Welcome back to The exchange, where we take a look at the hottest fintech news from the previous week. If you’d like to receive The Interchange straight to your inbox every Sunday, head over here register! This week we delve into the ai aspirations of expense management companies and the recent growth of a UK fintech.
ai ambitions
There was a time when it was joked that all companies would become fintech. But now we have to ask ourselves: will every fintech company become an artificial intelligence company?
This week, we reported on Ramp’s new integration with Copilot, Microsoft’s brand of generative ai technologies. The expense management company said Microsoft Teams users can now use natural language to access Ramp’s intelligent ai assistant from their workspace.
Of course, Ramp is not the first, nor the only, expense management company to leverage ai. Brex In September it launched Brex Assistant, a flagship product of Brex ai. In addition to automating the collection of expense information, Brex Assistant can also do things like answer questions that employees would traditionally ask their finance teams, such as how much they can spend per day at an off-site location.
Brex co-CEO and co-founder Henrique Dubugras told TechCrunch+ that he believes “this is just the beginning of ai‘s impact in rethinking employee and user experience from the ground up.”
Earlier this year, Navan claimed to be the first travel company to integrate OpenAI and ChatGPT APIs into its infrastructure and product suite.
The company said it was using generative ai technology to write, test and fix code with the goal of increasing its operational efficiency and reducing overhead. Additionally, through Ava, Navan’s virtual assistant, travel managers can personalize recommendations and increase traveler engagement, executives say.
However, it is worth asking whether leveraging ai is not just about improving the customer experience but also about improving business results. It’s a valid question, especially considering reports that Brex experienced slower growth (of just 1%, according to the information) in the third quarter compared to the second.
While Brex declined to confirm The Information’s report that it had third-quarter annualized revenue of $283 million, compared with $279 million in the second quarter and annualized revenue of just under $200 million , this information must be taken with caution. Brex likely saw an event-related revenue surge after the Silicon Valley Bank crisis in March. So the fact that it grew more slowly in the third quarter seems less dramatic than if a big event hadn’t happened to give it a boost in business. Revenue continues to increase compared to last year and, according to the company, so do profits.
A spokesperson told me: “Examining our year-over-year growth tells a significantly different story and shows how Brex compares favorably in this market. “So far this year, three of Brex’s main revenue drivers – card revenue, deposit spread revenue and Empower revenue – are growing materially and we have seen over 80% year-on-year growth in gross profits.” Empower, the company’s software product, has seen revenue growth of nearly 50% this year, according to Brex.
The company, which was last valued at $12 billion, declined to comment on the timing of the IPO, which is rumored to be sometime in 2025.
In August, Ramp raised $300 million in a funding round co-led by existing backer Thrive Capital and new investor Sands Capital at a post-money valuation of $5.8 billion. At the time, the company said it had surpassed $300 million in annualized revenue.
Meanwhile, Navan reportedly generated $300 million in revenue in 2022. That company (previously called TripActions) was last publicly valued at $9.2 billion.
In addition to competing against each other, these companies compete with legacy providers like Concur and Expensify. So it’s no surprise that everyone is leveraging ai to win over customers and make their operations run more efficiently. – Maria Ana
PS: You can listen to Alex Wilhelm and I delve deeper into the topic on the latest episode of Equity here:
An update on Wise
I recently spoke with Intelligent Interim CTO and CEO Harsh Sinha when in town for the grand opening of the company’s new UK office in Austin. In case you haven’t heard, Wise, known for facilitating cross-border payments, is doing quite well these days. He recently reported that revenue grew 22% year over year in its fiscal second quarter, to approximately $314.7 million. He also saw his revenue increase 51% year over year to about $420 million. The company has more than 5,000 employees worldwide, 180 of whom are located in Austin, where it seeks to increase its workforce by 50% over the next 12 months.
With 16 million customers, Wise has been profitable since 2017, long before going public in 2021, according to Sinha.
Interestingly, Sinha believes that part of the company’s success lies in the fact that it “never gives away its product for free.”
“We think charging for your product is something you should do, even if it’s $1,” he told TechCrunch.
Sinha also shared how Wise has grown over time by going beyond facilitating cross-border transactions to giving users the ability to hold, spend or send funds around the world.
