Robinhood’s crypto bet, AI-powered healthcare, and more on the fall of Fisker | Equity Podcast

This episode is presented by invest Puerto Rico if you believe your business Can go anywhere Puerto Rico is the Place hello and welcome back to equity Techcrunch's Flagship podcast about the Business of startups today is June 7th 24 I'm Maryann azavedo and joining me is Senior TC reporter on the transportation Desk Rebecca Balon Rebecca how are you This week I'm doing great marann thanks So much happy to have you on as always Before we get to the show rundown I want To ask our listeners please don't forget To rate and review us on Apple podcast Spotify or whatever your preferred pod Streamer is we'd really appreciate it Now let's talk about what we're going to Have on the show today before we get Into our deals of the week we'll be Talking about news that broke yesterday About Robin Hood acquiring Global crypto Exchange bit stamp then we'll talk about Two healthc care startups raising money And then we'll dig into fiskers collapse And have our transportation reporter Shan oain give us all the details of his Monthlong investigation into what went On there finally we'll get into the next Generation of fintech lots happening as Always some good some not so good and on That fintech note as mentioned news Broke yesterday that Robin Hood acquired Bit stamp for $200 million or is going To acquire bit stamp this was a surprise

And yet it wasn't Robin Hood has been Dabbling around in the crypto space for A while it's been acquiring different Companies left and right I don't think Anyone quite expected this though They're paying $200 million in cash for This company which is European and it Just shows that the company is really Serious about crypto and its future and Its potential Rebecca what did you think Were you surprised by this I was not Surprised by this I think that Robin Hood will only continue to embrace Cryptocurrency even though I think that It's had some restrictions with Bitcoin In the past due to regulatory scrutiny In the US but one thing that I thought Was interesting about this was as you Said this is a European company so I Think it also signals that Robin Hood is Pushing not just further into crypto but Also just into International markets Yeah I mean definitely it launched its Core stock trading product in the UK Last November started offering crypto Trading in the EU shortly after that so Yeah I I think Robin Hood talking about Ups and downs like we were uh earlier Robin Hood has had his ups and downs Right it went public in mid 2021 things Were kind of like going great it's IPO Valuation was around 32 billion got up To like more than 40 billion it's kind Of down now to about 19 billion which

Still isn't bad it had record so far Down yeah so far down only $19 billion But it did have record earnings I think It was in the first quarter so I mean It's not doing too bad I think a lot of The interest revenue is helped over the Past year or so the deal I think is Expected to close let's see in the first Half of 2025 so we'll be interesting to see what Happens as Robin Hood integrates it into Its its offering what does bitstamp Bring to the table exactly let's see It's a pretty I mean it's been around For a while right it's founded in 2011 It's one of the world's oldest Cryptocurrency exchanges which I did not Know and allows companies individuals to Trade in uh all all manner of C Crytocurrency it was actually acquired By a Belgian Investment Company in 2018 Ripple bought a stake last year so I Think it's just going to really help Robin Hood grow its crypto business Generally they they said in a statement That the team has established one of the Strongest reputations across retail and Institutional crypto investors so that The company will be better positioned to Expand its footprint outside of the US And welcome institutional customers to Robin Hood yeah I like the kind of Blending of making it easy to invest in In just normal stocks and then also kind

Of Decentralized markets as well yeah Definitely so let's move on to our deals Of the week we both picked healthcare Related deals which I think is is great We do have a new Venture reporter Marina Tempkin on board who's been with us a Few months now who's looking more Closely at the health Tech space and There's a lot happening there Rebecca Tell us about sword Health yeah so sword Health has just raised in total $130 Million and its valuation has soared to $3 billion as a result of that I like This story for two reasons so the first Is that sword health is an interesting Product right it's an AI powerered Virtual Physical Therapy startup and I Think that's really cool because Physical therapy is I've been trying to Get an appointment with a physical Therapist for weeks and I'm often too Busy their hours don't work for me it's Really expensive so like I think Something like this could really Democratize access to physical Therapy and I think that they're using The funds to you know beef up the AI as Expected um introduce a human-like voice For its gen named Phoenix to its Musculoskeletal therapy and also help With women's pelvic Health Care therapy Which is so important and I want to see More startups doing this okay clients

