Fintech First Users: How 22 Fintech Startups Got Their First Users

Every startup faces the challenge of acquiring its first users after the completion of an MVP.

For fintechs founded by established industry players, reaching out to existing industry contacts can be enough, but most fintech startups need a more aggressive launch plan. This is especially true in fintech, which has an unusually high cost of customer acquisition when compared to other industries like consumer internet. 

However, unless a fintech founder is solving a predefined problem established by years of industry experience, the need for early user feedback and iteration is no less than in other sectors with lower customer acquisition costs, which makes learning from the successes and failures of other founders especially important. 

This resource explains how some of the most successful fintech startups got their start.

COMPANIES

Brex

Brex, an American fintech based in San Francisco, provides business credit cards and cash management accounts to tech companies. Brex cards are business credit cards that are not linked to personal credit or assets. To qualify, a company must have at least $100,000 in its bank account or monthly revenue. 

Henrique Dubugras and Pedro Franceschi, both Brazilian nationals, founded the company in 2017 after selling online payments company Pagar.me to Stone. It launched in June 2018 after a year-long private beta. 

To maximize exposure during the launch, the founders deliberately held back public information. 

This stealth strategy made it difficult to hire employees or negotiate partnerships, but gave Brex the benefit of concentrated press and word-of-mouth during the launch. 

For the launch, Brex used an embargo strategy. Dubugras met in person with ten reporters in San Francisco and New York. The reporters agreed to break the Brex launch at an agreed-upon time, coordinated with Brex’s press release. 

A Head of Growth team member managed the launch, but Dubugras acted as spokesperson. 

Brex set targets for both page views and product sign-ups. Brex set a goal of 50,000 page views and a 1% conversion rate. 

Brex only got 30,000 pageviews during the launch but achieved a 2.5% conversion rate and beat its signup target.

Brex logo

Marqeta

Marqeta is a card issuing platform that enables companies to build and manage payment programs. Customers include Uber, alt lender Capital on Tap, Swedish “buy now, pay later” firm Klarna, and Swiss challenger bank Yappeal. 

Marqeta founder Jason Gardner launched the company with a relatively simple product — a flexible loyalty card. 

This card attracted a major tech customer, which gave Marqeta the traction to raise additional capital and scale its gift card program. 

Marqeta made its modern card issuing platform available via open APIs in 2014. Some of the most innovative companies have since built card programs on its platform, including DoorDash, Instacart, and Klarna.

Marqeta logo

Lively

Lively is a Health Savings Account (HSA) platform for employers and individuals. Although HSAs have existed since 2004, Lively founders Alex Cyriac and Shobin Uralil saw an opportunity to bring a more user-centric approach to HSA accounts to match the higher expectations consumers now have about mobile and web products. 

Lively launched in March 2017, but did not pursue user acquisition until September 2017. Other than market research and a hunch that users would respond to superior UX and a more frictionless experience, the company lacked much information about its customer base, so it prioritized active testing and a bundled marketing approach to identify early adopters. 

Financial review sites and vertical sites, like HSASearch.com, were very significant for Lively’s founders in the early months. The founders visited websites where consumers were talking about HSA experiences with competitors, allowing them to enter active conversations to drive awareness and engagement for Lively. 

By engaging with the most vocal and flexible consumers, Lively acquired some early adopters, who noticed how different it was from the incumbents. Those early adopters shared those experiences on review and vertical sites, driving further adoption. The differentiated user-centric, modern experience prevented churn and kept the cycle of word-of-mouth spreading. 

Once the loop of early adopters and word-of-mouth got going, Lively added fuel to the fire with aggressive PR and SEO campaigns. 

These campaigns accelerated user growth and also moved the conversations from specialized vertical sites to more mainstream publications with wider reach. 

One factor preventing growth is that the HSA is not a mainstream offering, but focusing on customer experience and building relationships with consumers has kept the flow of word-of-mouth going. 

Once these organic channels were working, Lively scaled its user acquisition with paid media — especially SEM — to maximize reach.

Lively logo

Nova Credit

Nova Credit is a cross-border credit bureau founded in 2016 by Misha Esipov, Nicky Goulimis, and Loek Janssen. The founders were immigrants to the United States who had firsthand experience with the challenges that face newcomers who lose their credit history when immigrating to the U.S. 

