Archive for 2021
Fintech Company Launching Money Managing App with Big Incentives
September 29, 2021
The fintech company Enzo is set to launch a money managing app within the end of the year and is handing out tremendous incentives to draw customers. The company is offering 10% cash back on Uber rides, 5% cashback on Doordash, 1.5% cashback on rent payments, and 1.25% cashback on everything else. Checking accounts offered by Enzo will also get a 0.50% interest rate.
Enzo’s cashback program has its limits. Annual cashback bonuses are capped at $500, and monthly cashback bonuses are capped at $65. According to their site, if a user spends $2,000 on rent, $150 on Uber, and $400 on DoorDash in one month, they would be credited $65 at the end of the month into their Enzo checking account. Once the monthly and/or annual cap has been triggered, an account will continue to earn 1.25% cashback on all other purchases.
“We started Enzo because we kept seeing our friends make the same money mistakes over and over,” said Jeremy Shoykhet, CEO of Enzo. “We saw people who excelled at every aspect of their lives struggling to get their finances in order [and] we felt there had to be a better way.”
Enzo will also be offering their first batch of account holders equity in the company.
“We feel very strongly about helping our members build and steward wealth,” said Shoykhet when asked about the company’s equity offer. “In connection with that mission, we are launching a first of its kind equity program where we will be giving equity to early evangelists of the Enzo brand, more information about the specific mechanics of the program will be available toward year-end,” he said. “The program does not require opening an Enzo account and is subject to terms and conditions.”
The company also has a stock trading interface within its mobile app, so customers can manage liquid cash and investments in the same place. According to Enzo’s website, customers can automatically track gains, dollar cost average over time, customize portfolios, and manage checking accounts all in the Enzo app.
“At our core, we want to help the millennial generation build the financial foundations that help them live the lives they desire,” Shoykhet said.
The company’s banking services will be FDIC insured through Blue Ridge Bank, who will hold all the money and process the transactions. They are also partnered with Unit for the backend technology in the software. Customers will have access to funds in their checking accounts with an Enzo debit card, which will be uniquely designed by artists for the first ten thousand account holders.
Enzo’s webpage claims that their inaugural staff is a “diverse team of veteran Wall Street investors, engineers, operations, and product folks.” They claim to have gathered top level employees from some of the top financial institutions around the globe.
Enzo’s accessibility and seemingly user-friendly software combined with their incentives for account holders portrays a very interesting notion in non-bank finance. Customers are looking for an easy to use, easy to understand, and easy to access multi-platform money management system with perks and incentives.
Enzo has a waiting list approaching 14,000 potential account holders as of Wednesday. As of now, according to Shoykhet, the program will launch as invite-only. They will add new customers into the program on a rolling basis.
This may not be the end of new financial services for Enzo, according to Shoykhet. He hinted to the company’s future plans in his explanation of the product. “We are also planning to launch innovative financial planning features through a mix of human advice [and] technology-powered advice.”
Small Business Funders Are Hiring, But Does Anyone Want the Jobs?
September 28, 2021
As the small business finance market gets back to normalcy, the industry’s latest challenge is filling all of the open positions. Jobs that would once attract hundreds of resumés are now ending up with very few, if any at all.
Even after pursuing LinkedIn, the applicant pool just looks light.
In our research, deBanked found five fintech companies on LinkedIn that have ads that are at-least a week old with three or less applicants.
One company based on Long Island, promoted a $5,000 signing bonus for an underwriting position and only had five applicants. Meanwhile, a self-acclaimed “prestigious” Manhattan lender even has a month-old ad posted that offers a $10,000 per month salary. That job has one active applicant, according to LinkedIn.
Chad Carter, Director of Franchise Success at Lendio, says the hiring process has been difficult, but isn’t impossible to navigate. “Being based in Utah has been somewhat challenging as unemployment is extremely low and the Silicon Slopes area has a lot of tech headhunting,” said Carter. “We’ve hired and are hiring hundreds more people this year so we feel it too. Luckily we have extremely good reviews on Glassdoor, which helps keep applications coming and our culture keeps them here.”
Some companies have gotten creative when it comes to building their staff to counter the lack of applicants in the workforce. “We have seen some open roles have more interest than others,” said James Webster, CEO of ROK Financial. He says his company has been able to expand hiring by offering remote sales positions that opens the applicant pool nationwide.
“We have been hiring and building an outside sales division known internally as the Remote Sales Division,” Webster said.
