The market for fintech companies has grown in recent years, as venture capital has come calling to find innovative new startups engaged in business ranging from mobile banking to point of sale financing and accelerating payments. Several startup firms in the space have recently raised additional funding to accelerate growth in some unique approaches to financial technology.
Cushion, an app that helps U.S. consumers negotiate bank and credit card fees, said it raised $2.8 million in a seed round led by Afore Capital, which was an existing, pre-seed investor.
Additional participants in the seed funding include 9Yards Capital, Flourish, Green Cow Venture Capital and Vestigo Ventures.
Cushion uses an AI-based bot to connect with banks and analyze transaction histories, identify fees and interest charges and then negotiates their removal. The funding will be used to hire additional data scientists and engineers, scale the current platform and develop new financial health-driven products, according to the company.
"Americans spend over $200 billion a year in bank fees and credit card interest," Paul Kesserwani, founder and CEO of Cushion said in a company release. "These penalties chip away at people's hard earned money and do serious damage to their finances."
Since launching in 2018, the San Francisco-based firm has helped negotiate about $1 million in bank fee refunds. About 93 percent of Cushion's customers have had bank fees in the past 90 days and about 85% have gotten some or all of the fees waived or completely removed through the bot.
Subscription collection
Gravy, an Atlanta-based startup that helps companies recover said it raised $1 million in seed funding.
The company specializes in helping subscription-based companies retain customers and recover lost credit card payments. The company said it uses a combination of custom workflow technology and human communication in an industry that is often dominated by dunning software and hardcore collection tactics.
The company, which launched in 2017, has recovered more than $15 million in single-saved transactions over the past 20 months, and expects to double its revenue and the size of its staff before the end of 2019.
"Before I started Gravy with my partner, Renee Weber, I owned an online business built on recurring subscriptions and memberships," said Casey Graham, CEO in a company release. "Although we saw incredible growth month over month on the front end of the business, we always had trouble recovering failed credit card payments and retaining customers that were about to churn."
The firm says it is already cash flow positive, but saw an opportunity to raise this new funding with the help of its board of directors and a few local entrepreneurs. The company has a goal of recovering $1 billion for small businesses by the year 2023.
Most of Gravy's customers are in one of four categories, e-learning/online education, SaaS, subscription boxes or health and fitness, according to a spokesman for the company. He added however that Gravy can work with any company that accepts recurring credit card payments.
Cover photo: iStock