Save the date: we've just announced Unite Summit (Sep 16-17 in NY).
Unite is an invite-only gathering of the people building the future of embedded finance: banks, tech companies, regulators, and industry leaders. It'll be focused on people and content. No sales pitches.
Excited to announce we raised a $51M Series B led by
@Accel
and the launch of Unit Go to empower companies to build banking products in minutes! 🚀
Read more here:
Unit is live! We've been working hard to make it easier for any company to add financial features to its products: accounts, cards, payments and lending.
Thanks to
@TechCrunch
and
@ingridlunden
for the great writeup on what we've been up to.
So much recession advice from VC to founders recently, yet so little talk of mental health and the importance of taking care of yourself during a challenging period.
Name an investor who showed extra care recently, or reminded you to be kind to yourself :) I'll start:
@amitku
I'm becoming more and more convinced that banking-as-a-service winners will be those building the boring things nobody talks about: bank oversight, complaint management, deposit load balancing, flexible product terms.
I'm betting on 2023 as the first year of "embedded accounting" taking off.
Lots of vertical companies building it in house (
@baselanehq
,
@joinheardinc
) and there's a massive opportunity in infra. Description below.
Do you know teams building it? I'd love to invest + help.
Founders- how do you measure the help you're getting from your investors? We're starting to publish a quarterly leader board with the contribution of each VC:
- Talent: # of intros, # signed
- Clients: # of intros, # signed
What are other important areas? How do you measure?
This is my favorite photo from today, with my very special co-founder
@somdoron
who's been teaching me about patience, excellence, zen and software every day since we met in 2004.
Thank you
@Nasdaq
for featuring us on the tower today! 🎇
We’re celebrating our Series C funding round (link below). Heartfelt thanks to our customers, our investors, and everyone else who helped us reach this important milestone.
This is probably our most fun announcement to date.
All
@unit_co_
clients are now listed as financial institutions on
@Plaid
. This means that every consumer/business account on Unit visible to thousands of apps that use Plaid. No coding required, but we'll need your logo!
Unit is now integrated with
@Plaid
's open finance platform Plaid Exchange!
Plaid Exchange enables Unit clients to be discoverable and connected to the more than 5,000 apps and services in the Plaid network - such as Venmo, Robinhood, and Expensify.
2021 was a zero-to-one year at
@unit_co_
. We shipped 800 times, built a team of 50, added 300k+ end-users... and we're accelerating 🚴♀️
Scaling is hard 🥴 but we're up for the challenge + energized by the humans we work with: customers (always
#1
), team & investors.
Let's go!
2021 has been an incredible year for Unit, thanks to our customers, team, partners, and investors.
🏃 Annualized run-rate of more than 5.5M transactions
💸 Annualized transaction volume of more than $400M
🌎 Nearly 300K end-users
This was a lot of fun to write. Our complete guide to the five revenue streams in financial features:
1. Interchange
2. Interest
3. Payments
4. Financing
5. Software
We've just published a complete guide to the 5 types of revenues in financial features, along with a revenue projection tool you can use for your company.
Read why financial features are now becoming so common & what are the key revenue trade-offs.
1/ Trend: seeing more and more software companies hiring for a "head of banking" or "head of banking product" 🏦 Our largest clients + prospects included. Send talented people to itai at unit dot co.
What do these people do and how is this part of a bigger trend in fintech? 👇
0/ Interchange! It's the main way to monetize banking today, but it's... messy.
Here are 8 things that could affect it:
1. Individual vs. business card
2. Purchase amount
3. Online vs. offline
4. Merchant category
5. Debit vs. credit
6. Network
7. Merchant
8. Issuing bank
Just published our Ultimate Guide to Interchange Revenue. 🚀
In the guide, we take a deep dive into:
- What is interchange?
- The interchange value chain
- What you can do with interchange revenue
- How to capture more interchange revenue
I disagree with most generative AI hype in financial services. Structured data + structured processes shaped by regulation limit the value of AI.