Include employers and health plans of Fortune 500 companies that's cool now What I think is really interesting about This aside from the product is how they Raised this money so like I said it's 130 million in total but that's 30 Million in equity and then they let Their employees sell $100 million worth Of equity to new and existing investors Including CA Ventures so they had Actually initially planned to only do $100 million in a secondary round but The company decided at the end of the Day to then raise the 30 million primary Round to update its valuation after Seeing the secondary round was over Subscribed so the reason I think that's Interesting is because Secondaries well they don't exactly give The company that $100 million to play With right but it does help them one With a better valuation two it's a way To attract institutional investors who'd Rather buy big stakes from existing Shareholders rather than dealing with The complications of primary Equity Financing it could signal that sword Health is prepping for an IPO you know The founder and CEO virgilio Bento said They don't need the influx of capital Because they're expecting to be Profitable by end of year and so that 30 Million will just sit in the bank and Collect interest but yeah I just think

It's an interesting Financial instrument To use and I think Maran you were Telling me earlier that another company Has done this as well right yeah Rippling HR tech company recently also Closed a similar round I think I'm Trying to remember the exact details There was yeah it was $200 Million raised a new capital but another $670 Million worth of shares being sold By existing stockholders so this I don't I don't want to say this is a trend but I I can see that companies that seem to Be doing pretty well like these two are Seeing seeing this as an opportunity To give some of these existing Shareholders some liquidity raise Capital you're right it's it's an Interesting strategy sword health is in A unique position I think in the startup World today to be able to do this to Just raise the extra 30 million to have It sit in the bank and they they said They like you said they mainly wanted to Be able to increase their valuation in a Competitive environment too I think it Was a signal that they wanted to send Out publicly they compete heavily with Hinge Health which is also a Multi-billion dollar company so there's A lot of interesting aspects to this Deal and agreed with you too that the Actual technology is pretty fascinating As well yeah so I guess I think sword

Health was founded to treat Musculoskeletal I hate that word Musculoskeletal conditions that range From that ranged from a sprained ankle To a disc compression so it platform Will connect consumers to a virtual Physical therapist consumers get a Tablet and then motion sensors so they Can kind of go through the motions Literally and then get feedback and tips Through this digital therapist so yeah Interesting Tech interesting way to Raise money and you know Healthcare is Just booming right now I I guess as we All continue to sit at our desks and and Hurt our backs right yeah I mean let's Face it Healthcare is something that's Always going to be needed because hey We're all going to get older we're all Going to age and we're all going to Probably unfortunately eventually have Some health problems as we age so yes to Your point Healthcare space is kind of Hot right now I my deal of the week is a Company called Echo Health they just Raised $41 million and I loved this Company what they've built is a AI Enhanced stethoscope and they've sold 500 more than 500 of these to Physicians And healthc care providers so this is Fascinating to me what what this Stethoscope does and talk about really Cool applications of AI is it can Actually help detect heart conditions so

You know with a normal stethoscope There's only so much a doctor can hear Right and there's only so much that it They can detect but with their Stethoscope because they've amassed this Large data set of chest sounds and ECG Information which ECG stands for Electrocardiogram for those who don't Know they've developed these algorithms To detect certain heart conditions like Murmurs even like the beginnings of Heart disease which is fascinating and One of the things also they're trying to Do oh because sorry they can also detect The first signs of heart failure during R exam is one of the things that they Claim yeah and in April they got FDA Clearance for using its AI to help Detect the first signs of heart failure Which is incredible so yeah it was clear To detect heart murmurs which could be a Sign of abnormal heart valves and also What they're trying to do next I think Is develop some AI algorithms to detect Pulmonary conditions such as asthma and Pneumonia that's so cool I love that Isn't that incredible I I so I've had Not to get too deep into personal Experiences I've had family members with A lot of health problems over the years And in one case someone very close to me Had pneumonia was not detected by his Doctor in the office and he got very Very sick as a result and I'm thinking