“Now you can have 50 different currencies on Wise and it basically works as an account product,” Sinha said. “You can receive your salary; you can pay your bills from there, you can make direct debits. And basically the proposal is for anyone who lives in multiple currencies and has an international lifestyle.”
He also highlighted the speed of Wise’s offering.
“An example of the way we move money around the world: you can make a transfer from us to Australia and it will arrive in the recipient’s account in less than 20 seconds. I will challenge you to do that with ACH today,” Sinha said. “And we have done this by building a network that connects directly to local payment systems around the world. And 57% of our payments now on the network are instantaneous, less than 20 seconds.” – Maria Ana
Weekly news
Journalist Manish Singh tells us about the Indian central bank’s decision to implement several measures to curb the growth of consumer spending. The new measures are for unsecured personal loans, credit cards, durable consumer loans granted by banks and non-banking financial companies. This comes as industry analysts report that 39% of retail loans made in fiscal 2023 were made to borrowers who already had five or more active loans. Manish writes that this adjustment will affect startups in the business of providing loans. He spoke to one fintech founder who said it would slow growth “a little bit.” Read more.
Journalist Tage Kene-Okafor writes about pay stack laying off 33 employees in Europe and Dubai amid the African payments company’s focus on its home continent. Tage reports that the company maintains a presence in Nigeria, Ghana, Kenya and South Africa and is now conducting private beta testing in Cote d’Ivoire, Egypt and Rwanda as part of its expansion efforts. Read more.
Editor Frédéric Lardinois broke down the term “Financial operations” in an article this week in which tech giants including AWS, Microsoft, Google, and Oracle team up to make cloud spending more transparent. This is because each SaaS platform has its own definitions and way of doing it. Enter the FinOps Foundation, a movement aimed at creating a better framework for how cloud spending is tracked and reported. Read more.
Editor Sarah Pérez covered VenmoGoogle’s new feature that allows users to split expenses between groups. What’s cool about this is that for groups, like individual clubs, community organizations, and even roommates, you can ditch the spreadsheets you currently use and instead keep track of everything through Venmo. All group members can also manage expenses, so one person isn’t stuck with the role. Sarah notes that this new feature is likely to “cannibalize the user base of single-purpose apps aimed at organizing group expenses, such as divided.” Read more.
TC’s Tage Kene-Okafor reports that cash recently announced an enhanced strategic partnership with Visa to drive growth and financial inclusion across the African continent. Having had an established partnership with Visa since 2021 for card issuance, this expanded agreement will allow Chipper to utilize Visa’s vast experience and investment in more areas of its business, such as licensing and product marketing. “We are delighted to announce our expanded collaboration with Chipper Cash. This deepens our support for the growing demand for digital financial services in Africa and drives significant impact across the continent,” said Meagan Rabe, senior director of fintechs at Visa in sub-Saharan Africa. “We look forward to continuing our work with Chipper Cash to redefine and push the boundaries of financial accessibility and convenience.” The announcement comes just two months after Chipper announced the launch of Chipper ID, the ai-based onboarding and verification tool created specifically for the African continent. Read previous coverage on Chipper Cash here.
Other articles we are reading:
ICYMI: Plaid officially jumps into lending
Inside the war between Square and Cash App on Dorsey’s Block
Companies love rewards credit cards. This startup makes it easy to launch (See TechCrunch’s previous coverage of Imprint’s $38 million round.)
Big Banks Are ‘Ripping Off’ Americans, Says Robinhood CEO. This comes as Robinhood raises its Robinhood Gold rate again to 5% APY on uninvested cash.
Dwayne Johnson Links Up with Acorns for Launch of Mighty Oak Debit Card
Financing and mergers and acquisitions
As seen on TechCrunch:
Meet Tanda, your friendly neighborhood lending and savings network
Seen elsewhere:
Dwellsy’s Consumer-First Rental Search Raises $11.5M Seed Round
ai-powered-accounting-platform/” target=”_blank” rel=”noopener”>Puzzle Secures $30M for Revolutionary ai-Powered Accounting Platform
Happy Money announces new financing
Defacto: French fintech secures funding extension from Citi Ventures (Learn about Defacto’s origin story and more in previous TechCrunch coverage.)
Image credits: Bryce Durbin