I do think generative AI will have a PROFOUND effect on the magnitude of fraud in financial services. It'll come in the form of
1/ Today is a big day at
@unit_co_
: we're excited to announce the launch of charge cards and credit accounts.
So far, we've been offering deposit accounts, debit cards and payments. Credit is the fourth and final pillar of our product suite. Charge cards are the first step 👇
1/ Today is a big day at
@unit_co_
: we’re announcing the launch of our white-label user interfaces (UI) for web & mobile.
We created some short and beautiful clips to show you how powerful these new building blocks are.
We’re excited to introduce White-Label UIs, the easiest and fastest way to build and launch an embedded banking & lending product.
💵 Ship faster & realize new revenue streams
⌛️ Save time with low-code frontends
🎨 Fully customizable to match your brand
All
@unit_co_
clients and their end-customers can now access the Allpoint ATM network (deposits + withdrawals).
Good time for a thread on how ATMs work in fintech:
- There are 470k ATMs in the US. ~40% of them are bank-operated, the others are independent.
👇
Offering your customers fee-free ATM cash deposits and withdrawals just got easier.
We’ve partnered with
@Allpoint
to enable access to their network of over 55,000 fee-free ATMs.
@unit_co_
is changing.
We've made several important decisions recently:
1. Designing for banks as key customers 🏦
2. Doubling down on direct relationships 🤝
3. Investing more in our bank oversight product 🖥
We have a view that hasn't changed from the beginning: to serve our
We’re deepening our commitment to banks 🤝
The last few years have brought robust growth and important learnings for our platform. In this blog post, Unit CEO
@itaidamti
outlines what we’ve learned, how we operate today, and how we’re evolving.
Useful tool right now: has the ENTIRE balance sheet (past & present) of every bank in the US in pretty amazing detail- see screenshot (randomly chosen fintech bank). Entire loan book is right in front of you: SMB, commercial/residential mortgage, cards etc
Nobody does early stage fintech better. Big hearts, bright minds, maximum hustle. So happy to be working closely with you,
@pitdesi
and
@iamjakestream
.
Making financial features easy to build is a moving target, and the
@Plaid
team knows it well :)
This partnership is an important step. Really enjoyed working together to make it happen 🙌
Today, we’re excited to announce that we’ve partnered with
@Plaid
to make building on Unit even easier.
Our new Plaid Integration is instantly available to all of our clients, in both sandbox and production.
01/ Let's talk about KYC!
We've just released a complete guide that breaks KYC/KYB in fintech into 3 layers, and explains two really interesting shifts we're seeing in the market:
Diversity among fintech founders has improved in the last 2-3 years (still a long way to go).
Infrastructure is the
#1
reason. You can build + succeed:
1. Without being part of "the fintech elite"
2. With a smaller budget
3. By having more common superpowers (design, marketing)
Sharing the simple budget we made for Unit before raising our seed (with fake numbers). Some friends found it helpful as they prepared to raise.
- Milestones
- Expenses: payroll, non-payroll, one-time
- Revenues- usually meaningless at seed
- $ in bank
Surprising result of embedded finance: more partners will turn into bitter competitors due to "embedded arms race".
How it develops:
1. Companies A+B have complementary products.
2. Company B launches a new embedded feature that competes with company A's main product. Adding
Quickbooks, longtime partner of , has decided to build it's own bill payment competitor. That's not a surprise with new leadership and new ambitions. BUT, they are also cutting off 's API access? ouch.
An interesting byproduct of the API economy: more successful companies will grow out of marketing hubs (LA) while their infrastructure gets built by others in tech hubs.
In particular, very bullish on LA+NY owning a bigger % of successful consumer fintech companies.
0/ List of things
@unit_co_
shipped in the last few months.
PS- we have a new website + new docs. And we just made all the following public:
- Changelog:
- Features:
- Roadmap:
👇
@EricFriedman
It's a great story, but worth noting that the importance of features is a function of time:
The first iPhone had all the basics + enough delighters to make it stand out. Though with horrible graphic design, IMO 😉
An underappreciated part of embedded fintech: lower fraud.
