TechCrunch Fintech
Welcome to TechCrunch’s fintech section! This week, we’re diving into the ongoing fallout from Synapse’s bankruptcy, how Layer is disrupting SMB accounting, and more.
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The Big Story
Synapse’s Bankruptcy Worsens
The prospects for Synapse, a troubled banking-as-a-service (BaaS) startup, took a turn for the worse last week when a U.S. Trustee filed an emergency motion asking to convert the company’s debt reorganization Chapter 11 bankruptcy into a liquidation Chapter 7 due to ‘gross mismanagement’ of its estate. It appears that up to 20 million fintech depositors are at risk as a result of Synapse’s bankruptcy.
According to Fintech Business Weekly’s Jason Mikula, "Numerous end users of fintechs that have had their ability to access their funds frozen shared the devastating impact it has had on their lives with the court and the hundreds of attendees dialed in to the hearing [on Friday]." The fallout from Synapse’s collapse continues.
Analysis of the Week
Layer Seeks to Disrupt SMB Accounting
There seems to be a growing demand for an alternative to QuickBooks, the legacy accounting software for small and medium-sized businesses (SMBs). Layer, a startup that offers embedded accounting, has caught attention with its $2.3 million raise.
Better user experience is at the core of what Layer describes as an improvement over traditional accounting solutions. The company’s customers are those working with SMBs to provide accounting and bookkeeping features inside their own products. Better Tomorrow Ventures led the pre-seed investment into the startup, joined by executives from companies like Square, Plaid, Unit, and Check.
Dollars and Cents
PayHOA Raises $27.5 Million in Series A Round
PayHOA is a Kentucky-based startup that offers software for self-managed homeowner associations (HOAs). The company’s success demonstrates how real-world problems can be turned into opportunities. PayHOA recently raised $27.5 million in a Series A round, which is notable given the challenging environment where nearly $30 million Series A rounds are uncommon.
Buy Now, Pay Later
BNPL Services Gain Popularity Worldwide
Buy now, pay later (BNPL) services have become increasingly popular globally. However, recent issues with one of these companies highlight the risks associated with BNPL. In a bid to address these concerns, regulators and lawmakers worldwide are stepping in to establish guidelines for this rapidly growing industry.
Emerging Trends in Fintech
Digital Wallets Gain Ground in Africa
The adoption of digital wallets is on the rise in Africa, driven by increasing mobile penetration and a growing need for secure payment solutions. Startups like M-Pesa and TransferTo have capitalized on these trends, providing innovative payment options that cater to local markets.
The Future of Fintech
Fintech Continues to Transform Financial Services
The fintech industry is undergoing significant transformations as companies strive to provide more efficient, accessible, and secure financial services. As technology advances, we can expect even more innovative solutions to emerge in the coming years.
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