Lack of U.S. credit history can interfere with accomplishing basic tasks like renting an apartment, getting a cell phone plan, credit card, or student loan. Even if someone has extensive credit in their home country, immigrants are “credit invisible” upon arriving in the U.S., and building their credit history back can take years. 

Nova Credit helps newcomers apply for products and services in the U.S. using their international credit history from countries including Australia, Brazil, Canada, India, Mexico, Nigeria, South Korea, and the UK. They do this through a unique scoring and reporting format, called a Credit Passport. 

A Credit Passport report contains a FICO-equivalent score from the immigrant’s home country, tradelines, and inquiry history. Packaging this information allows recent arrivals to the U.S. to demonstrate their creditworthiness to lenders. 

Using the Credit Passport, American Express and other partners like MPower and Yardi can seamlessly underwrite qualifying newcomers without a U.S. credit score. 

Nova Credit’s partnership with American Express — its first enterprise customer — started with a cold LinkedIn message from COO Nicky Goulimis in the winter of 2016. 

The Nova Credit value proposition resonated with American Express’ focus on delivering a seamless, global experience to its cardmembers. An American Express credit risk leader championed the project internally. 

In 2017, American Express and Nova Credit worked together to refine their offering before launching a pilot in 2018 last year. Nova Credit announced a full launch in October 2019; the industry-first digital integration offers newcomers from five countries the ability to instantly and securely share their credit history during the online card application process.

Nova Credit logo

Plaid

Plaid was founded in 2012 by Bain consultants William Hockey and Zachary Perret. Plaid acts as plumbing that allows apps to connect to users’ banks to confirm account holders. It can integrate apps with bank accounts without the paperwork or penny deposits formerly required for verification, allowing immediate use of the apps. 

Plaid’s API can verify users with just a bank customer’s online username and password and is used by startups like Coinbase, Betterment, and Acorns. 

It helps fintech startups because they don’t need to spend time and money building connections and getting them approved by slow-moving banks. It also accelerates user growth because uploading PDFs or requiring micro-transactions depresses sign-up rates. 

Plaid works with approximately 10,000 banks and remains one of the world’s preeminent fintech startups — an acquisition deal with Visa was recently killed on antitrust grounds. 

Perret and Hockey initially built a financial planning tool that never got traction. While building the tool, they figured out how to connect the app to their bank accounts. 

Launching the company in New York in 2012, Perret and Hockey stumbled into conversations with Venmo’s engineering chief, who used Plaid’s technology to reduce the risk of allowing instant peer-to-peer money transfer. 

Venmo does this by settling transfers in large batches. Venmo customers can send money instantly, but the actual payment is delayed a day behind the scenes. Venmo used Plaid to know that the sender had enough money in their bank account, reducing risk. 

Their relationship with Venmo gave them credibility among other fintechs that sought to replicate Venmo’s success — some of which became household names. 

Even with these early customers, Plaid still struggled to raise money from Silicon Valley VCs. They eventually convinced Spark Capital to lead a $2.9 million seed round in July 2013, and they’ve been on a steady growth trajectory since.

Plaid logo

Unison

Unison is a home co-investing platform that allows institutional investors to access residential real estate, the world’s largest asset class, without the management headaches of owning and operating large numbers of individual houses. 

For homeowners: Unison offers homeowners a way to convert equity in their home into cash without adding debt. 

Unison converts up to 17.5% of a home’s value to cash, without interest, monthly payments, or the risk associated with added debt. In return, Unison shares in a portion of the home’s value when it is sold. 

Founder Thomas Sponholtz got the idea for Unison while managing a portfolio at Barclays Global Investors, then the world’s largest institutional investment management firm. 

Sponholtz managed about $120 billion for global pension funds, endowments, and private wealth funds. Warren Buffett has said the enemy of high returns is a fat wallet, and moving the needle with such a large portfolio was challenging. 

Sponholtz noticed that investors sitting on the biggest pool of investable cash in the world lacked exposure to the world’s largest asset class — residential real estate. 