- Many environments have structures that protect from fraud (e.g. verified landlord-tenant or employer-employee relationships)
- Historical & transactional data are valuable tools in understanding user risk
Seeing dozens of examples for this now. Pretty convinced that in the next 5-10y we'll see fintech scaling globally like never before. NOT pure-play fintech companies. Fintech embedded in quality software products that serve 1 vertical globally.
Guessing that fintech will scale extremely well as a FEATURE. Software giants will follow Shopify and launch financial products globally, on global infrastructure:
(1) CAC=0
(2) Tech headache ~=0
(3) Compliance headache ~=0
Is anyone building the financial operating system for franchise businesses? (financing, banking, bookkeeping & more)
Potentially valuable problems to solve & might be something that chains would love for their franchisees.
The rise of money within vertical software will lead to interesting business models:
- High margin financial services within low margin/free software
- Low margin/free financial services within high margin software
And everything in between.
Nearly 50% of Shopify is from financial services
A very fast growing segment of revenue mix for Square isn’t from its core payments biz
That’s all one needs to know to know that the trend of mixing software and money is only going to accelerate
This week, our team started coming into the NY office 3 days a week. I'm there every day and I've never been happier at work.
Here's how we announced it:
Why did we choose to step up in-person work? Thread 👇
Who is going to Money 2020 and wants to hike around Vegas / red rock at the end?
A long time ago (feels like 15 years?),
@jamesplloyd
and I found that it gives M2020 a healthy finish. Details TBD but let me know if you're interested.
Transferwise's content & SEO game around SWIFT codes for banks is genius. The
#1
result I get on Google when I have 100% intention to send money globally and I can't find this information anywhere else.
Billions of dollars now flow from payment ecosystems to embedded bank accounts. Companies like
@Square
,
@Invoice2go
and
@baselanehq
do it well.
We just published a new guide: the revenue opportunity, why small businesses love it, and how to do it right.
Really cool to see the magic of
@withabound
+
@unit_co_
running in production:
- Income is detected
- Tax is calculated & swept to a designated tax account
- IRS pulls from that account at the end of the Q based on account + routing #
🙌
@alexcram
,
@trentbigelow
,
@somdoron
Excited to announce that we've partnered with
@withabound
to help companies serving freelancers offer more financial features.
Clients will be able to leverage our new integration to help freelancers automate their tax contributions and payments.
KYC/KYB forms in banking are both difficult to build and undifferentiated (at least in the beginning, and especially if banking is not your core business).
For us, it was a sign that we should offer them as part of
@unit_co_
. Say hi to Application Forms 👋
Introducing Application Forms, our new white-labeled UI for onboarding new end-customers: individuals, sole props, & businesses.
🚀 Launch faster
🎨 Customize to match your brand
✏️ Pre-fill the form
📲 Responsive, conversion-optimized, & compliant
Anyone in your network you could imagine building Stripe's compliance team in years 0-5?
@unit_finance
is hiring a CCO. We're looking for the rare person who can build and manage Unit’s compliance team- and compliance culture- from launch to 100+ clients
I stopped using most social media after noticing the effects on my mental health. I'm now convinced that dating apps turned into dopamine traps that affect my soul in the same way.
Anyone else feeling this? Anything that you did & helped you?
Seeing more and more people claiming that AI will bring "the end of software" or "death of SaaS".
So far, zero of them have experience building software.
I've never been more bullish on companies that work hard to build and distribute quality software.
More magic! All bank accounts on
@unit_co_
are now visible to Quickbooks + other
@Intuit
products.
Businesses can now manage their accounting seamlessly and reconcile against their bank accounts. It's always fun to ship a top 5 requested feature.
