Page 98 - Forbes - USA (November 2019)

→ “The sky is the limit,” gushes

MoneyLion founder and CEO

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Dee Choubey as he strolls into

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Manhattan’s Madison Square Park,
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N the oak and ash trees turning color in
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the October sunshine.
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T Choubey, 38, is taking a midday constitutional from MoneyLion’s cramped offices in the Flatiron Dis-

E trict, where 65 people labor to reinvent retail banking for the app generation. He ticks off a couple
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T businesses he looks up to—ones that have fundamentally changed the way money flows around the
world—putting his ambitions for his six-year-old startup into sharp relief. “PayPal,” he says. “Square.”
Two companies worth a combined $150 billion.

“The promise of MoneyLion is to be the wealth manager, traditional financial services, up from 2,000 just three years
the private bank for the $50,000 household,” Choubey says. ago. In the first nine months of 2019, venture capitalists
At last count, MoneyLion’s app had 5.7 million users, up poured $2.9 billion into neobanks, compared with $2.3 bil-
from 3 million a year ago, and a million of those are paying lion in all of 2018, reports CB Insights.
customers. Those people, many from places like Texas and Underlying this explosion is new infrastructure that
Ohio, fork over $20 per month to maintain a MoneyLion makes starting a neobank cheap and easy, plus a rising
checking account, monitor their credit score or get a small generation that prefers to do everything from their phones.
low-interest loan. In all, MoneyLion offers seven financial While it can take years and millions in legal and other costs
products, including unexpected ones like paycheck advanc- to launch a real bank, new plug-and-play applications en-
es and, soon, brokerage services. Choubey expects revenue able a startup to hook up to products supplied by traditional
of $90 million this year, triple last year’s $30 million. His banks and launch with as little as $500,000 in capital.
last round of financing, when he raised $100 million from “Now you can get your [fintech] company off the ground
investors including Princeton, New Jersey-based Edison in a matter of a few months versus a few years,” says Angela
Partners and McLean, Virginia-based Capital One, valued Strange, a general partner at Andreessen Horowitz, who sits
the company at nearly $700 million. By mid-2020, he pre- on the board of Synapse, a San Francisco-based startup whose
dicts, MoneyLion will be breaking even. An FDIC-insured technology makes it easier for other startups to offer bank
high-yield savings account will be rolled out soon, while products.
credit cards are on the schedule for later in 2020. To retain Using such middleman platforms, tiny neobanks can offer
customers, he says, “we have to be a product factory.” big-bank products: savings accounts insured by the FDIC,
Like most other entrepreneurs, Choubey thinks his com- checking accounts with debit cards, ATM access, credit
pany’s potential is essentially unlimited. But having spent a cards, currency transactions and even paper checks. That
decade as an itinerant investment banker at Citi, Goldman, frees fintech entrepreneurs to concentrate on cultivating
Citadel and Barclays, he’s also a guy who knows how far a their niche, no matter how small or quirky.
horizon can realistically stretch. And he is far from the only Take “Dave.” Dave (yep, that’s its real name) is a little app
one to see the opportunity for upstart digital-only banks— that rescues folks from the pain of chronic bank overdraft
so-called neobanks—to transform retail banking and create fees. Created by a 34-year-old serial entrepreneur named
a new generation of Morgans and Mellons. “I just heard a Jason Wilk who had no prior experience in financial servic-
rumor that Chime is getting another round at a $5 billion es, Dave charges its users $1 a month and, if they seem likely
valuation,” he says. to overdraw, instantly deposits up to $75 as an advance. Nice
Globally, a vast army of neobanks are targeting all sorts little business, but nothing to give Bank of America jitters.
of consumer and small-business niches—from Millennial But then Wilk decided to turn Dave into a neobank. In
investors to dentists and franchise owners. McKinsey esti- June, using Synapse, Dave rolled out its own checking ac-
mates there are 5,000 startups worldwide offering new and count and debit card. Now it can make money on “inter-

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