Institutional investors couldn’t get exposure to residential real estate. To buy the hundreds of thousands or millions of homes for a portfolio would require a massive management infrastructure. The cost of that infrastructure would be much higher than any investment return from owning the real estate. 

In the United States, 132 million homeowners own about $30 trillion worth of residential real estate, and $18 trillion of that value is equity. That equity is illiquid for the homeowner. Making that liquid gives the homeowner greater optionality to do things like pay bills, renovate the house, send kids to private schools, or whatever. 

By converting that equity to cash in a way that provided equity returns for investors, Sponholtz saw a way to unlock not just the biggest piece of the net worth for each individual, but also the biggest locked piece of the economy as a whole.

The next year, when Sponhotz made his annual trip to visit Barclays’ largest investors, his clients asked the same typical question: “What’s the new interesting thing that’s going on that you guys have seen?” 

Sponholtz brought the idea for Unison up to the clients and asked for their opinion. 

Their feedback was more than just positive — they wanted to know how they could get this exposure. 

According to Sponholtz: 

“They all said, ‘Ah. It’s the biggest in the world. We want it. What can we do?’ And that became: ‘You know, you should go do this – here’s some money to go start the company.’ So after a year, I decided to take this flyer and start the company.”

Unison logo

Starling Bank

Founded by Welsh banker Anne Boden in 2014, Starling Bank is the fastest-growing bank in the United Kingdom with 1.5 million retail customers, 150,000 small business customers, and over 900 employees. Based on the founding thesis that technology had changed every major industry except banking, Starling was named the Best British Bank in the British Bank Awards in 2018, 2019, and 2020. 

When Starling first launched its app in app stores in 2017, it had a small budget, and most of the marketing was done through digital marketing/paid social and, of course, press coverage. 

However, from the beginning, there was an early emphasis on live events. 

Starling then started going to highly populated live events, where we thought the demographic would be interested in Starling. These included Stylist Live, Taste London, the Goodwood Festival of Speed, and BBC Countryfile Live. 

Starling also did a travel show, a wedding show, a parent and baby show, and many tech festivals, conferences, and events, including one organized by Dream Nation. Starling also sponsored a gig organized by NME, in a bid to attract social media influencers. Unfortunately, this wasn’t a hit. 

Starling sent the marketing team to these events and sought volunteers from other parts of the business, including senior executives and the CEO. 

They gave out information about Starling and their now-famous and much-coveted Starling socks, which became a staple in London’s fintech scene. 

Starling used these events not just to push Starling, but also to talk to people about who they bank with and why — and what it would take to persuade them to switch banks. 

They then launched an OOH (out of home advertising) advertising campaign in a handful of key cities. 

Only later did they go in for TV and radio ads and posters on the London Underground.

Less than four years later, Starling has opened more than two million accounts.

Starling Bank logo

GoCardless

GoCardless was founded in 2011 and operates a global bank debit network that allows customers to take invoices, subscriptions, membership, and installment payments without requiring credit or debit cards (which can expire and have other issues that inhibit cashflow for merchants). 

As of late 2019, GoCardless processes $13 billion in transactions per year, with 50,000 customers, including DocuSign, The Guardian, and TripAdvisor. 

Like many other B2B fintech startups, GoCardless grew initially through word-of-mouth and partnerships. In an interview on the blog of Balderton Capital, one GoCardless’s investors and a leading investor in European fintech startups, co-founder Hiroki Takeuchi said: 

“We were quite lucky in that we had tapped into this market where there was a huge amount of demand. However, we had built some partnerships that were really effective and that was the predominant way that we were growing.”

The added pressure to grow post-series-A is when GoCardless focused on acquiring customers more proactively, growing a sales team, and developing a cohesive go-to-market strategy.

GoCardless logo

Pockit

Pockit was founded in 2014 to focus on financially underserved, low-income, and unbanked consumers in the UK: those left behind by high street banks. 

CEO and founder Virraj Jatania grew up in Nigeria, re-boom Dubai, Yeltsin-era Russia, and India, and repeatedly witnessed the inefficiencies of cash-based economies — hence his eventual idea for Pockit.

Pockit provides a current account, international money transfers, and other products to help customers build their credit scores and assume greater control and understanding of their financial affairs. Pockit currently has over half a million customers in the UK.