More:
Meeting new investors during covid? No face time makes it harder for them to get to know you & your leadership style. If you plan to raise soon, take some time to write now. Document your principles, strategy and thought process. Share it- it'll help people get to know you better
My landlady couldn't be more excited for the launch of recurring payments on
@unit_co_
:)
This feature is available immediately for all customers, on all 4 partner banks, and all future partner banks (announcements coming soon!).
More info & docs below 👇
@Suhail
2 good pre-code MVPs are Buffer (SEM only) & Dropbox (video only). I like to ask pre-PMF startups to talk to N prospects & M industry people before embarking on risky journeys. In B2C: N=40, M=10. In B2B: N=20, M=5. Pre or post code isn't relevant. Removing risk is removing risk.
4/ This shows the shrinking cost of building fintech:
- 10y ago, entire companies were fintech
- 5y ago, entire teams (~20 people) were needed to operate a fintech feature within a company's product
- Today, a team of 3 can bring a rich banking product to life.
Isn't it cool?!
The situation between Synapse and Evolve Bank created a lot of discussions about FBOs, ledgers & reconciliation.
Thought it would be helpful to publish 3 technical posts:
- PART 1: Ledgering & reconciliation 101
- PART 2: The specifics of the Synapse case
- PART 3: Comparison of
Today we’re announcing Partner API Tokens 🤝
Now partners integrating with Unit can securely access user-permissioned data to build things like:
💡 Smart budgeting and financial advice
🛍️ Streamlined rewards
💫 Transaction-based saving and investing
Which companies have built great online communities for their customers?
We're debating why + when + how we should do it (forums? other tools?). A little worried that communities give you an excuse to obsess less with self-serve product + content.
What's your experience?
Two things that always backfired so far in my career:
1. Paying retainers to consultants
2. Agreeing to exclusivity with vendors
Did it ever work for you?
Every week counts.
We made a page that you can print when you start a new job, or give to new teammates. Put it on your desk and scratch 1 box every week. It reminds you how scarce time is, and hopefully creates urgency to make a difference.
PDF:
Lemonade’s S-1 is out and is an interesting read. I made a bet with
@itaidamti
a couple of months ago that the company would exit for <$1.8B, and it seems like we might find out who was right!
Are you on my side or Itai’s?
Learned recently that some of
@unit_co_
's guides are now mandatory reading within
@stripe
.
It takes us weeks to write each guide. We're excited to share a new one that we hope could educate thousands of B2B software companies. Tell us what you think.
Unit is hiring a Head of New Bank Partnerships!
We're looking for a bright, dynamic leader who is passionate about embedded finance and empowering community banks.
Apply here:
Biased, but this is an amazing opportunity- help us strengthen the fintech banking ecosystem, support community banks throughout the country, and drive meaningful impact at Unit for years to come. 🏦💪🚀
01/ We're excited to announce our integration with
@rainforestpay
.
If you don't know Rainforest- they're the Stripe Connect competitor that I remain most bullish about. I've been an admirer of Joshua and his team from the early days, and it's been really fun to watch their
Great read. How BoA overcame the marketplace chicken & egg in 1958, how visa was born and why it's one of the best businesses on the planet. Struggling to think of arguments against investing in Visa & Master stocks long term. Thanks
@pitdesi
for sharing
It's annoying to have a competitor that also dabbles in book publishing and does it really, really well.
Hats off to
@stripepress
for the release of Poor Charlie's Almanac and a lot of other good reads!
Feels like there's hyperinflation in tech right now:
- Funding 📈
- Salaries 📈
- Liquidity 📈
- Cost of software & services 📈 - though VC-funded vendors tend to price lower (due to their own efficient cost structure + pressure to keep growing)
Is it sustainable?
At the end of 2023, 486 federal lobbyists were working on behalf of $50b+ banks and financial trade groups (source: ). This kind of budget doesn't exist in embedded finance, whether it's banks or infrastructure companies.
To get a chance to thrive, our
A new
@FintechTakes
essay (sponsored by
@unit_co_
) just dropped!
