New banks, Podcasts

The Challengers 12: Visa buys Plaid, Starling shoots for breakeven, Monzo co-founder quits to join alpaca farm

  • On this episode of The Challengers, Zack and Josh discuss the impact of Visa's acquisition of Plaid.
  • Also, Starling wants to reach breakeven in 2021. And alpaca farms.
close

Email a Friend

The Challengers 12: Visa buys Plaid, Starling shoots for breakeven, Monzo co-founder quits to join alpaca farm

In this episode of The Challengers, Josh Liggett and Zack Miller discuss Visa’s $5.3 billion acquisition of Plaid. Admittedly, data aggregation isn’t that sexy but Zack thinks it is the underpinning of modern financial technology. Data agg enables customer financial data to move securely between financial institutions and fintech apps.

Zack thinks Visa is interested in leveraging Plaid’s inroads into some of the top fintech firms (Robinhood, Venmo, Square) as the payments firm continues to build out its own ecosystem. Josh says that people don’t really understand what Plaid does, and yet Plaid — and solutions like it — are vital to the growth of the digital finance industry.

Next up, Zack cites Tearsheet research that asked financial professionals what they thought of challenger banks. The short of it is that they see top firms like Revolut and Monzo as competitive to consumer banks over the long run. But when it comes to business banking, not a single challenger was deemed even slightly competitive to incumbent commercial banks. Josh doesn’t believe we’ve seen “the one” that’s really going to win at business banking.

Josh was skeptical of Starling’s claims that it will hit breakeven by the end of 2021 in anticipation of a 2022 IPO. Challengers continue to bleed money, so it’s interesting to see a single name in the space emphasizing the move to profitability. This dovetails with Josh’s discussion on unit economics in the last episode of The Challengers.

Just for discussion, Starling’s major competitors in the UK, Monzo and Revolut, reported a pretax loss of £33.1 million ($42.2 million) and a post-tax loss of £32.8 million ($41.8 million) in 2018, respectively. Starling did only somewhat ‘better’, with a pretax loss of £26.8 million ($34.1 million) in the year to November 30, 2018.

Lastly, Zack and Josh talk a little about the work-life balance that’s so elusive in working in early stage fintech. Monzo co-founder, Paul Rippon, resigned this week and said he would join his wife working on an alpaca farm. Finding balance is tough, especially in this competitive space. Good for people who can build stuff, work hard, and then move on.

0 comments on “The Challengers 12: Visa buys Plaid, Starling shoots for breakeven, Monzo co-founder quits to join alpaca farm”

Podcasts

Diebold Nixdorf’s Simon Powley on the integration of physical currency and digital tools

  • Cash use has significantly dropped during the crisis but there are still concerns around fairness in a digital society.
  • Integrating physical currency and digital tools is an important role of banks now and into the foreseeable future.
Zoe Murphy | October 19, 2020
Podcasts

‘Voice reduces the steps to do the things you want to do’: Clinc’s Jon Newhard

  • Conversational AI was all the rage 18 months ago and it's been quiet since.
  • Clinc works with banks like US Bank to improve service outcomes all within a digital agent.
Zachary Miller | October 16, 2020
Podcasts

Inside FIS’ fintech accelerator

  • FIS has announced a new cohort for its fintech accelerator.
  • Tearsheet sits with the head of the accelerator and a founder of a participating company to understand how it works.
Zachary Miller | September 21, 2020
Member Exclusive, Payments, Podcasts

Payoneer’s Charles Rosenblatt: ‘We found a way to play on both sides of the market’

  • Charles Rosenblatt has a long career in payments.
  • Joining Payoneer recently as chief strategy officer, he joins us to discuss the company's progress and future plans.
Zachary Miller | September 14, 2020
Finance Everywhere, Podcasts

Inside Shopify’s financial services strategy

  • Shopify provides more than a million merchants with the tools they need to start, manage and grow their businesses.
  • By looking after all aspects of business operations in one place, Shopify is able to build financial products -- including banking, money management, credits and payments -- that are tailored to sellers’ needs.
Suman Bhattacharyya | September 11, 2020
More Articles