Pockit launched its first iPhone app and contactless card in 2015. By 2016, Pockit had 50,000 customers, launched its Android app, and begun offering a complete digital UK current account. 

By 2017, Pockit had reached 100,000 customers.

Around 50 percent of new Pockit customers come through word of mouth.

Further growth comes through partnerships with recruitment firms that typically put workers into distribution warehouses or large construction sites. 

The growth of organic customer acquisition is now a big focus for Pockit. Their recently announced partnership with Transferwise and the successful crowdfunding campaign in December 2020 are examples of initiatives driving this critical element of its growth strategy.

Pockit logo

SumUp

SumUp initially launched having identified a particular problem for small merchants, from independent shopkeepers to window cleaners. These businesses were prevented from taking credit and debit card payments by the cost of payment hardware, service fees, and the clunky immobility of traditional point-of-sale readers. 

SumUp built its own payment solution end-to-end and designed its own devices to overcome these hurdles and make payments accessible to all. 

Its first customers were a sportswear store, a juice bar, a media agency, and a hardware store – and quickly expanded from there to cafes, bars, taxi drivers, and a whole variety of businesses. 

SumUp now serves over 3 million merchants. 

As is typical for businesses targeting small and medium-sized business customers, SumUp’s initial customer acquisition was driven by salespeople contacting companies directly and demonstrating the benefits of the technology. 

Once word started to spread, SumUp had a number of direct registrations from people actively searching for this solution for their business.

SumUp logo

Alipay

Alipay is a third-party mobile and online payment platform. It has been the world’s largest mobile payments platform since overtaking PayPal in 2013. Alibaba Group founded Alipay as a separate entity in Hangzhou, China, in 2004. 

As of Q4 2018, Alipay held 55.32% of the third-party payment market in mainland China and continued to grow. 

Alipay grew out of Taobao, the Chinese auction site launched by Alibaba. Taobao added a “Guaranteed Transaction” function on its site in 2003. Jiao Zhenzhong, an undergraduate at the Xi’an Institute of Technology, wanted to buy a $110 second-hand Fujifilm camera listed by Cui Weiping, a college student in Japan. 

Although the buyer and seller agreed on a price, the mechanics of the online transaction had not been worked out. Would Jiao send the money before Cui shipped the product? 

At an impasse, Jiao clicked on the “Guaranteed Transaction” function, which required him to transfer the money to Taobao’s finance department. Taobao would confirm that Jiao received the camera before releasing payment to Cui. 

Jiao initially panicked and canceled the transaction, but a Taobao employee called Jiao and offered to guarantee the transaction personally with her own salary. Jiao agreed, and the transaction went through. 

From there, much like the growth of PayPal within the eBay ecosystem, the organic growth of Alipay was natural, given the growth of Alibaba’s auction business.

Alipay logo

Metromile

Based in San Francisco, Metromile is a car insurance startup that provides pay-per-mile car insurance — a form of usage-based insurance. 

Instead of a flat rate, the driver pays a base rate plus a fixed rate per mile. This model benefits low-mileage drivers (those who drive less than 30 miles per day). 

Metromile launched an “alpha” and “beta” in 2012. 

Metromile launched in Oregon and then California, Illinois, and Washington, focusing on environmentalists looking to drive less, millennials who relied on public transportation and ride-sharing, tech-savvy drivers, and retirees.

To acquire users, Metromile gave the Metronome device — the precursor to its current in-car sensor called the Pulse device — away on the Metromile website.

The giveaway (announced in a 2013 press release) was intended to make consumers aware of how technology can leverage the data available to improve the driving and car-owner experience. Metromile provided all of the smart driving features for free.

These smart driving features included a “smart commuting” feature, similar to how Waze works today. It learned about a driver’s daily commute and let them know the best time to leave to avoid traffic. 

Another popular feature was the gas optimization tool, which compared their actual usage to the car factory-rated miles per gallon.

Metromile logo

HMBradley

HMBradley is a challenger bank that offers interest rates to depositors that vary based on their financial behavior, paying up to 3% interest to customers that save at least 20% of their income each month. 