Well how can you go to a doctor have Them check your lungs they tell you Everything's fine sounds okay send you Home two days later you end up in the ER Find out that you have pneumonia so bad That they tell you that you know if you Go home you could die like I don't get That so when I read about things like This it's like wow I mean how many lives Could be saved by this technology heart Disease as well I mean how our heart Failure you know how many people are Probably suffering from heart failure And have absolutely no clue because how Do you know what you don't know you Don't know okay maybe I need to go get An ultrasound or or ECG or whatever the Case may be how do you know to do that So if if that can be detected during a Routine medical exam again think about All the lives that could be saved well Not just lives but also time like I Actually recently had to go get an ECG And do a stress test and first of all These things take like a lot of time and To get an appointment it takes weeks to Get an appointment with your doctor like People are on these waiting lists for Ages if you could just do all of that in During the routine exam I mean that just Cuts out so much time and Hassle and the Need maybe for someone to have to you Know get hooked up to a bunch of wires And Sprint on a tread in a small

Doctor's office it's very strange Experience but by the way I also want to Note that you you said that more than 500 of these have been sold it was more Than 500,000 I think is what you meant To say these things are F off I meant 500,000 which is a huge difference thank You for catching that no it's I mean Like look all the zeros that we we see So many zeros in our line of work that It's uh you know thanks for pointing That out and speaking of numbers I don't Know if I mentioned that the company Just raised a $41 million series Dr wow We don't know its valuation but still a Pretty significant size in this Environment so uh kudos to both these Companies love to see it hope we see More of it next we're going to have a Break and then we'll talk to our Transportation reporter Shan oain about Fisker and some drama in Fintech what's next in Tech that's not The right question it's where Puerto Rico where an entrepreneurial ecosystem Pulses with connectivity cap capability And possibility where the most Competitive tax incentives in the US FastTrack success and hard work is Rewarded with sunsets and turquoise Waters if you believe your business can Go anywhere Puerto Rico is the place Invest pr.org for/ petc Crunch and we're back with our first

Theme today I'm so excited to say that We have our transportation reporter Extraordinaire Shan oain on the show With us to talk about his months-long Investigative story into Eevee startup Fisker wow talk about drama Sean first Of all how many months exactly did you Work on this story good question and Also happy to be here thank you for Having me uh I would say you know in Earnest I was really working on this Version of this story for a couple weeks To maybe a month or two but some of the Stuff that's in it are things that I've I've I've been talking to people about For many many many more months like Dating back to I mean around the time Some of these things happened some of The stuff in the story takes place in in Like June of last year uh and it wasn't Long after that that I started hearing About some of these things and it was Really just sort of it's been a a a Monthlong process of just trying to Corroborate as much of that as possible To make sure that we get it right well Fill our listeners in for those who Haven't read this incredible story what Exactly happened at Fisker I mean I I Have to say first of all when I you know Read your articles and I looked at the The photos and I was like wow that's Actually a really really pretty car a Really beautiful vehicle and then I

Would read your stories and I was like Oh my gosh but they're just a mess Inside uh the company and the cars so uh Fill the listeners in what happened There sure it's actually that's a great Way into it because for people who are Unfamiliar with the company it's a Company that was started by a relatively Well-known vehical designer named Henrik Fiser who has designed cars for BMW he's Had a long career he even had a startup Back in sort of the first clean tech Boom around the time of the recession Where uh he was trying to make a a Hybrid sports car at the time this is His second go at coming up with a Startup like this this time it's all Electric and and yeah I mean that this Vehicle the ocean SUV launched in uh 2022 or started getting built in 2022 The whole idea of this version of the Company is essentially he wanted to take An asset light approach you know Outsource pretty much as much as Possible have a tier one supplier build The car that's really stands in contrast To a lot of these other startups in the Space like rivan who or Lucid Motors who Are basically trying to do it all Themselves you know still supplying Things from suppliers in the automotive World but trying to build the factories Trying to do pretty much everything that Tesla does and so you know a lot of a

Lot of attention has been put on the Design of the car it's a pretty sharp Looking SUV it's still an SUV it's Nothing radical but there are some nice Touches to it and it looks pretty good But you know as I get into in the story The the problem at this company that you Can sort of apply to all the other Things that have gone wrong with it so Far is there's just not really been any Process in place there you know the sort Of proper processes and procedures that Companies tend to take when building a Car company from scratch a lot of those Weren't here they you know maybe sort of Cavalierly believed that they could get Away with not doing some of these things Because they were a startup and they Were trying to embrace the chaos but This is a very heavy heavily regulated Industry it's a very heavily regulated Product as to not take that approach as It should be yeah people's lives are Literally on the on the line and so you They just did not go down that path and The story really gets into a couple Clear examples where that sort of Metastasized you know this one in Particular where in the runup to Releasing the car these the first of These SUVs were shipped last June in the US and in the run up to that all of a Sudden you know after the design had Been sort of set out and they were

