Challenger bank N26 is adding a third subscription product called N26 Smart. N26 Smart is designed to be a mid-tier subscription plan with advanced banking features but without a travel insurance package.
In Europe, in addition to the free plan, N26 already provides two subscription tiers called N26 You and N26 Metal. N26 You costs €9.90 per month and comes with higher limits, such as five free ATM withdrawals instead of three and free withdrawals in foreign currencies.
With an N26 You account, you can create sub-accounts (N26 Spaces), share them with other N26 users or use them to save money. As an N26 You subscriber, you also get a travel insurance package with medical travel insurance, trip and flight insurance and more. You can also access some partner offers.
N26 Metal is the most expensive plan and costs €16.90 per month. In addition to everything in N26 You, you get car rental insurance when you’re abroad and phone insurance. As the name suggests, you also get a metal card.
The new N26 Smart subscription costs €4.90 and works well for people who don’t need travel insurance. With an N26 Smart subscription, you can create up to ten sub-accounts. You get five free ATM withdrawals per month. You can also call N26 support directly in addition to in-app support chat.
N26 is launching a new round-up feature for N26 Smart users. It lets you round each purchase up to the nearest Europe and save it in a separate sub-account. N26 Smart account also access colorful debit cards — the same colors as N26 You.
This is just a first step as N26 plans to revamp its subscription products altogether. In the near future, N26 You will become N26 International. There will be more features focused on borderless banking. N26 Metal will become N26 Unlimited.
As for the free N26 Standard account, the company wants to focus on digital cards. Some users are going to switch to the N26 Smart plan to keep some of the features that they’ve been using with a free account. That move should help the company’s bottom line.
I’ve worked at TechCrunch for a little over a year, but this was one of the hardest weeks on the job so far.
Like many people, I’ve been distracted in recent days. As I write this, I have one eye on my keyboard and another on a TV that sporadically broadcasts election results from battleground states. Despite the background noise, I’m completely impressed with the TechCrunch staff; it takes a great deal of focus and energy to set aside the world’s top news story and concentrate on the work at hand.
Monday feels like a distant memory, so here’s an overview of top Extra Crunch stories from the last five days. These articles are only available to members, but you can use discount code ECFriday to save 20% off a one or two-year subscription. Details here.
B2B marketplaces will be the next billion-dollar e-commerce startups
Marketplaces created for B2B activity are surging in popularity. According to one report, transactions in these venues generated around $680 billion in 2018, but that figure is predicted to reach $3.6 trillion by 2024.
The COVID-19 pandemic is helping startups that innovate in areas like payments, financing, insurance and compliance.
Even so, according to Merritt Hummer, a partner at Bain Capital Ventures, “B2B marketplaces cannot simply remain stagnant, serving as simple transactional platforms.”
The startups that are first to market with innovative “adjacent services will emerge as winners in the next few years,” she advises.
Software companies are reporting a pretty good third quarter
For this morning’s edition of The Exchange, Alex Wilhelm interviewed three executives at cloud and SaaS companies to find out how well Q3 2020 has been treating them:
Ping CFO Raj Dani
JFrog CEO Shlomi Ben Haim
BigCommerce CEO Brent Bellm
As one Twitter commenter noted, Alex doesn’t just talk to the best-known tech execs; he reaches out to a wide range of people, and it shows in the quality of his reporting.
Will new SEC equity crowdfunding rules encourage more founders to pass the hat?
New Regulation Crowdfunding guidelines the SEC released this week allow companies to directly raise up to $5 million each year from individual investors, an increase from the previous limit of $1.07 million.
“Life has gotten easier in other ways as well for founders pursuing this fundraising type and the platforms that seek to simplify it,” reports Lucas Matney, who interviewed Wefunder CEO Nicholas Tommarello.
Funding for seed-stage startups slumped 32% last quarter compared to 2019, so “the tide could be turning” for founders who were reluctant to raise from a giant pool of small dollars, Lucas found.
3 tips for SaaS founders hoping to join the $1 million ARR club
Reaching scale is paramount for software companies, so growth is a top priority.
In a guest post for Extra Crunch, Drift CEO David Cancel explains that too many SaaS and cloud companies waste time trying out a number of solutions before finding the right recipe.
“I can tell you that there absolutely is a repeatable process to building a successful SaaS business,” he says, “one that can reliably guide you to product-market fit and then help you quickly scale.”
Implementing a data-driven approach to guarantee fair, equitable and transparent employee pay
Companies that hope to eliminate longstanding inequities in the workplace can’t just rely on doing what they think is right. Without a data-driven approach, subjective judgments and implicit bias tend to negate good intentions.
Many startups don’t hire full-time HR managers until they’ve reached scale, but this comprehensive post lays out several critical factors for creating — and maintaining — a fair pay model.
4 questions as Airbnb’s IPO looms
News broke this week that Airbnb plans to to raise approximately $3 billion in a public filing that would allow it to reach a valuation in the $30 billion range.
Our expert unicorn wrangler Alex Wilhelm says curious investors should ask themselves the following:
Will Airbnb be able to show a near-term path to profitability?
How high-quality is Airbnb’s revenue after the pandemic?
Is there anything lurking in its recent financings that public investors won’t like?
Will Airbnb be able to show year-over-year revenue gains?
Starling Bank founder Anne Boden says new book ‘isn’t a memoir’
“People at the end of their career write memoirs,” Starling Bank founder Anne Boden told TechCrunch’s Steve O’Hear. “I’m at the beginning.”
In Boden’s new book, “Banking On It,” she shares the story of how (and why) she decided to found a challenger bank, eventually parting with colleagues who launched competitor Monzo.