Unlike many challenger banks that focus on offering lower fees or advancing paychecks early, HMBradley focuses on a traditional banking business model of loans and deposits. In addition, instead of relying on partners to handle payment processing, HMBradley has its own tech infrastructure, which presents service outages that customers of some online banks have suffered. 

Although the banking industry is crowded, with many traditional and challenger banks competing for depositors, the offer of a 3% interest rate on deposits was so unique that it generated significant interest.

The backing by Max Levchin and high-profile board and executive team members that includes veterans of Goldman Sachs, CapitalOne, and USAA, also helped HMBradley get press attention.

HMBradley logo

TradingView

TradingView is a social network for independent traders and investors based in London. It started in Chicago in 2010, went through TechStars in 2013, and now has over 15 million monthly active site users, with more than 40,000 publishers, fintechs, and brokerages using its tools. 

TradingView launched its website in 2010 and gathered initial “power users” by chatting 1-on-1 with traders in Chicago. Many traders in Chicago needed quick/clean charting and data, and TradingView was the first to provide that for free. 

User growth built momentum through word of mouth, spreading among the Chicago trader community and then to Europe, with traders on the Deutsche Börse and London Stock Exchange using the platform as well. 

Off the back of that initial traction, influential financial blogger Barry Ritholtz wrote an article about TradingView in 2011. TradingView saw nearly 10,000 users visit the site thanks to that initial write-up.

TradingView logo

OakNorth

OakNorth Bank, launched in September 2015, provides fast, flexible, and accessible debt finance (from £500k to £45m) to fast-growth businesses.

Unlike many alt lenders that focus on business lending, OakNorth Bank is not focused on sole proprietors. Instead, it is focused on businesses that have traction and are looking to scale.

While there has been innovation in lending to micro-businesses using the internet, growth-stage companies had not benefited much from those innovations, which is where OakNorth Bank stepped in.

The lender is capitalizing on an underserved niche. After decades of consolidation in the banking industry, growth-stage businesses have difficulty borrowing from commercial banks.

Even when growth companies show profits, with strong cash flow and client retention, the potential return for the bank is too small to justify underwriting the deal.

OakNorth Bank can do this because of the Credit Intelligence software its sister business has developed, which brings down the cost of underwriting loans to growth-stage businesses. The software gives banks a forward-looking view of borrowers based on expansive and dynamic data sets and scenarios specific to that business. OakNorth Bank leverages the software, and it is also being licensed to other banks around the world, including SMBC, ABN Amro, Capital One, PNC, and Fifth Third.

The idea to develop software to support lending to growth-stage companies came from the experience of OakNorth’s co-founders, Rishi Khosla and Joel Perlman, who were looking for a working capital facility for their growing business, Copal Partners, in 2005. The pair had founded the financial research firm three years previously, and although they showed strong cash flow and retained clients, no commercial bank would lend to them.

After selling Copal Partners to Moody’s in 2014, Khosla and Perlman decided to address the funding gap, first proving their model within their own UK bank, OakNorth Bank, before licensing their Credit Intelligence software to other banks.

When OakNorth Bank first launched in the UK, it didn’t have an advertising budget, so it established itself through cold outreach. The team reached out to every business owner, accountant, lawyer, broker, etc. they knew and explained how the new bank was creating a better borrowing experience for businesses and that there are a few things that make them different:

  • Speed – OakNorth Bank aims to complete a transaction in days or weeks, versus the months it takes at high-street banks.
  • Transparency – Borrowers get the chance to meet the Credit Committee and discuss their borrowing needs directly with the decision-makers.
  • Flexibility – OakNorth Bank will take the time to understand a business so they can design a bespoke facility for the business’s needs).
  • Entrepreneurial – OakNorth Bank was founded by entrepreneurs rather than bankers, so they have designed their approach with the entrepreneur in mind.

When you are giving away money to an underserved niche, it is easy to grow quickly. The question is doing so without suffering losses. Although OakNorth Bank has recently been in the news for defaults, it has only had ten cumulative defaults since inception – seven of which have been repaid in full.

