TechCrunch Fintech: Meet PayJoy, a fintech operating at the intersection of doing good and making money

Welcome to TechCrunch Fintech! This week, we’re looking at how two fintech companies serving the underserved are faring, and more!

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The big story

PayJoy is an example of a company with positive unit economics and a mission to help the underserved. It’s not often that we see those two things intersect, so when we do, we get pretty excited. I wrote about the company’s milestone of achieving $300 million in annualized revenue and profitability last year, while also managing to land $150 million in Series C funding. The company’s model is unique: It helps people build credit through 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. Read all about its growth here.

Analysis of the week

Petal is another fintech company that aims to help the underserved “build credit, not debt.” Last May, TechCrunch wrote about the company’s $35 million raise and plans to spin off its data unit. Last week, Empower Finance announced its plans to acquire Petal, which apparently began looking for buyers last year “when it was short on cash,” according to Fortune. A spokesperson for Petal told me via email: “Like Petal, Empower … uses cash flow underwriting for its suite of credit products. … With the Petal acquisition, it will soon have a family of credit cards to complement that offering.” Will we see more M&A in 2024? I’m eager to see.

Dollars and cents

TransferGo, the U.K.-based fintech best known as a consumer platform for global remittances, has raised a $10 million growth funding round from Taiwan-based investor Taiwania Capital, with a view to expanding in the Asia-Pacific region. It last raised a $50 million Series C funding round in 2021. TransferGo claims its growth, combined with the new investment, doubles its valuation.

What else we’re writing

Brazilian startup Salvy, a mobile carrier for businesses, was the only company based in Latin America in Y Combinator’s latest batch, the accelerator confirmed to TechCrunch’s Anna Heim. That’s a significant drop compared to cohorts that went through the accelerator during COVID when it was remote, but also more recent classes. For example, there were 33 Latin American companies in Y Combinator’s Winter 2022 batch. Could the overall state of the fintech sector be partly to blame? Historically, around one-third of the 231 Latin American companies that went through YC focused on fintech. And with fintech funding on the decline, this could perhaps partly explain YC’s lack of LatAm interest.

High-interest headlines

Investors circle ‘most hated’ fintech and e-commerce sectors

Stride and Utah set new precedents in benefits for independent workers

US startup Parafin lands $125M warehouse facility from SVB and Trinity Capital

Tabs secures $7M seed funding to enhance AI-driven accounts receivable platform

UAE’s fintech Fortis secures $20M in a Series A round 

Anrok hits a $250M valuation with a mundane idea: calculating

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