FinTech-as-a-Service Startup Unit Makes Its Debut
Despite numerous challenges, the FinTech industry has managed to have a fairly successful year. From significant funding rounds to major acquisitions, there was plenty of big and positive news to go around. Now, as the year nears an end, the disrupters may be seeing their own disruption as the startup Unit brings their banking-features-as-a-service model to market.
Last week, Unit not only announced its official launch but also revealed that it had raised $18.6 million ahead of the occasion. Those funds came from Better Tomorrow Ventures, Aleph, TLV Partners, Flourish Ventures, Operator Partners, and 30 angel investors. Additionally, Unit counts alums from the likes of Plaid, Chime, Lemonde, Venmo, and others among their team members, investors, and advisors.
In recent years, many FinTech have rolled out their own banking services. Now, Unit is looking to make that process easier, allowing other brands to offer financial services to their customers. These services include high-yield savings, debit cards, payments, and lending — with Unit handling things such as banking relationships and compliance. As a result, Unit estimates that using their API solution will allow companies to launch their own financial services with an investment of less than $50,000 and get it up in less than two months whereas other options could take upwards of a year and cost more than $2 million.
With the debut of Unit, the startup says it’s also introducing the era of “FinTech 2.0.” As the company’s co-founder and CEO Itai Damti explains, “This era is not about 100 FinTech startups trying to beat incumbents with slightly better products. It’s about thousands of tech companies using their unfair advantage — the flywheel of distribution, trust, software and data — to launch massively successful FinTech businesses in their verticals.” Damti added, “Whether you label them as FinTech companies or not, the next era of FinTech is all about them.” Meanwhile, Sheel Mohnot of Better Tomorrow Ventures said in a statement, “True innovation in financial services requires a technical partner that straddles the finance and the technology part of FinTech, and none do it better than Unit. We’ve backed many FinTech companies through the years and think many of the next generation of companies will be built on top of Unit.”
While $18.6 million may be a relatively small sum compared to some of the massive rounds established FinTechs like Robinhood have seen in recent months, it still gives Unit a nice financial runway to prove their “FinTech 2.0” and banking-features-as-a-service concept. Should it take off, we may end up seeing a shift in current FinTech trends, with more startups choosing a route like Unit or Galileo instead of building out their own products. It just goes to show that an industry such as FinTech is constantly evolving and startups should always be thinking about what’s next.