Oaknorth logo

Funding Societies

Funding Societies is a peer-to-peer financing platform that connects small- to medium-sized businesses with debt financing. It operates in Singapore, Malaysia, and Indonesia (where it’s known as Modaiku) and is Southeast Asia’s largest peer-to-peer lending platform. Today, Funding Societies is the largest SME digital financing platform in Southeast Asia, with a regional team strength of over 350 employees. The platform has disbursed over S$1.9 billion to over 3.5 million SME loans.

Funding Societies began in 2014 when Kelvin Teo and Reynold Wijaya met at Harvard Business School and discovered their shared interest in peer-to-peer (P2P) lending. They decided to bring the idea back to their home countries in Southeast Asia, where they sought to address the region’s SME funding gap. 

Kelvin and Reynold were surprised by the deep interest they received from investors but were unprepared to quit Harvard. They studied in the morning and worked at night to cope with the time difference between Cambridge and Singapore, where their investors were based. When the pair incorporated Funding Societies Pte Ltd in Singapore in February 2015, they expanded into a small team of 3. 

As a two-sided P2P platform that serves both SME clients and retail investors, Funding Societies has had to acquire both business customers and retail investors as users. The company has been successful in doing so: Funding Societies has crowdfunded S$1.96 billion as of January 2021. Other than an SME-focused marketing and sales team to reach out to potential clients, the company partners with grant advisors, corporate secretaries, consultants, insurance agents, loan brokers, and accountants for client referral. Furthermore, Funding Societies has helped many retail investors, be it industries or individuals, to grow their portfolios. The fintech provides a seamless investor experience through a mobile app to allow investors to view their portfolio at any time, as well as an Auto-Invest feature.

With an investor-focused marketing strategy, Funding Societies attracts more retail investors onto the platform by lowering barriers to entry, as investments start as low as S$20. The platform also offers a comprehensive range of investment products for investors to choose from, from guaranteed to asset-backed products.

As with many fintechs, key early partnerships with incumbents were crucial to establishing traction. In October 2015, Kelvin and Reynold pitched their business to the largest bank in Singapore – DBS Group Holdings. Three hours later, the CEO sent his reply: Interested. 

Funding Societies secured a partnership with DBS Bank in April 2016, making it the first tie-up between a P2P lending platform and an established bank.

With much traction in Singapore, the co-founders then decided to break into the Indonesian market, going by the name “Modalku,” which translates to “My Capital” in Bahasa. Modalku is regulated by the country’s financial services authority, Otoritas Jasa Keuangan (OJK). In the same year of its launch in 2016, the company secured a successful partnership with Bank Sinarmas, part of the biggest conglomerate in Indonesia. Funding Societies also raised S$10 million, led by Sequoia India.

In the following year, Funding Societies started operations in Malaysia, being the first P2P lending platform to launch in the country and one of the six such platforms licensed and regulated by the Securities Commission (SC). It also became the first and only P2P lending company to attain membership at the International Association of Credit Portfolio Managers, a prestigious forum for credit risk management.

Funding Societies logo

GoHenry

Debit card and smart money app GoHenry was founded in 2012 to help children and teens learn how to be good with money. It combines web and mobile apps with a debit card with parental controls, so kids and teens gain experience managing money with guardrails.

GoHenry now has nearly 2 million customers across the US and UK.

Since GoHenry was the first service of its kind, getting initial users required a degree of education and iteration. Its first one hundred customers were part of an extended beta trial for many months before the official launch.

As the first to market, GoHenry had no “best practices” to follow and no one to emulate. The founders chose to launch with a subscription model modeled on Netflix, which was unique to financial services at the time.

After customers validated that this model was valuable, GoHenry tested many different routes to market. Word of mouth and organic growth worked well and are still major growth drivers.

On top of this, Facebook ads and PR were strong growth channels early on.

Lastly, equity crowdfunding campaigns also helped the company grow — while allowing customers to share in the company’s success.

GoHenry has raised $70 million since its launch, of which $30m came from friends and family, angel investors, and equity crowdfunding. Of GoHenry’s approximately 5,000 shareholders, half are GoHenry customers.

GoHenry logo

OurCrowd

OurCrowd is a global venture investing platform that allows institutions and individuals to invest and engage in emerging companies.

The Israeli fintech aims to democratize access to the venture capital asset class.