He claims the number of applicants for remote sales positions have been high, but that doesn’t mean his company is hiring a ton of staff to add to the program. “We are still extremely selective on who we allow onto the platform as they represent ROK in the market,” said Webster.
“All in all, recruiting is harder now than it has been in previous years,” Webster said. “Especially when the culture in the office is such a priority to maintain.” He noted that the roles that are currently difficult to fill are mostly administrative positions, not sales.
A recruiter for a large finance-centric company that wishes to stay anonymous told deBanked that the finance industry in general is having hiring troubles, not just fintech. “There’s tons of turnover all around,” said the recruiter, who claims that they themselves are actively being poached by other companies due to the lack of people wanting to work.
“I can only assume that fintech is just as crazy,” the recruiter said.
MJ Capital Funding’s Website Has Been Shut Down, Company’s Assets Being Auctioned Off
September 24, 2021
MJ Capital Funding investors holding out hope that a return to business as usual could be in the cards for the company accused of being a ponzi scheme, might find that outcome a little less likely.
The Receiver has agreed to auction off all of the assets at the company’s Pompano Beach offices on September 28, and everything must go, from the 60″ TV to the garbage cans to the houseplant.
Such powers afforded to the Receiver, a law firm partner named Corali Lopez-Castro, also gives her the ability to enter into binding legal agreements on behalf of the company, the latest ones being Consent Agreements with the SEC. In doing this, the two MJ companies (MJ Capital Funding, LLC and MJ Taxes and More Inc.), have agreed to disgorge of “ill-gotten gains,” accept a civil penalty, and be permanently restrained from continuing its former business. Such an arrangement is standard fare when companies are thrust into forced Receiverships like this one. The Receiver’s job will be to collect as much money as possible so that it can be distributed to afflicted investors.
The MJ Capital Funding Website has also been shut down. It now forwards to law firm Kozyak, Tropin, Throckmorton. Regular updates on the case are available for free at: https://kttlaw.com/mjcapital/.
The consent orders do not apply to former CEO Johanna M. Garcia individually, who lost control of the company and ability to act on the company’s behalf when it was placed into Receivership.
An astounding 3,160 people have signaled their support for Garcia in this case. That’s the number of signatures on the online petition for her located on change.org.
“Our goal with this petition is to get those funds unfrozen as soon as possible,” it says. “This is Johanna’s desire as well proving once again Johanna’s unwavering support for us and in building a strong team and community. Johanna has helped countless amounts of people and charities with the work she does local and worldwide.”
Marcus Has Reached $100 Billion in Deposits
September 24, 2021
Marcus by Goldman Sachs, the prestigious investment firm’s attempt at being a conventional bank, announced that they have over $100 billion in deposits after just five years in operation. The online platform that began as an invite-only savings platform has transformed into a full-blown consumer bank, operating on the futuristic model of operating savings and CD accounts digitally.
“If you told me we would accomplish so much in just five years from launch, I would have said you were crazy,” wrote Harit Talwar in a LinkedIn post on Thursday that announced his retirement from Marcus. “It shows that nothing is impossible when you have the best people.”
In his post, Talwar praised Marcus’ desire to take risks, acting as a separate entity while having to operate within the confines and upkeep of the Goldman Sachs reputation.
“We had the audacity to think big, and it’s safe to say we proved the skeptics wrong – eight million customers, $100 billion in deposits, nearly $10 billion in card and loan balances, $1.5 billion in run rate revenue, two J.D. Power wins and partnerships with the top brands in the world including Apple, Amazon, Walmart, JetBlue, AARP, General Motors and more,” Talwar wrote.
Marcus launched in 2016 with some of the best interest rates in the banking industry. It introduced the Goldman Sachs brand to an entire new group of customers by offering up high interest rates on accounts with no fees, which was nearly unheard of at the time. Two years after launch, Marcus had over $35 billion in deposits.
Marcus’ path was almost completely different prior to its launch. The original idea prior to Marcus was a platform called Mosaic, a banking concept meant for borrowers with good credit that were looking to refinance other debt.
In his retirement post, Talwar credited the camaraderie that developed between employees as a major factor resulting in the success of Marcus. “The team has given more than perhaps in prior jobs, but maybe that is the price of building something this extraordinary at an unprecedented pace,” Talwar wrote. “Yet by sharing those experiences in the trenches, we’ve made lasting friendships and redefined what a consumer business looks like.”
