Premium Debit Card Startup Point Raises $46.5 Million
With many consumers still wary of the trappings inherent to credit cards, a FinTech with a focus on creating a more rewarding debit card has just announced a new found of investment. As TechCrunch reports, neobank startup Point has closed a $46.5 million funding round. The Series B was led by returning investor Valar Ventures while Breyer Capital, YC Continuity, and Human Capital also participated. This round follows Point’s $10.5 million Series A and brings the startups’s total funding to date up to $60 million. With the newly acquired funds, the company states that it will expand its team while also bringing new features and products to its platform.
Point offers a premium debit card that it says is “designed for everyday spending.” In particular, Point’s product aims to bring credit card rewards to a debit card. For example, the card currently allows customers to earn 5 points per dollar spent on select streaming services (including Netflix, Spotify, Pandora, HBO Max, and others), 3x points on delivery and rideshare service purchases, and 1x points on all other purchases. Additionally, Point regularly offers promotional bonuses from select brands. Accrued points do not expire and can then be redeemed for instant cash back at a rate of 1¢ per point.
Beyond these rewards, Point’s debit card customers also enjoy such benefits as cell phone insurance, new purchase insurance, trip cancelation insurance, and more. Cardholders also receive two free ATM withdrawals per month (with a maximum benefit of $8 per month, credited to users’ accounts in the form of points). At this time, Point does charge a $49 annual membership fee, which is billed with customers’ first deposit. Accounting for these perks and subtracting the annual fee, Point estimates that users can achieve $1,230 in value from the card each year.
This impressive Series B for Point continues a streak of challenger bank investments seen in recent months. Last month, One announced a $40 million Series B while Chime revealed a massive $750 million Series G. The latter round now values the neobank at more than $25 billion.
Looking online, it’s clear that Point is already building a fanbase among those who enjoy earning rewards for their spending but don’t want to fall into credit card debt. Now it seems that this fandom is yielding investors as this Series B marks a notable showing for the FinTech. Of course, this funding also shows the continued strength of the challenger bank sector, which has been firing on all cylinders this year. Given these realities, it certainly won’t be long before we see even more reward debit cards hit the market.