X1, a consumer fintech startup that recently launched an income-based credit card to the public, has raised an additional $15 million in funding.
This round draws attention for several reasons. On the one hand, The rise of consumer fintech in this environment is a bit counter to the narrative that startups in the space are generally struggling.
In addition, in particular, the latest financing of X1 comes just six months after the San Francisco-based company raised $ 25 million in a round of Series B in July. it's not alone No. a low or flat round, cash infusion increases the valuation of X1 by 50%, according to Deepak Rao, Co-Founder and CEO of X1.
Unfortunately, Rao declined to disclose the new valuation or the number of cardholders, but did share some other very interesting information about the company's financials. When X1 started raising for its Series B in late March or early April, it was bringing in about $1 million a month in revenue, he said. By October, the startup was generating around $3 million in revenue. With these numbers, the company's annual revenue run rate is $36 million. Very impressive for a company that only went live in private beta 13 months ago and released his credit card to the public in mid-September, after accumulating 600.000 people on its waiting list.
Gross merchandise value (GMV), also known as spend, has also risen, according to Rao, from $50 million in July to $55 million in October to $60 million expected this month. The company is projecting $1 billion in annualized spending by 2022.
That kind of rapid growth caught the attention of a number of investors, who approached X1Rao said in an interview.
“Since we feel we are one of the few companies in the consumer fintech space that is taking an interest and growing at a good pace and in a responsible manner, we thought we should capitalize on that.”
Your new investor Soma Capital led the B1 increase of X1, which Rao said was not an extension and closed in early November. In the last financing he also participated andhe founder and CEO of The Points Guy, brian kelly, and Cruise CEO Kyle vogt, raise the total of the round of the B series to 40 million dollars. The startup's long list of past backers include FPV, Craft Ventures, Spark Capital, Harrison Metal, SV Angel, Abstract Ventures, The Chainsmokers, Global Founders Capital, actor Jared Leto, Box co-founder and CEO Aaron Levie, Jeremy Stoppelman, Affirm and PayPal co-founder, Max Levchin and Y Combiner Partner Ali Rowghani.
X1 has raised over $60 million since its inception, included a $12 million Series A which closed in 2020 but was announced in January 2021.
Interestingly, X1 did not raise funds at all in 2021Instead, he chose to keep his "head down focused on long-term growth and customer value." This might actually have worked in the company's favor considering it was not among the many fintechs that went up to inflated valuations that they are currently trying to defend.
"There just aren't many companies with fair prices"Rao said.
Along with the increase in B1, X1 also announced the launch of a new investment platform.
The new trading platform will live within the X1 app and will roll out to a select number of cardholders in beta in the coming weeks. The plan is for it to be available to the general public at the end of the year or early January, depending on how the initial release goes. Unlike users of today's business applications, cardholders X1 with access will be able to purchase shares using the reward points earned.
Interchange fees on purchases represent the main source of revenue for X1. But it also makes money by giving users incentives, in the form of additional rewards, to buy directly from the in-app purchase portal using their card. When cardholders shop through that portal, X1 receive a commission from featured merchants, including Nike.com, Sephora, Kate Spade, Apple, Macy's, and Warby Parker, among others.
Plans X1 for its new capital are the market expansion, creating new products and recruiting your product and engineering teams. Currently, the company has 36 employees and Rao says all of its growth so far has been organic.
“We want to do things the right way and not get caught up in the hype cycle”, Dijo. “It is extremely critical for a consumer fintech business to meet all regulatory requirements and have all the foundations in place to build a long-lasting business.”
X1 It is not the only fintech company that has raised an upward round in recent months. TripActions, which in 2020 transitioned from a travel expense management company to a general corporate expense management startup, in October It raised a mix of equity and debt to a post-money valuation of $9.2 billion, up from its previous valuation of $7.500 billion.