The outlook for Marcus is seemingly endless. Online banking is trendier than ever, and the outlook for banking is losing the brick-and-mortar mentality.
Experts also believe that Marcus has helped Goldman Sachs’ progress into new markets. “Marcus has taken advantage of a core strategic advantage—[Goldman Sachs’] lack of a preexisting deposit customer base— to prove that digital deposit gathering at scale is possible for a large institution,” Todd Baker, Managing Principal of Broodmoar Consulting and Senior Fellow at Columbia University told deBanked.
When the company first came about, deBanked reported that Marcus may be poaching customers from a peer-to-peer lender named LendingClub. The two companies are now more alike than ever given that LendingClub is also now a bank. LendingClub, still new to the banking scene however, had only amassed $2.5B in deposits as of June 30, 2021.
It seems that Marcus may have been ahead of the curve when it comes to fintech’s place in traditional banking, racking up staggering figures across the board and showing young upstart competitors just how strong it is.
Would You Invest Your IRA Funds into MCAs?
September 22, 2021
A partnership between Supervest and Alto Solutions will bring in an unprecedented opportunity for investors, as the two groups will come together to allow IRA investors a chance to put their money in MCA funding. Account holders with Alto will be able to divide their money on a fractional basis to a diverse set of investments on the Supervest interface.
“We expect these alternative investments to be very popular given the meaningful diversification they can provide to individual retirement portfolios in addition to being yield-generating and short-duration products,” Alto’s Chief Revenue Officer Tara Fung told deBanked on Tuesday. “We will continue adding to our platform so that clients have more options to invest in alternative assets that further diversify and grow their retirement portfolios.”
Alto has made a business model out of using IRA funds for unique alternative investments. Crypto investments are another option listed on their website.
Supervest is no stranger to incorporating new business ideas, either. Their business model is based on connecting investors to inaccessible classes of assets, like MCAs for example.
John Donahue, the Chief Investment Officer with Supervest, spoke with deBanked on Wednesday about the opportunity it gives IRA account holders. “It’s the opportunity for any accredited investor to now be able to access the Supervest platform of fractionalized participation in MCA deals through their self-directed IRA,” Donahue said.
MCAs can be inherently riskier than a typical lukewarm investment portfolio, but the IRA concept is basically detached from the selected risk profile therein.
“The IRA is strictly a structure,” said Donahue, when asked about the inherent risks of MCA investments with IRA money. “It really doesn’t have a connotation of conservative or aggressive nature. You can have aggressive mutual funds [in an IRA], you can have your entire investment of your IRA in the ARK New Technology fund, and while that has gone up considerably in the past few years, there’s a massive amount of volatility, it’s extremely risky, and arguably much riskier than an MCA investment.”
Donahue reiterated that only “accredited investors” would have access to these types of investments through the Supervest platform.
As the partnership between the two companies kicks off, it’ll be interesting to see if individuals are willing to put their retirement money on the line to invest in small businesses.
Miami May Become the New Small Business Funding Hub
September 22, 2021
At least two funding companies have told deBanked off the record that they plan on opening offices in the Miami area in the new year.
It seems that South Florida, particularly Miami, is where the small business finance industry may be moving for a fresh start, and with that potentially ditching the suit and tie for flip flops and shades in the process. The social, political, and economical elements of South Florida make it a well-suited landing spot for an industry that is looking to evolve with the shifting environment.
One catalyst to the potential industry-wide migration could be the S5470B regulations that go into effect in New York on January 1. The new law will require funding companies to navigate a complex system of disclosure to any interested small business finance prospect.
There are other benefits to Florida, of course.
Jordan Fein, CEO of Greenbox Capital, whose operated his business out of Miami since 2012, prides his choice of locale on all the factors that are seemingly pushing those in New York down south. “We do not have state and city tax, we are near water and have a better lifestyle than most companies in New York, or in other areas where it gets very cold in the winter,” he said.
Fein stressed the relaxing Miami lifestyle as the reason why he has only called South Florida home to his company. “The lifestyle here is second to none. Being near the ocean, it makes it much more enjoyable to be able to go to the beach or on a boat to relax and take a load off from the busy work week. New York and other large cities seem to add more stress from [New York’s] super-fast-paced style.”
Despite his love for Miami, Fein respects New York’s ability to churn out top tier employees in the industry. “The talent pool is still among the best,” Fein said, when asked if there were any reasons he or others would ever consider maintaining a connection with the area should an exodus occur.