Already working to build the cars with The supplier in in Austria Henrik Fisker Decided you know I want to have wheel Spacers put on these cars and wheel Spacers are these just sort of inserts That go in between the wheel and the Wheel hub and they really are just a Cosmetic type thing where you know it Pushes the wheel out a little bit maybe Makes the car look a little meaner you Know it's it's really a design thing It's unsurprising that it came from him But to do something that late in the Game with a car when usually car Companies have these designs locked Years ahead of time before they do Anything like that it's just it's really Kind of unheard of and it set off this Kind of reaction inside the company of Just sort of like what is going on like This goes well beyond the natural Tension between the design side and the Engineering side you know with Hardware Startups that's always intention but Here it was just sort of like this is Going really far and in the story we get Into how you know there were people on The engineering team who really pushed Back they weren't saying let's not do This they were saying let's find the Right way forward to do it and that was Just never really embraced from what I've been told and so the rest of the Story gets into a lot of other examples

Like that where it's just like the Company felt it didn't need to build out A large stockpile of spare parts which Most companies do and then all of a Sudden they started having trouble with The cars when they started getting on The road in in big numbers and now they Didn't have any spare parts so they Started pinching parts from the Production line in Austria they started Taking apart some of the marketing cars They had they even harvested parts from Henrik's own car that's crazy and I will Say real quick and then you can ask me Anything else uh you know Fisker has Denied some of those things on the Record to us they have told us they Didn't pinch Parts they didn't take cars Apart to put parts in customer cars but It's just not true I don't know why They're denying that so forcefully but It's not true we're not the only one to Report some of this stuff but we have I Think the most detail on it and from Everybody I've spoken to it's just you Know this is what they had to do inside To try to keep the company moving Forward and now they're at a position Where they've stopped production of the Car they're basically on the brink of Bankruptcy and and it's hard to see sort Of a way out for them one of the lines That I I pulled out of your story that I Was like I almost screamed when I read

It and I just want to read it to our Audience is the bolts on the ocean's Hood had a tendency to come loose which Led to some flying up and cracking the Windshield and doing damage to the body I was like what are they saying yeah and And not only not only are these cars you Know potentially dangerous and falling Apart but also apparently as you Reported Fisker was cutting corners on Customer service instead of having like Live humans they were wanting chat Bots Or something but it's like with so many Problems like you you would think that Customer service would be a real Differentiator for that kind of a Company I mean we've seen from Tesla Having you know also not great customer Service I mean their cars function way Better but this is kind of a a thing That really bothers people across Industries is not being able to talk to Someone who can help them fix their Problems and when that is a multi- Thousand very expensive luxury vehicle It's it's pretty yeah I mean Sean yeah I Would just follow up on that point Another thing you had written was that Customers you know like they had dying Cars faulty brakes stuck doors they were Waiting weeks or months for repairs and And then the company was getting sued Left and right those lemon lawsuits I Just find it horrifying that there are

People that have with such huas to think That they can make cars in such a faulty Manner and how do you sleep at night Like how do you sleep at night knowing That you're making money or trying to Make money by selling people these Vehicles that are so shoddy it just Actually infuriates me yeah it's you Know I think the thing I keep coming Back to is you look at the history that Henry fiskers had with that first Startup that I mentioned there were a Lot of things that went wrong that Doomed that startup cuz that startup Ended up going into bankruptcy after he Left his CEO but it it it wound up Failing in that way but you know to me This whole time that I've been reporting On them I've just keep coming back to This idea of like one of the things that Actually really did that company in Among other things was that they got Into production they got that car on the Road and then they weren't really ready To handle the sort of myriad problems That happen just to every car company no Matter how good your car is and you have To be ready to handle all these edge Cases cuz driving is insane people drive A lot so there's just more and more you Know the more cars that get on the road More people use them the more time you Have for them to get into trouble with Them and you know to me I I keep coming

