The demise of BaaS fintech Synapse could derail the funding prospects of other startups in the sector

welcome to TechCrunch Fintech! This week, we look at the long-term implications of Synapse’s bankruptcy on the fintech industry, Majority’s impressive ARR milestone, and much more!

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The big story

Last week we reported how Copper bank, a digital banking service aimed at teenagers, abruptly discontinued its bank deposit accounts and debit cards. The startup said its banking middleware provider, Synapse, was terminating his service “imminently”. This situation is just one of many in which businesses and consumers are being impacted by the implosion of banking-as-a-service (BaaS) company Synapse. I wrote an in-depth article on the potential short- and long-term implications of its demise for the fintech industry. While this is certainly not the only bad news, it shows how dangerous things are for the often interdependent world of fintech when a key player runs into trouble.

Analysis of the week

Besides Copper, so many niche digital banks have struggled lately that it was even more remarkable to see an immigrant banking platform Majority not only raising more money, but also revealing that it had reached $40 million in ARR in April. This is no easy task, especially in a crowded space that includes competitors such as Comun, Maza, Alza and Welcome Technologies. Founded in 2019 by Swedish immigrant Magnus Larsson, Majority says that over the past year the company has tripled its revenue while the number of users has doubled.

Dollars and cents

UK Financial Technology Speed, which targets insurance companies with an all-in-one cash management and payments platform, has closed a $93 million Series C funding round led by investment giant KKR. The company said it would redouble its expansion efforts in the United States.

Finout, a set of enterprise-focused tools designed to help manage and optimize cloud costs, last week closed a $26 million Series B round led by Red Dot Capital. We covered the company’s stealth launch in 2022. Finout says it has attracted high-profile clients like The New York Times, Tenable and Wiz despite this crowded market and increased its annual recurring revenue by nine times 2022 to 2023.

Founded by Peter Thiel Valar Companies – which has backed a number of fintechs – has raised a $300 million fund, half the size of the last one.

What else do we write

Google Pay announced last week the deployment of several updates capitalizing on its integrations with other Google products, such as Android and the Chrome browser. People who pay with Google Pay can now see their card’s benefits and perks before selecting a card. Additionally, they can use “buy now, pay later” through partners like Affirm and Zip and fill in their card details via biometrics or a PIN, instead of entering their security code. The changes aim to improve the consumer experience when using Google Pay and make it a more competitive option compared to other payment methods.

Indian digital payments platform Pay warned of job cuts after announcing its net loss widened in the fourth quarter as it grapples with a recent regulatory crackdown.

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