In the midst of all the drama, I think we've lost track of the purpose that BaaS serves. Today's essay looks at BaaS through the lens of competition and explores how it should evolve.
We need to strive for a fintech ecosystem that's 50x bigger, more inclusive & more accessible.
Well done
@sarthakgh
and
@beondeck
for supporting a new generation of builders. Excited to contribute.
✨Announcing: On Deck Fintech Fellowship✨
Fintech is exploding but barriers to entry and lack of access to specialized knowledge have slowed innovation — until now.
Today we're helping innovators create the new frontier of financial services.
The only effective way to update processes in a company:
1. Add it to a place that ALL future employees see.
2. Announce it on Slack/email.
The biggest mistake is doing only 2.
We just coined "permanent publishing" at
@unit_co_
to reinforce this. Would you use a different term?
@zachtratar
Unit is soon completing work with a sweep network that will achieve this (we'll add more networks over time). It generally requires:
- Disclosures to end customers
- Full buy in from the bank that acts as the primary institution
- More dynamic approach to APY
Convinced that in 5-10 years big banks will suffer greatly from the finance equivalent of "Amazon effect".
Market share loss will come from 2 directions:
1. Consumer: Apple, CashApp & big tech.
2. Business: Square, Wix, Shopify & all business OS.
WDYT?
Yes, but also-
1. I'd like to see more boards proactively aligning founder comp with market. Many founders I know are undercompensated (% + $) and boards are passive.
2. It would be nice to see "liquidation preferences" for founders becoming a norm- maybe $0.5-1m for each year.
I'm seeing an increasing use of "Founder Bribes" show up in funding rounds and acquisition offers.
A Founder Bribe is when the Team is treated VASTLY differently in a deal/round than Investors. The waterfall is effectively ignored.
Anyone else seeing this? Sad to see....
Today I had a meeting at a 100+ year old community bank in a small town (<10k people). It's nice to remember that banks used to be as mundane an institution as the book shop or the restaurant next door. Just humans solving local problems. Not faceless, not "too big to fall".
Which fintech companies are currently hiring CCOs? I've recently interviewed fantastic candidates in NY, SF and other places. Happy to make an intro- just send me a blurb. itai
@unit
-finance.com
One of my favorite blog posts by
@eladgil
:
Fintech companies violate this. They operate in huge markets but they haven't scaled like SaaS companies, because their next $ is always best spent on LOCAL (1) acquisition (2) tech infrastructure (3) compliance.
@conradev
@shl
@paulg
Expected value is a dangerous tool for pricing startup equity & other animals in extremistan.
@shl
said: instead of justifying joining a startup with Pascal's Wager on equity, people should justify it with great things that startups can almost surely offer. Totally fair.
Thinking of hosting a casual webinar for VCs and PEs to cover the state of banking-as-a-service and embedded finance in detail: revenue & business models, trends, regulatory developments & more.
What questions / topics would you like us to cover?
1/ Banking TIL: everyone knows checking and savings accounts, but have you heard of NOW (Notice of Withdrawal) accounts?
They behave just like checking accounts, but:
1. The bank is allowed up to 7 days to complete a withdrawal
2. They can't be opened for for-profit entities
The
@unit_co_
team just published a full guide on embedded finance for gig workers:
- 1,700 words
- 11 short videos and images
Learn how to monetize, engage and build a better workforce with:
- Instant payouts
- Wallets + cards
- Targeted rewards
- Auto tax withholding
- More.
Reasons companies migrate off their banking infrastructure:
- Missing financial products
- Missing software features
- Technical instability
- Customer service and operational issues
- Economics
- Underlying bank issues
Read our step-by-step guide to a safe + sane migration.
Migration projects are not easy, especially in the case of your banking infrastructure.
Read our new step-by-step guide to a safe (and sane) migration. And feel free to share your own tips- we'll keep updating this guide.
What's your most concise summary of a manager's role?