Back to this idea of like if there was One lesson you would imagine someone Like him would have learned from the Failure of that startup is to be Absolutely as ready as possible to Handle the customer service to handle All of this you know it's called in the Industry after sales all of this stuff Building out customer service team Having a stockpile of Service Parts Having reliable Partners who can help Fix the car you know and and just so Much of that wasn't there and that Wasn't for lack of trying on the Employees side I mean I've spoken to Employees who there's one in a story That I wrote in February for us where a Customer told me he was trying to get Help and had so much trouble getting in Touch with the company to get customer Service he wound up talking to one of These people who had helped work on his Car and they were picking up on their Personal cell phone at a funeral you Know like all these employees were Putting in so much time and effort and And also again trying to tell the Leadership hey like there's ways to get Through this and it employees tell me There's this feeling of a lack of trust In the people that were hired there Amongst the leadership it's like they Didn't want to rely on the experience That these people had for whatever

Reason and so this is where we're at you Know and it's yeah there's been so many Scary instances with some of these Problems some of these cars have died on The highway at high speeds the hoods Popping up was a relatively limited Thing probably in the dozen or so range Maybe a little bit more but still part Of me is at least sort of thankful that They were only able to ship around 7,000 Of these things so far because I think If it had if they had been able to hit The targets they were promising which Originally was supposed to be 40,000 Cars last year there would just be so Many more problems on the road given the Quality of the cars that we've seen so Far and so you know I think to an extent They're only still around because they Were only able to ship around 7,000 cars Cuz if they had gone any further than That the the problems I think would have Overwhelmed them by now one of the Things I loved about this article or Like the main thing I loved about it and How deep you went into it is it's just a Reminder that companies are not just These like corporate entities they're Made up of many humans who have Conflicting ideas who make mistakes who Get into arguments and and have these You know differences of opinion and that Has real consequences and it's just yeah The drama is tea and it's like I I guess

This is why succession was so successful Right you know looking you know really Under the looking under the hood right To make a bad Pun It's such a great read I encourage our readers to take a look At it really is Sean um you do amazing Work thank you so much for joining us Today and yes to our listeners if you Haven't yet read it look it up the Article is an excellent read well we're Going to let Sean get back to work but Even though he's leaving we're going to Talk about another one of his Investigative stories this one he worked On with Dominique madori Davis and it Involved a company called lone snap and Yeah talk about drama this is a an AI Mortgage startup that's being sued left And right from creditors I think there's About seven or so lawsuits against it Right now it's been evicted from its Headquarters in Southern California and What is most astounding about all this Is despite all that this company has Managed to raise about $100 million in Funding and debt in the past few years $90 million of which was secured between 202 in 2023 while it was having a lot of these Problems so this just makes me wonder Like did investors do any due diligence I mean what the heck happened here I Mean Rebecca what did you think when you Read about this well one of the backers

Is is this the lead singer of chain Smokers what's going on chain smokers Mantis Ventures oh yeah yeah their Venture not to cast dispersions maybe They're really good at doing their due Diligence but um yeah it's pretty Intense and I think that the company is Not yet shut down but employees are Understandably very concerned I think They used to at their High Point they Had employed more than 100 people and Then after layoffs and attrition that Number is less than 50 according to a Source that spoke to Tech crunch I Wonder if there's like a case for fraud At this stage considering mismanagement Of funds potentially yeah I mean the Entities the seven different creditors That have sued the company or suing the Company collectively alleged that the Startup owes them more more than $2 Million it's also been fined by state And federal agencies and nearly lost its License to operate in Connecticut ouch Wow yeah a lot going on there and you Know we're not really sure what happened I know that a lot of mortgage companies Got hit really hard in 2022 I guess when Interest rates started Rising so that's My guess is maybe the company was doing Pretty well when interest rates were Super low I mean during the pandemic Like we refinanced home for like 2 and a Half% and then you know they surged to

