risk for commercial properties with the help of artificial intelligence.
Insurance companies typically send inspectors to properties before issuing policies to better understand how the building is maintained and identify potential risks or issues with it. It's a process that can be time-consuming, expensive, and inefficient, making it hard to justify for smaller commercial properties, like apartment and condo buildings.
Insurtech Honeycomb is looking to fix that by using AI to analyze a combination of third-party data and photos submitted by customers through the startup's app to quickly identify any potential risks at a property and more accurately price policies.
"That whole physical inspection thing had really good things in it, but it wasn't really something that is scalable and, it's also expensive," Itai Ben-Zaken, Honeycomb's cofounder and CEO, told Insider. "The best way to see a property right now is Google street view. Google street view is usually two years old."
Jaideep Singh is the CEO and co-founder of FlyFin, an AI-driven tax preparation software program for freelancers.
FlyFin
Some people, particularly those with families or freelancing businesses, spend days searching for receipts for tax season, making tax preparation a time consuming and, at times, taxing experience.
That's why in 2020 Jaideep Singh founded FlyFin, an artificial-intelligence tax preparation program for freelancers that helps people, as he puts it, "fly through their finances."
FlyFin is set up to connect to a person's bank accounts, allowing the AI program to help users monitor for certain expenses that can be claimed on their taxes like business expenditures, the interest on mortgages, property taxes, or whatever else that might apply.
"For most individuals, people have expenses distributed over multiple financial institutions. So we built an AI platform that is able to look at expenses, understand the individual, understand your profession, understand the freelance population at large, and start the categorization," Singh told Insider.
Lance is a new digital bank hoping to simplify the life of those workers by offering what it calls an "active" approach to business banking.
"We found that every time we sat down with the existing tools and resources of our accountants and QuickBooks and spreadsheets, we just ended up getting tangled up in the whole experience of it," Lance cofounder and CEO Oona Rokyta told Insider.
Lance offers subaccounts for personal salaries, withholdings, and savings to which freelancers can automatically allocate funds according to custom preset levels. It also offers an expense balance that's connected to automated tax withholdings.
In May, Lance announced the closing of a $2.8 million seed round that saw participation from Barclays, BDMI, Great Oaks Capital, Imagination Capital, Techstars, DFJ Frontier, and others.
The way people work has fundamentally changed over the past year, with more flexibility and many workers opting to freelance to maintain their work-from-home lifestyles.
But managing a freelance or contractor workforce is often an administrative headache for employers. Worksome is a startup looking to eliminate all the extra work required for employers to adapt to more flexible working norms.
Worksome started as a freelancer marketplace automating the process of matching qualified workers with the right jobs. But the team ultimately pivoted to a full suite of workforce management software, automating administrative burdens required to hire, pay, and account for contract workers.
In May, Worksome closed a $13 million Series A backed by European angel investor Tommy Ahlers and Danish firm Lind & Risør.
HoneyBook cofounders Dror Shimoni, Oz Alon, and Naama Alon.
HoneyBook
While countless small businesses have been harmed by the pandemic, self-employment and entrepreneurship have found ways to blossom as Americans started new ventures.
Half of the US population may be freelance by 2027, according to a study commissioned by remote-work hiring platform Upwork. HoneyBook, a fintech startup that provides payment and operations support for freelancers, in May raised $155 million in funding and achieved unicorn status with its $1 billion-plus valuation.
Durable Capital Partners led the Series D funding with other new investors including renowned hedge fund Tiger Global, Battery Ventures, Zeev Ventures, and 01 Advisors. Citi Ventures, Citigroup's startup investment arm that also backs fintech robo-advisorBetterment, participated as an existing investor in the round alongside Norwest Venture partners. The latest round brings the company's fundraising total to $227 million to date.
Pay-as-you-go compliance for banks, fintechs, and crypto startups
Neepa Patel, Themis' founder and CEO
Themis
When Themis founder and CEO Neepa Patel set out to build a new compliance tool for banks, fintech startups, and crypto companies, she tapped into her own experience managing risk at some of the nation's biggest financial firms.
Having worked as a bank regulator at the Office of the Comptroller of the Currency and in compliance at Morgan Stanley, Deutsche Bank, and the enterprise blockchain company R3, Patel was well-placed to assess the shortcomings in financial compliance software.
But Patel, who left the corporate world to begin work on Themis in 2020, drew on more than just her own experience and frustrations to build the startup.
"It's not just me building a tool based on my personal pain points. I reached out to regulators. I reached out to bank compliance officers and members in the fintech community just to make sure that we're building it exactly how they do their work," Patel told Insider. "That was the biggest problem: No one built a tool that was reflective of how people do their work."
For six years, Silverberg was a venture capitalist at Draper Fisher Jurvetson and Private Credit Investments making bets on startups.
"I was meeting with thousands of founders in person each year, watching them one at a time go through this friction where they're meeting a ton of investors, and the investors are all asking the same questions," Silverberg told Insider.
He switched gears about three years ago, moving to the opposite side of the metaphorical table, to start Hum Capital, which uses artificial intelligence to match investors with startups looking to fundraise.
On August 31, the New York-based fintech announced its $9 million Series A. The round was led by Future Ventures with participation from Webb Investment Network, Wavemaker Partners, and Partech.
Kamino cofounders Gut Fragoso, Rodrigo Perenha, Benjamin Gleason, and Gonzalo Parejo
Kamino
There's more venture capital flowing into Latin America than ever before, but getting the funds in founders' hands is not exactly a simple process.
In 2021, investors funneled $15.3 billion into Latin American companies, more than tripling the previous record of $4.9 billion in 2019. Fintech and e-commerce sectors drove funding, accounting for 39% and 25% of total funding, respectively.
However, for many startup founders in the region who have successfully sold their ideas and gotten investors on board, there's a patchwork of corporate structuring that's needed to access the funds, according to Benjamin Gleason, who was the chief financial officer at Groupon LatAm prior to cofounding Brazil-based fintech Kamino.
It's a process Gleason and his three fellow Kamino cofounders have been through before as entrepreneurs and startup execs themselves.
Most often, startups have to set up offshore financial accounts outside of Brazil, which "entails creating a Cayman [Islands] holding company, a Delaware LLC, and then connecting it to a local entity here and also opening US bank accounts for the Cayman entity, which is not trivial from a KYC perspective," said Gleason, who founded open-banking fintech Guiabolso in Sao Paulo. His partner, Gonzalo Parejo, experienced the same toils when he founded insurtech Bidu.
"Pretty much any international investor will usually ask for that," Gleason said, adding that investors typically cite liability issues.
"It's just a massive amount of bureaucracy, complexity, a lot of time from the founders. All of this just to get the money from the investor that wants to give them the money," he added.
Danielle Cohen-Shohet, CEO and founder of GlossGenius
GlossGenius
Danielle Cohen-Shohet might have started as a Goldman Sachs investment analyst, but at her core she was always a coder.
After about three years at Goldman Sachs, Cohen-Shohet left the world of traditional finance to code her way into starting her own company in 2016.
"There was a period of time where I did nothing, but eat, sleep, and code for a few weeks," Cohen-Shohet told Insider.
Her technical edge and knowledge of the point-of-sale payment space led her to launch a software company focused on providing behind-the-scenes tech for beauty and wellness small businesses.
Cohen-Shohet launched GlossGenius in 2017 to provide payments tech for hair stylists, nail technicians, blow-out bars, and other small businesses in the space.