I keep realizing that for me it's probably just 2 things-
1. Developing people's thought process (=the quality of the code in their head)
2. Sharing context with people (=the quality of the data in their head)
Lots of people asking us about increased FDIC coverage on
@unit_co_
: how it works, what are the trade-offs, what's the lift to enable it.
Public roadmap item:
A quick thread on the mechanics of this feature 👇
Open source (or simply open) ledgers and accounting systems... really exciting ideas that could emerge naturally from
@unit_finance
and other banking-as-a-service platforms.
Prediction: we will start to see more open-source fintech infra software built in the next 10 years that will standardize the data layer (spec, format and access patterns).
OSS model has two unique advantages here:
1. Boost ecosystem integration
2. Cover edge cases
Feature request in 100% of client-facing tools (Gmail, Asana, Docs, Sheets, Slack, Figma): let my team make privileged comments / discussions that the other side can't see.
Dangerous & tricky to get right, but would be really, really valuable.
We're comparing PEOs (Sequoia vs Justworks). Have you been through this process? Willing to share here or privately what were your considerations and if you're happy with your choice? Thanks 🙏
Writing a blog post that generalizes the idea of "embedded fintech" into "embedded everything".
Over time, many tools will get absorbed by vertical software: communication, CRM, legal, project management, marketing, accounting.
Agree/disagree?
CC
@fintechjunkie
@mattcharris
Guessing that fintech will scale extremely well as a FEATURE. Software giants will follow Shopify and launch financial products globally, on global infrastructure:
(1) CAC=0
(2) Tech headache ~=0
(3) Compliance headache ~=0
The conversation in fintech is shifting from products (fintech 1.0) to audiences (fintech 2.0). More and more companies want to add financial features to their products — but until now, it's been too difficult. This changes today.
See our announcement:
When we started
@unit_co_
, we were intentional about making reliability one of our core values. This week, more than ever, it means showing up as partners, offering support, and educating our ecosystem in the best way possible.
We've just published a note
@chr1sa
I've been wondering if areas in crypto will end up looking like 3D printing in 5-10 years. In both cases ideals are extremely appealing for geeks & libertarians, but very irrelevant for most people and completely incompatible with how very established industries work.
PS: we're hiring: ()
-- Customer Success Manager (NY)
-- Customer Support Manager (NY)
-- Head of Business Development and Partnerships (SF)
-- Head of Product (Tel Aviv)
@immad
I don't think that lessons about effective leadership require your company to be old / at a certain level of success.
I'm always curious about lessons from more experienced people (relative to me) who can make me more effective (relative to where I am today).
Who is going to Money 2020 and wants to hike around Vegas / red rock at the end?
A long time ago (feels like 15 years?),
@jamesplloyd
and I found that it gives M2020 a healthy finish. Details TBD but let me know if you're interested.
Do people in your company ask questions anonymously during large meetings? Do you think it's a net positive / negative? Why?
A good friend (also founder) texted me anxiously today to ask how we explained our recent move to non-anonymous. Here's how. Is this too idealistic?
On May 1st, I'll host a small session for VCs and PEs to cover the state of banking-as-a-service and embedded finance.
Sign up here:
The content will be... dense :) It's based on our notes and learnings after nearly 5 years of operating in the space.
I don't understand how a company like Salesforce can fail so miserably at guiding its users through the basics.
You'll be OK eventually but for 3 months use Google to discover 800 official + unofficial articles + forum posts of fellow confused users. So much noise.
Chapeau!
Feeling lucky to be part of a world class team led by
@somdoron
(tech),
@JoeOehmke
(ops) and Amanda Swoverland (compliance). We're all incredibly grateful to be working closely with fantastic clients, partners and investors.
Let's get to work.
This week,
@unit_co_
held its best product demo to date! Kudos to our amazing team members: Ehud, Sai, Sarah and Louise.
100+ companies joined us and saw new releases in action:
- White label apps: banking + charge cards
- Capital + underwriting: white label UI components & APIs