Fein isn’t worried about the incoming competition should offices relocate to his area. “Location of a funding company has no bearing on competition,” he said. “We all do business over the internet and the competition of funding is dependent on new companies entering the space, not on their location.”
If it is true that the industry is moving to a fully digital competitive space, the idea of a warm weather city with great tax benefits, comparatively low costs of living, and a low-stress atmosphere may be a no-brainer when it comes to finding the funding industry a much needed new home. Not to mention, the mayor of Miami also really wants small business finance companies to relocate there.
In a taped episode of deBanked TV, Miami Mayor Francis Suarez told reporter Johny Fernandez that he really wants small business lenders and MCA companies to set up shop in his city.
Watch: Miami Mayor Francis Suarez talks with deBanked in March 2021“We definitely want to make sure that small business, merchants, and lenders are able to capitalize small businesses in our community,” he said. “Miami’s a very thriving small business community. One of the things that people have criticized us for is we don’t have those big massive companies. We’re actually really built on small businesses. So for us, having fluidity of capital, liquidity of capital, access to capital are enormous things in terms of scaling. And I think that’s one of the things that we’re seeing change now is because of technologies. We’re getting a tremendous amount of access to capital that we weren’t getting before.”
Google to Purchase Manhattan Building in Mega Deal
September 21, 2021
In the footsteps of other giant companies like Facebook and Amazon, it seems that Google has joined in on buying a tremendous piece of New York City office space, as Google’s parent company Alphabet has announced a tentative $2.1 billion deal Tuesday to purchase the building they already lease.
Under extensive renovations, Google plans on making a 1.7 million square foot community of office space by adding the former freight terminal to their New York offices— competing with some of the biggest names and workspaces in the city.
Google will remain in complete control of two other office spaces in Soho and Greenwich Village in conjunction with the new acquisition on the Hudson. The combination of these three offices will create a campus-esque environment for the tech giant. All the offices are within about a mile radius of one another.
First reported by the Wall Street Journal, the purchase is New York’s largest single office building sale since pre-pandemic days, while also being one of the biggest purchases in New York City commercial real estate history.
As smaller fintech companies are seemingly leaving the city in droves, it is the big players in the industry who are looking to stick around and ride out Manhattan’s post-pandemic and remote work woes.
It seems that Google, along with the other tech giants, are expecting a large in-person working environment to return to New York. According to CEO Sundar Pichai in an announcement on Google’s blog from August 31, the company plans on keeping remote work an option for all employees until January 10. After that, they are leaving it up to local officials to dictate if employees can be asked to return in person.
“To make sure everyone has ample time to plan, [employees will] have a 30-day heads-up before [they’re] expected back in the office,” Pichai wrote.
With Facebook’s acquisition of office space at Penn Station and Amazon’s purchase of Lord and Taylor’s former 5th Avenue landmark building, Google is late to the Manhattan real estate grab. These giants are paying top dollar for these spaces, as eight-figure real estate deals are status quo for a city that is littered with empty storefronts and a questionable future for many of its longtime tenants.
Google has a track record of building a presence in New York. An east coast presence is nothing new for the company. “Our investment in New York is a huge part of our commitment to grow and invest in U.S. facilities, offices and jobs,” wrote SVP and CFO Ruth Porat on a Google Blog back in 2018 when the lease agreement for the building was made.
Earlier this year, the company committed to a $150 million investment in New York workspaces.
Google’s new offices will serve as the main hub of their New York City offices. As the new year arrives, Google expects to see 1/5 its workforce still remote. With their new offices already functioning, the new office should complete the Google campus in 2023.
It seems that Silicon Valley’s presence may be creeping East as the finance industry continues to head South. With the price of commercial real estate sky high, the reputation for the city at a low, and a political climate that is creeping its way into business, it seems as if New York may be evolving into the East Coast Silicon Valley hub.
New York DFS: The Commercial Financing Disclosure Requirement is Happening
September 21, 2021
New York State’s financial regulator announced that the commercial financing disclosure law is moving forward as planned for the Jan 1, 2022 deadline.
To prepare those that will be subject to it, Acting Superintendent Adrienne A. Harris released a copy of proposed regulations that will be open to comment for 60 days.
Its length, 45 pages, demonstrates the complexity that compliance will require. Anyone involved in commercial or small business financing should take the careful time to read it.
“The Department of Financial Services will then review all received comments and issue a final regulation,” the announcement says.
