“Introducing PayJoy: Bridging the Gap Between Social Impact and Financial Success in Fintech – A Feature by TechCrunch”

Welcome to TechCrunch Fintech! This week, we’re looking at how two fintech companies serving the underserved are faring, and more! The big storyPayJoy is an example of a company with positive unit economics and a mission to help the underserved. It last raised a $50 million Series C funding round in 2021. And with fintech funding on the decline, this could perhaps partly explain YC’s lack of LatAm interest.

Welcome to TechCrunch Fintech! This week, we’re looking at the progress of two fintech companies that are serving underserved populations, among other news and developments.

To get a roundup of TechCrunch’s biggest and most important fintech stories delivered to your inbox every Sunday at 7:00 a.m. PT, subscribe here.

The big story

PayJoy is a prime example of a company with a positive business model and a mission to help those who are underserved. It’s not often that we see these two elements intersect, so when we do, it’s definitely worth taking note.

In last year, I wrote about the company’s impressive achievement of reaching $300 million in annual revenue and turning a profit, while also securing $150 million in Series C funding. Read all about its growth here.

The company’s model is unique: it assists people in building credit by offering pay-as-you-go financing for smartphones. Once the phones are paid off, customers can apply for loans through PayJoy, using their devices as collateral. An innovative concept, indeed.

Analysis of the week

Petal is another fintech company with a similar mission to help the underserved “build credit, not debt.” In last May, TechCrunch reported on the company’s $35 million funding raise and plans to spin off its data unit.

However, last week saw the announcement of Empower Finance‘s plans to acquire Petal, which Fortune claims began seeking buyers last year when it was experiencing financial challenges. According to Petal’s spokesperson, the acquisition will enable Empower to offer a range of credit products since both companies use cash flow underwriting.

Will we see more mergers and acquisitions in 2024? I’m eager to see how this unfolds.

Dollars and cents

TransferGo, a fintech startup based in the U.K. known for its consumer platform for global remittances, recently secured $10 million in growth funding from Taiwanese investor Taiwania Capital. This investment is to support the company’s expansion in the Asia-Pacific region.

This round of funding comes after a $50 million Series C raise in 2021, and TransferGo claims that the combination of this growth and the new investment has doubled its valuation.

What else we’re writing

Brazilian startup Salvy, a mobile carrier for businesses, was the only Latin American company chosen for the latest cohort of Y Combinator, the highly sought-after startup accelerator program. However, this is significantly lower than previous batches that went through the accelerator during the pandemic when it was primarily remote, and also in more recent cohorts.

In the Winter 2022 batch, there were 33 Latin American companies selected for Y Combinator. Could this decrease in Latin American representation be attributed to the overall decline in funding for fintech? Historically, about one-third of the 231 Latin American companies that have gone through YC have focused on fintech. Perhaps this could partly explain the relatively low interest in LatAm by YC in this latest round.

High-interest headlines

Investors are showing a strong interest in the so-called “most hated” sectors of fintech and e-commerce.

In what could be a game-changer for independent workers, Stride, in collaboration with Utah, has set new precedents in benefits for independent workers.

US startup Parafin recently secured a warehouse facility worth $125 million from SVB and Trinity Capital.

Startup Tabs has raised $7 million in seed funding for its AI-driven platform for managing accounts receivable.

The United Arab Emirates‘ fintech startup Fortis recently raised $20 million in a Series A round.

Anrok, with its rather mundane idea of providing accuracy in calculating, has reached a valuation of $250 million.

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Zara Khan

Zara Khan is a seasoned investigative journalist with a focus on social justice issues. She has won numerous awards for her groundbreaking reporting and has a reputation for fearlessly exposing wrongdoing.

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