With the expansion of the venture capital asset class (and with Sarbanes-Oxley making going public especially onerous), many companies are delaying their IPOs until they are valued in the billions of dollars.

Since many growth companies delay going public until they are fairly mature, access to growth companies is primarily restricted to those who can meet the $1 million or more investment minimums of traditional VC funds. By lowering the minimum investment to $50,000, OurCrowd allows the “mass affluent” to invest in technology companies while they are still growing quickly.

According to CEO Jon Medved:

“OurCrowd started close to home, literally with friends and family from our Jerusalem base. Our first customers came from my own Outlook contacts and social network. We built the equivalent of an ‘investor social network,’ taking angel investors, successful entrepreneurs, and corporate executives, and gathering them into a crowd. We then gave that crowd access to invest in a select group of promising tech companies.

Through negotiating deals with the startups, building a team to properly structure and diligence the deals, and then offering the deals to this group of investors, we were able to reach critical mass and start building OurCrowd.”

As of January 2021, investors have committed $1.5 billion to OurCrowd, for over 250 portfolio companies and twenty-three different funds.

OurCrowd logo

Nubank

Nubank is a Brazilian digital bank based in Sao Paulo, founded by Colombian-American entrepreneur and former Sequoia executive David Vélez in 2013. 

It began as a credit card and has since expanded into a full-service digital bank, offering digital accounts, loans, business accounts, insurance, and rewards programs to customers in Brazil, Mexico, Argentina, and Colombia. 

Nubank has raised $1.5 billion to date from investors, including Sequoia Capital, Kaszek Ventures, Redpoint, and Goldman Sachs, and signed up almost 20 million customers.

As a fully digital bank, Nubank passes the savings from not having bank branches to its customers, offering no-fee accounts and credit cards.

Vélez founded the bank based on his dissatisfaction with the experience of getting a bank account in Sao Paulo, Brazil.

Since five banks control 90% of Brazil’s banking sector, fees are high — often $30/month — and there is little incentive to provide good customer service. 

To open his account, Vélez went through a security line with three armed guards while checking his bag in a locker outside. To finish setting up the account took four months and 5-6x visits to the branch.

Nubank acquired its first customers through its credit card product. In a country where banking is difficult, simplifying the sign-up process was enough to get traction. To get started with Nubank, customers simply download the app, take photos of their documents, and answer a series of questions.

To limit losses in a country with inconsistent credit bureau coverage, Nubank starts with very low credit limits — often $10 — on new customers. 

Based on customer behavior — repayment patterns, but also how they spend money — Nubank will gradually increase credit lines.

Since the easy sign-up process and no-fee model were unique in Brazil, the company grew 90% through referrals, with no initial spend on traditional marketing. This referral-based customer acquisition model also allowed Nubank to use referral trees to assess credit limits.

Vélez explains, “Good customers tend to invite other good customers. Risky customers tend to invite other risky customers.”

Nubank logo

Bitso

Bitso is a cryptocurrency exchange platform based in Mexico City. Users can use smartphones and other devices to buy and sell bitcoin and other cryptocurrencies. 

Bitso was founded in 2013 as a point-of-sales product to help Vancouver businesses accept bitcoin payments. 

The founders quickly moved the firm to Mexico to address gaps in the financial services industry. Less than half of Mexico’s population has a bank account, according to research by IT firm Tecnocom. 

Additionally, there was no way for Mexicans to transact using bitcoin since they couldn’t buy and sell bitcoin safely. This is how Bitso found its current business model.

Now based in Mexico City, Bitso is one of the most valuable tech startups in Latin America, reaching a $2.2 billion valuation following a Series C equity round earlier this year. 

The first transaction on Bitso was between two founders, Ben Peters and Daniel Vogel, who exchanged 0.05 bitcoins for 5,948.00 Mexican pesos. 

According to Daniel, “That same day we had our first customer, who, after a few months, became the first member of our team.”

The next day, the Bitso team woke up with 300 customers.

Acquiring initial customers did not require much clever marketing or growth hacking. Bitso’s technology was positioned to capitalize on the organic growth of cryptocurrencies in Latin America.

The difficulties were not in generating demand but in scaling to service that demand.

