Cushion, a financial technology startup that referred to itself as the “Plaid for buy now, pay later (BNPL),” has officially ceased operations.
On Thursday, Paul Kesserwani, the founder and CEO, shared on LinkedIn that the decision to wind down the company will take effect at the end of 2024.
In his post, Kesserwani stated that “despite launching several innovative fintech products,” Cushion “was unable to achieve the necessary scale to maintain operations.”
Founded in late 2016 and based in San Francisco, Cushion had garnered a total of $21.6 million in investment from various backers, including Afore Capital, Flourish Ventures, Vestigo Ventures, Better Tomorrow Ventures, and 500 Global.
The startup’s last announced funding round occurred in May 2022, when it secured $12 million in Series A funding. According to PitchBook, its post-money valuation for 2022 stood at $82.4 million.
Kesserwani did not immediately reply to TechCrunch’s inquiry for further comment.
Cushion provided an app that aggregated users’ transaction histories from their bank accounts, identified imposed fees, and negotiated refunds on their behalf. The app was engineered, as Kesserwani explained to TechCrunch in 2019, to align incentives with consumers by charging a commission only on any refunded cash.
The concept for Cushion blossomed when Kesserwani, after leaving his position at Twitter, was reflecting on his next steps. While he was assisting his parents in managing their bank accounts during their work trip to Lebanon, their inability to access their accounts led to a cascade of banking fees. This experience prompted Kesserwani to investigate his own finances, revealing that he too had incurred nearly $400 in unexplained fees.
In his LinkedIn announcement, Kesserwani noted that Cushion had automated the negotiation of bank fees, achieving $3 million in annual recurring revenue (ARR) within just ten months, and managing over $300 million in BNPL loans. He also stated that the company had welcomed over one million consumers over time, with more than 200,000 among them as paid customers.
Kesserwani expressed: “I dedicated over 8 years to Cushion. While the outcome was not what we envisioned, we created something that advanced the industry, and I take pride in that. I am now eager for what lies ahead.”
Data indicates that 2025 is anticipated to be another challenging year for startup closures. In late December, another fintech company, Bench, abruptly shut down, only to be acquired shortly after.
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