Like 8% I think it got up to like 8% Last year so I don't know my guess is Maybe the company ran into some some Troubles there according to the story in 2021 loan snap originated nearly 1300 Loans for a total value of almost 500 Million but by 2023 the company reported to the Consumer Financial Protection Bureau That had originated only 122 loans for The year wow I'm reading from Sean and Dominic that people who spoke to Tech Crunch say that you know they're they're Kind of as usual kind of blaming the Current state that it's in on quote Terrible leadership overspending on Futility and institutional investors Falling for the Charming facade that Carl can show and Carl is the founder Carl Jacob yeah I mean it's happened so Many times more than we can count right Adam Newman is an example where Investors get you know caught up in in The Charisma of a founder and just sort Of blindly keep backing them yeah I mean Since 2021 there's been several Complaints filed against the company With the Better Business Bureau which Now has an F rating on there about that So yeah so allegations of uh charging Non-refundable fees failing to close on Loans in a timely manner failing to pay Taxes from an escro account boy I'd be Livid if that were me so anyway lots

Going on there Kudos uh once again to Sean for his investigative reporting and Dom as well who pitched in we will have To wait and see what happens at Lon snap But hey not everything is bad in fintech I wrote about a couple of very Interesting startups in the past couple Of weeks that are focused on the Gen Z Market and this was really interesting To me I think because there were a lot Of similarities between the two Companies although they they do Different things one of them is called FR and Rebecca I'll let you share what That stands for stands for effing Rich effing Rich okay let's let's keep It PG people thank you yeah FR and then Fizz so frit was founded by two young Ladies who met while they were at NYU Abu Dhabi and one of them was a former Model team model she became financially Independent at a young age and then the Other she just also said she had to Learn to manage money early on and they They kind of bonded because they were Like wow I mean it's not easy to learn How to manage money we don't have a lot Of resources to do that why don't we Create something to help our generation So they they founded this company called FR and they say it wants to be kind of a Social Financial Community for the Gen Z Population they said that you know right Now with social media there's a lot of

People who are like touting things like On Tik Tok or Instagram about oh I make Money doing this I make so much money Doing that and making it seem like they Live these lavish life Lifestyles and They were like you know this is just not Always realistic they're setting Examples that aren't necessarily Authentic for people we want to help Jers like truly understand how they Compare to their fears peers um Financially so users of FR can get on The app they can ask questions Anonymously they can see what others With similar backgrounds spend on Entertainment investing in rent they can Ask questions like how much are people My age investing do my classmates have Allowances stuff like like that so the Companies raised $2.8 million in a seed Funding round LED by rest of Ventures And looking to grow they said they have Over 100,000 users so far Nationwide I Have a couple of questions one of them Is okay genz users Nation wide is this Like are genz looking for I sound so old Um are genz looking for help with their Finances because they are increasingly Pursuing kind of non-traditional roles That allow them to you know make money Off their Tik toks that's what one Question and then the other question is What is the business model exactly for FR like how how are they making money

Yeah yeah that's a that's a really good Question so at first they started like By advertising but now they partner with A lot of brands that they use to kind of Help educate their users on things so That's that's how they're making money Kind of actually a SAS model where they Kind they charge like a subscription and As for demand yeah I I think this Generation yeah that's a good point They're making money in different ways Right A lot of them are doing things Independently or as creators and also Just in general you know they they might Be like credit card averse too and They're already starting to think at a Young age how can I save how can I be Financially independent and so as one of The co-founders said they just they want To like be able to understand how others Their age are doing and how they're Doing it so yeah so that's so FR you Know they team up with these Financial Brands which they connect to these users To say like hey these are brands that Can help you or do things like I said And that's how they they make money Through this B2B subscription model so Will they like link you to you know Robin Hood or something credit Builder Yeah like a credit Builder here's a Credit Builder that can help you build Your credit right things like that and Does it teach them how to invest and

Things like that as well yeah different All sorts of different brands and so Then they they charge the brands and Those companies a fee I'm interested to See how this works out and there's Another one right there another gen z f Yeah so I also wrote about Fizz and so It was started by two young men and this Company to me also is very interesting There's a lot of unique things about its Model so first of all the two Founders They dropped out of Harvard and Cornell And they were ages 19 and 21 when they Decided to do this to start this company Which like wow okay I okay I'm gonna say Something if I were a parent and my kid Had gotten into one of these schools and Decided to drop out to uh found a Startup I'm I'm GNA have to admit yeah I'd be supportive but i' I'd be a little Bit like sething inside too because I Mean you know wow you get your your kid Gets accepted you're paying all this Money for them to go to these schools And they're like all right now I don't Want to do this anymore but okay now Forget the parenting hat in general I I Do admire um I admire the fact that they Took this risk they took these chances Good for them so far it seems to be Paying off so they built what they Called Fizz it's first start out as this Debit card for uh the younger generation But they they really wanted to make it