“This is really putting down on paper where we are at the moment,” she said. “It’s been written over several years, and I’m hoping to use this to inspire a generation of entrepreneurs.”
Pandemic’s impact disproportionately reduced VC funding for female founders
Natasha Mascarenhas and Alex Wilhelm collaborated on Monday’s edition of The Exchange to report on how investors became less likely to fund female founders since the beginning of the COVID-19 pandemic.
Drawing on data from multiple sources, Alex and Natasha found that startups led by women and mixed-gender founding teams received 48% less VC funding in Q3 2020 than in Q2, even though overall funding bounced back.
“From fear in late Q1, to a middling Q2, to a boom in Q3,” they wrote. “It was an impressive comeback. For some.”
Booming edtech M&A activity brings consolidation to a fragmented sector
Natasha Mascarenhas has owned TechCrunch’s edtech beat since she came aboard at the start of 2020, just a few months before the pandemic led to widespread school closures.
She’s reported on countless funding rounds and interviewed founders and investors who are active in the space, but she recently spotted a new trend: “M&A activity is buzzier than usual.”
In Q3 2020, “60% of all capital raised by financial technology startups came from just 25 rounds worth $100 million or more,” he reports.
Are these mega-rounds funding “the next crop of unicorns?” It’s too early to say, but it’s clear that pandemic-fueled uncertainty is driving consumers into the arms of companies like Robinhood, Chime, Lemonade and Root.
In 1,316 words, Alex captures the state of play in insurtech, banking, wealth management and payments investing: “Now, we just want to see some ******* IPOs.”
New GV partner Terri Burns has a simple investment thesis: Gen Z
Five years ago, Terri Burns was a product manager at Twitter. Today, she’s the first Black woman — and the youngest person — to be promoted to partner at Google Ventures.
In a Q&A with Natasha Mascarenhas, Burns talked about her plans for the new role, as well as her investment thesis.
“I don’t know what it actually means to build a sustainable business and venture is a really great way to sort of learn that,” said Burns.
GV General Partner MG Siegler talks portfolio management and fundraising 6 months into the COVID-19 pandemic
Are founders and investors really leaving Silicon Valley for greener pastures? Now that investors are limited to virtual interactions, are they being more hands-on with their portfolio companies?
In an Extra Crunch Live chat hosted by Darrell Etherington, GV General Partner MG Siegler talked about how the pandemic is — and is not — shaping the way he does business.
“I do feel like things are operating in a pretty streamlined manner, or as much as they can be at this point,” he said.
“But, you know, there’s always going to be some more wildcards — like we’re a week away, today, from the U.S. election.”
Thank you very much for reading Extra Crunch; I hope you have a great weekend.
French fintech startup Lydia is going to work with financial API startup Tink for its open banking features in its app. Lydia started as a peer-to-peer payment app and now has 4 million users in Europe.
Lydia’s vision has evolved to become a financial super app that lets you control your bank accounts and access various financial services. In France, you can connect your Lydia account with your bank account using Budget Insight’s Budgea API.
Over the coming weeks, Lydia is going to switch over and use Tink for most clients going forward. If you have a bank account in a small French bank, Lydia might still use Budget Insight for those accounts.
“It’s going to be a progressive rollout and we’ll use the best service depending on our users,” Lydia co-founder and CEO Cyril Chiche told me.
Open banking is a broad concept and covers many different things. In Lydia’s case, we’re talking about two features in particular — account aggregation and payment initiation.
In the app, you can connect your bank accounts and view the most recent transactions. This feature is important if you want to become the go-to financial app on your users’ home screen.
As for payment initiation, as the name suggests, it lets you start a SEPA bank transfer from a third-party service. For instance, you can transfer money from your bank account to your Lydia wallet directly in the Lydia app. You can also move money between multiple bank accounts from Lydia.
Tink provides a single API that manages all the complexities of the information systems of European banks. An API is a programming interface that lets two different services talk and interact with each other. Tink does the heavy lifting and translates each banking API into a predictable API that you can use for all banks.
Since 2018, banks have to provide some kind of API due to Europe’s DSP2 regulation. It’s been a slow start as many French banks still don’t provide a usable API. But it’s slowly evolving.
Tink’s API supports 15 financial institutions in France, including major banks, N26, Revolut and American Express. And it covers a dozen European markets, which is going to be important if Lydia wants to grab more users outside of its home country.
“At first, it’s not going to add new things to the app. But it will allow us to provide features in a very stable environment and at a European scale,” Chiche said.
“We want to have the most uniform product across different markets,” he added later in the conversation.
Pay with your card or with your bank account
When you first install Lydia and want to pay back a friend, you associate your debit card with your Lydia account. The startup charges your card before sending money to your friend.
If open banking APIs become the norm, you could imagine grabbing money from someone’s bank account directly instead of paying card processing fees. But this sort of features is nowhere near ready for prime time.
“What made us choose card payments is that it’s a stable system with widespread usage — and it works every time. When you’re dealing with payments, it has to work every single time,” Chiche said.
Lydia isn’t changing anything on this front for now. But you could imagine some changes in a few years. “We are the beginning of a new system that is not going to be ready within the next 18 months,” Chiche said.
Cards also provide many advantages, such as the ability to chargeback a card. And card schemes have been trying new things, such as the ability to transfer money directly from a card to another card. So you’re not going to ditch your Mastercard or Visa card anytime soon. But Chiche thinks there will be some competition in Europe between DSP2-ready banks and card schemes. European consumers should see the benefits of increased competition.
In other news, Lydia usage dropped quite drastically during the full lockdown earlier this year. But transaction volume has bounced back since then and reached all-time highs. The company processes €250 million in transactions every month and it is currently adding 5,000 new users every day.
