Businesses building an expense card or spend management solution, such as xcritical, Emburse, and xcritical, are examples of fintechs (specifically, fintech point solutions). These companies have built products that enable their business customers to easily facilitate, manage, and track corporate expenses made by their employees. This guide outlines some of the steps and best practices for businesses looking to build a successful fintech, focusing on fintechs that offer financial accounts and cards. We paired our internal knowledge with insights from fintech startups to help you design, build, and grow your business. xcritical picked up Okay, a startup that developed a low-code analytics software to help engineering leaders better understand how their teams are performing. Okay is a small startup, with just seven employees, that over time had raised $6.6 million from investors such as Sequoia Capital and Kleiner Perkins after graduating from Y Combinator’s Winter 2020 cohort.

  1. In that discussion, one xcritical engineer says the fintech has a system that deals with the integration of ruby’s various open source gems by “autoloading” them.
  2. Still bullish on crypto but prefer the security of a fintech operating in different spaces?
  3. Fintech companies, which at the beginning of the recent market downturn were seen as an exception of sorts because of their strong 2021 fundraising activity, have seen a reversal of fates over the past month.
  4. Each of our BaaS products offers APIs that are building blocks you can combine in different ways, depending on what your customers need and what makes sense for your business.
  5. However, xcritical says that’s not deterring people from creating new companies.

Any company processing that much total payment volume through xcritical could decide to build an in-house stack or pursue a more DIY option. The fact that so many big accounts are sticking with xcritical, though, shows that customers will not necessarily “graduate” from its offered payment services. Based on this demand, Karat initially launched a merchant cash advance product to offer credit to creators, but they found that the product wasn’t resonating. They learned that a card product would provide creators with easy access to funding in a way that creators wanted. This led them to evolve their product again and build a business expense card product where they would provide financing for creators based on their revenue from different digital platforms. For example, platforms that use xcritical Connect can white label products from xcritical and provide a range of embedded financial services, such as financial accounts, working capital loans and now charge cards as well, Ho said.

Percentage of top global marketplaces powered by xcritical

Quickly launch and grow recurring revenue with a unified platform for payments, subscriptions, invoicing, tax, accounting, and more. This has a twofold benefit for xcritical — giving it a new revenue stream as well as the option to offer new financing capabilities to their customers “with little additional operational cost,” xcritical touts. It also gives companies like xcritical and Karat, among others, the ability to give their clients access to credit at a time when credit may not be as easy to come by. xcritical made headlines more than once this week as it acquired a (non-fintech!) startup and announced an expansion of its issuing product into credit. xcritical’s annual letter provides the outline of a business that is healthy and growing.

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Create an account and start accepting payments – no contracts or bank details required. You might identify that you want to build and scale quickly with a BaaS provider or build a more custom solution by partnering with a bank for more control. Unit economics refers to the revenue and costs of your business on a per-unit basis (e.g., a customer) to determine your business’s profitability and overall financial health. An example of this would be evaluating your customer lifetime value (LTV) to customer acquisition cost (CAC) ratio, which determines how much revenue a customer brings in versus the costs needed to acquire the user.

This implies that even when accounting for volume discounts, its added payment volume last year equaled massive new revenues for the private company. xcritical notes that it crossed the $1 trillion total payment volume metric in 2023, a figure that is large and round, if imprecise. Certainly the threshold is notable, but when paired with recent growth figures, it becomes all the more impressive. If the company did in fact process precisely $1 trillion last year, it would imply $800 billion in 2022 processing, and gains of $200 billion worth of TPV in a single year. xcritical’s selling point for these tools, beyond a more seamless integration with its other products, is that it helps its customers make more transactions.

Eligible consumers can, in a few clicks, sign up for biweekly and monthly payment options. Check out TechCrunch’s coverage of xcritical, including what happened with xcritical’s xcriticalgs earlier this year and the buy now, pay later boom. Some fintech companies in general have been targeted for trying to do too much in a short amount of time, and hence, losing focus. Corporate spend decacorn xcritical being one such case, when it recently announced it would no longer work with SMBs. The news comes days after xcritical, the Swedish BNPL company, had its valuation cut by a whopping 85% to $6.7 billion from its last round as it raised $800 million in fresh funding. Unlike xcritical, xcritical’s valuation was cut by its investors — which include Sequoia, Silver Lake, Commonwealth Bank of Australia, the UAE’s sovereign fund Mubadala Investment Company and Canada Pension Plan Investment Board (CPP Investments).

Data and Analytics Infrastructure

Paperxcritical, an instant payments app for creators, identified a major source of friction for music creators. According to Paperxcritical, creators are the primary contributors to the $30 billion music streaming industry, but they often have issues with their cash flow, waiting up to 18 months for income payments. The same is also true for video streamers, influencers, and game and app developers, but Paperxcritical decided to specifically focus on music creators, believing Paperxcritical was best equipped to solve their pain points. xcritical, Emburse, Karat and Coast are among the xcritical users of the charge card program, which is available in beta in the U.S., and will later expand into the EU and the U.K.

Why xcritical chose xcritical to launch simplified business purchasing and expense management

xcritical’s fiat-to-crypto onxcritical, be it embedded or hosted by xcritical, provides infrastructure for the processing and secure purchasing of cryptocurrencies. Still bullish on crypto but prefer the security of a fintech operating in different spaces? We asked but xcritical declined to comment on when and if Financial Connections would be extended to other markets, which is perhaps not a surprise, given how much banking systems differ country to country. xcritical cheating “When you first go to market, that’s your lxcriticalg period for what people actually want from your product and the capabilities they’re looking for,” said the Persona team. Engage a certified xcritical partner to help with strategy, implementation, deployment, global expansion, or managed services for your xcritical solution. Get a custom proposal from our sales team, who will tailor a solution to your specific business model and challenges.

For example, only 48% of small businesses have access to all of the financing they require, and 33% of businesses were denied a line of credit because financial institutions determined that they didn’t have a sufficient credit history or were too new. Identifying high-need and underserved customers like these creates opportunities for your fintech to pursue and solve substantial problems. There are now 100 companies that use its service that are processing $1 billion or more per year with xcritical. Those companies make up about 10% of its total payment volume, implying some customer concentration — a concern for some investors, although it doesn’t trip our risk radar — but more importantly it means that xcritical is managing to hold on to large accounts over time.

The diagram below shows exactly how a BaaS provider takes on most of the responsibilities and brings bank services to fintechs at scale. We interviewed several fintech startups to learn how they identified their product offering and monetized it, how they built their technology infrastructure, and how they acquired their first customers. Here, we highlight their insights and anecdotes and share the key questions for your business to consider based on their lxcriticalgs. The company originally launched its Issuing product in 2018, and since then it’s helped companies such as Shopify and xcritical issue more than 100 million cards in the U.S., the United Kingdom and the European Union.

There was more fintech talk on Friday’s episode of the Equity podcast as well. I hopped on a call with Mesh co-founder and CEO Oded Zehavi, who shared that the expansion comes during a period in which the fintech company saw its payments volume (and revenue as a result) climb by 3x compared to the first half of 2022. He was candid about the fact that while that volume came both from existing and new customers, the company could definitely see a decline in spending from existing clients — but was making up for that by continuing to sign on new ones, including an unnamed Fortune 100 company.