Fintech Startup Copper Makes Swift Shift After Synapse Bankruptcy
Fintech startup Copper has been significantly impacted by the bankruptcy of the banking-as-a-service platform Synapse, which has led to disruptions in its deposit accounts. This has also affected other companies such as Yotta Technologies and Juno Finance, leaving their customers unable to access their deposit accounts. Despite previously targeting teens and families with its banking platform, Copper has raised $29 million in 2022 and was even nominated for Startup of the Year at the GeekWire Awards. However, the company is now redirecting its focus to its "Earn" product, which enables users to earn money through surveys and games, as it discontinues its debit card and deposit account offerings.
Key Takeaways
- Copper's banking services have been disrupted due to Synapse's bankruptcy.
- The failure of TabaPay's acquisition deal with Synapse has affected Copper and other associated companies.
- Copper is swiftly pivoting to its "Earn" product following the Synapse fallout.
- Despite the company's efforts to assist the majority, some Copper customers are experiencing delays in receiving funds.
- Copper aims to prioritize its "Earn" product and white-label partnerships to continue providing financial wellness and education.
Analysis
Synapse's bankruptcy has not only disrupted Copper but also impacted Yotta Technologies and Juno Finance, leading to interruptions in deposit accounts and customer access to funds. Copper's decision to shift its focus to the "Earn" product may have implications for its white-label partnerships and financial wellness services. Additionally, this situation could potentially result in financial consequences for the investors and partners of these fintech startups. In the long run, it might prompt fintech companies to consider building their own infrastructure to reduce dependence on third-party service providers.
Did You Know?
- Banking-as-a-service platform (BaaS): This model allows non-banking companies to integrate banking services into their products through APIs provided by a bank or financial institution without developing their own banking infrastructure. In the case of Copper, it utilized Synapse as a BaaS platform to offer deposit accounts to its customers.
- Synapse bankruptcy: With Synapse filing for bankruptcy, the company is seeking protection from its creditors through the bankruptcy court due to its inability to pay debts, leading to the sunset of its services and affecting companies like Copper.
- Copper's "Earn" product: This offering allows users to earn money through surveys and games. With the disruption in deposit account services, Copper is accelerating its pivot to this product to maintain its focus on providing financial wellness and education to its customers.