Bitso has done that successfully over the past seven years. It is now a global platform that operates in Mexico, Argentina, and Brazil and serves 1.4 million customers. Bitso plans to continue its expansion in Latin America.

Bitso logo

Everledger

Founded in 2015, Everledger uses blockchain and IoT technology to bring transparency to supply chains. 

Critical applications include fighting counterfeiting and backstopping claims to environmental sustainability and social responsibility. 

Founder Leanne Kemp started the company to address supply chain issues in the notoriously opaque diamond trade. 

Kemp explains that while the 2006 film Blood Diamond brought global attention to conflict diamonds, there remained “a lack of clarity in diamond documentation,” which remained paper-based.

Adopting an electronic system would help address concerns surrounding conflict diamonds, increase consumer confidence, and resolve bottlenecks in supply chain management and regulatory documentation. 

According to Kemp, “Paperless trading serves as a promising means to deal with the logistical challenges of e-commerce and, in particular, small shipments across borders.”

When Everledger got started in 2015, blockchain was used almost exclusively for cryptocurrency. 

By applying blockchain technology to a high-value product that is notoriously hard to trace due to geographically dispersed and opaque supply chains, Everledger was able to gain traction. 

Diamonds were an especially good vertical to start in because of the importance of provenance to the end consumer. 

Kemp explains: 

“Provenance establishes an item’s collectible significance beyond what it would otherwise appear to have. An item with interesting provenance might tell a story of fortunes made and lost, famous owners, and remarkable epochs in history. Sometimes the provenance of an object can be just as interesting as the piece itself! We offer our clients the ability to show their consumers information which chronicled the full journey of the jewel’s ownership, from mine to finger, and signed partnerships with the likes of GIA, Gubelin, Chow Tai Fook, Fred Meyer, Brilliant Earth and others.”

With the success of Everledger in the diamond vertical proving the concept, the company has expanded into other goods where provenance is important to consumers, including wine and high fashion. 

However, Everledger has not lost track of its initial focus on ESG. The company is currently working on tracking the supply chains for batteries for electric vehicles and portable electronics. 

Says Kemp, “We are now working to understand if Lithium-Ion batteries (LIBs) deserve to be called ‘blood batteries,’ and if so, Everledger’s role as a critical circuit breaker for a future conflict-free supply chain.”

Everledger logo

eToro

Tel Aviv-based eToro is a social trading and investment marketplace that enables users to trade stocks, currencies, commodities, and indices.

Although digital-first brokerages have become a standard business model since Robinhood launched in 2014 with a waitlist of over half a million people, eToro has been around since 2007. 

The first iteration of eToro launched in 2007 as a visual online platform that made trading easy to understand, using graphic representations for various financial instruments.

eToro differentiates itself by being a social network, as well as a trading platform. Not only can traders and investors execute trades, but they can also see what other traders are doing and talk to one another. 

Its most popular feature is its copy functionality, known as CopyTrading, which allows users to copy the investment strategies of experienced investors on the platform for no additional charge.

Since eToro started operating before the rise of effective ad platforms on Facebook or YouTube, its acquisition channels in the early days were quite different from now. 

Still, online marketing has played a vital role since the beginning. The founders worked with online partners and comparison sites to attract their first customers. A small sales team complemented these efforts.

Introducing social elements like chat functions and the launch of “OpenBook” in 2010 accelerated these initial growth efforts. 

OpenBook consisted of feeds where users could share investing ideas and strategies, creating an online network of users. eToro found that the most active users engaged with these social elements.

The OpenBook feature later evolved into CopyTrading.

eToro now serves more than 17 million users globally and has raised more than $272 million in funding over fourteen rounds.

eToro logo

Wrapping Up

Every startup confronts the issue of acquiring its first users. If a company is still determining whether it has product/market fit, acquiring users is the most important step after completion of an MVP. Feedback and validation are required to determine if going to market is worthwhile. 

While some of the fintech founders had industry experience and acquired users by simply getting in front of a starving crowd, others with less experience stumbled upon their customers — often after spending months or years solving a completely different problem.

Regardless, every fintech founder can gain something from reviewing the tactics used by the most successful startups in the space.

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