So much more than that they wanted it to Be a card that helps them learn how to Build credit and so they incorporated Into it an artificial intelligence based Budgeting product and then they offered Gamified financial literacy courses as Well so that these people also their Target demographic as college students a Fun and interactive way to learn so a Few other interesting things about this Company they decided to build their own Infrastructure from scratch instead of Like what they describe becoming a Patchwork quilt of fintech SAS vendors Which hey also good for them they said They spent about two years building this Infrastructure and also they decided They didn't want to partner with like a Bass provider banking as a service Provider they went to build their own Banking relationship directly with Lead Bank considering what's been going on in Bass I think that seemed like not such a Bad move and now they've raised $14.4 Million in seed funding which was led by Kleiner Perkins they'd gone through the Y combinator summer 2021 cohort YC also Invested in its seed round so they seem To be growing quite a bit they are Available to students at over 300 Campuses in the us right now would this Make them a Neo Bank could they fall Under that category that's a good Question I I wouldn't call them

Necessarily a Neo Bank just yet although They do offer this debit card but that Yeah that's a good question because I Don't I don't think they offer a lot of The other services that traditionally Neo Banks do like savings or you know uh Other things that are associated with Just like traditional banks for example Beyond the debit card but Fizz is Definitely you know its aim is to help These users learn how to build their Credit but I think the good news with Them is they have partnered directly With this bank it's called Lead Bank so I think they're taking very seriously You know the matters of compliance and They're not just like letting someone Else handle that like I said not saying Okay here to a bass provider you take The money and you make sure it gets to Where you know somewhere safe they have Ownership of that in that direct Relationship with the bank so I I feel Like that's where they've addressed that Part of it if that makes Sense yeah no that totally makes sense Yeah and so I you know I applaud these Young people I admire all of them for Just taking these chances and they're All you know it's kind of refreshing Having covered F tick for a while Talking to to these people who really Just are earnest right they seem like They have they have such passion for

What they're doing and I love it I love It very much I think it's awesome and Kleiner Perkins partner Ilia Fishman who Joined ph's board as part of the Financing he said that you know this is A really crucial time and you know this Is when a lot of people get their first Like credit cards and like when they're In college and they become start Becoming financially independent so Instead of offering because I remember When I was in college I think my first Car was like a discover so a lot of These traditional credit cards have Hidden fees High interest rates fiz is Saying no we're going to offer you a Credit line based on your spending Patterns and we're not requiring credit Checks or security deposits things like That so they really want to just kind of Make it easier for these younger people To become financially independent Without getting in over their heads in Debt do we know how many people they Have signed up so far yeah they said Tens of thousands of users so far wow And it's for Gen Z right like can anyone Sign up like you know there's plenty of People who aren't financially literate Who aren't uh who aren't in that age Bracket yeah I'm sure they're not going To turn away anybody who doesn't Necessarily fall into this bracket but That is their Target demographic but

Yeah but I think of if someone who's not Gen Zed said I really you know want to Use this card I I doubt they'd say no Yeah I certainly hope not I would hope Not but on that note we're we're going To have to end the show thank you so Much for joining us Equity will be back On Monday until then you can find me on X Bay Area Rider and Equity under the Handle Equity pod on X and threads don't Forget to check out our sister show Found which Dives deep into the stories Behind startups with the founders who Built them thank you again for joining Us Rebecca it was a blast Hope everyone has a good weekend bye-bye Thanks so much for having me Bye Equity is produced by Teresa Lo cons Solo with editing by Kell Bryce Durban Is our illustrator and we'd like to give A big thanks to our audience development Team and Henry pet who manages Tech Frunch audio products thanks so much for Listening and we'll talk to you next Time

Coinbase
OUR TAKE

Coinbase is a popular cryptocurrency exchange. It makes it easy to buy, sell, and exchange cryptocurrencies like Bitcoin. Coinbase also has a brokerage service that makes it easy to buy Bitcoin as easily as buying stocks through an online broker. However, Coinbase can be expensive due to the fees it charges and its poor customer service.

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