Cushion, a fintech startup that referred to itself as the “Plaid for buy now, pay later (BNPL),” has ceased operations.
On Thursday, founder and CEO Paul Kesserwani announced on LinkedIn that the decision to wind down the company would take effect at the end of 2024.
In his post, Kesserwani expressed that “despite launching several new fintech products,” Cushion “was unable to achieve the necessary scale to maintain operations.”
Established in late 2016, Cushion, which is based in San Francisco, had secured a total of $21.6 million from various investors such as Afore Capital, Flourish Ventures, Vestigo Ventures, Better Tomorrow Ventures, and 500 Global.
The company’s most recent public funding round occurred in May 2022 when it successfully closed a $12 million Series A led by Afore Capital. According to PitchBook, its valuation following the Series A funding was $82.4 million in 2022.
Kesserwani has not responded promptly to StartupSuperb’s request for further comments.
Cushion provided a consumer application that consolidated transaction history from users’ bank accounts, identified any incurred fees, and carried out negotiations on their behalf to obtain refunds. Kesserwani mentioned in a prior interview with StartupSuperb in 2019 that the service was structured to align incentives with consumers by only charging a commission on any refunded money.
The inspiration for Cushion came to Kesserwani after he left his position at Twitter. During a reflective period away from work, he assisted his parents with their bank accounts while they were on a business trip in Lebanon. Due to security protocols of the bank, his parents were unable to access their accounts in Lebanon, leading to a significant accumulation of banking fees as their accounts went unmonitored. Consequently, when Kesserwani examined his own banking experience, he discovered he too had paid around $400 in fees without recollection of consenting to them.
In the LinkedIn announcement, Kesserwani highlighted that Cushion had automated the process of negotiating bank fees, attaining a remarkable $3 million in Annual Recurring Revenue (ARR) within 10 months while managing over $300 million in BNPL loans. He added that the enterprise had served over 1 million consumers, with more than 200,000 being paying customers.
Kesserwani noted: “He dedicated everything to Cushion over the span of eight years. Even though the final result was not what was anticipated, they developed something that advanced the industry, and he takes pride in that. He is also looking forward to future opportunities.”
Reports indicate that 2025 is anticipated to be another challenging year for startup closures. In late December, another fintech, Bench, unexpectedly shut down only to be acquired days later.
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