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FORBES.COM NOVEMBER 30, 20 19THETRENDFINTECH50“The promise of MoneyLion is to be the wealth manager,
the private bank for the $50,000 household,” Choubey says.
At last count, MoneyLion’s app had 5.7 million users, up
from 3 million a year ago, and a million of those are paying
customers. Those people, many from places like Texas and
Ohio, fork over $20 per month to maintain a MoneyLion
checking account, monitor their credit score or get a small
low-interest loan. In all, MoneyLion offers seven financial
products, including unexpected ones like paycheck advanc-
es and, soon, brokerage services. Choubey expects revenue
of $90 million this year, triple last year’s $30 million. His
last round of financing, when he raised $100 million from
investors including Princeton, New Jersey-based Edison
Partners and McLean, Virginia-based Capital One, valued
the company at nearly $700 million. By mid-2020, he pre-
dicts, MoneyLion will be breaking even. An FDIC-insured
high-yield savings account will be rolled out soon, while
credit cards are on the schedule for later in 2020. To retain
customers, he says, “we have to be a product factory.”
Like most other entrepreneurs, Choubey thinks his com-
pany’s potential is essentially unlimited. But having spent a
decade as an itinerant investment banker at Citi, Goldman,
Citadel and Barclays, he’s also a guy who knows how far a
horizon can realistically stretch. And he is far from the only
one to see the opportunity for upstart digital-only banks—
so-called neobanks—to transform retail banking and create
a new generation of Morgans and Mellons. “I just heard a
rumor that Chime is getting another round at a $5 billion
valuation,” he says.
Globally, a vast army of neobanks are targeting all sorts
of consumer and small-business niches—from Millennial
investors to dentists and franchise owners. McKinsey esti-
mates there are 5,000 startups worldwide offering new andtraditional financial services, up from 2,000 just three years
ago. In the first nine months of 2019, venture capitalists
poured $2.9 billion into neobanks, compared with $2.3 bil-
lion in all of 2018, reports CB Insights.
Underlying this explosion is new infrastructure that
makes starting a neobank cheap and easy, plus a rising
generation that prefers to do everything from their phones.
While it can take years and millions in legal and other costs
to launch a real bank, new plug-and-play applications en-
able a startup to hook up to products supplied by traditional
banks and launch with as little as $500,000 in capital.
“Now you can get your [fintech] company off the ground
in a matter of a few months versus a few years,” says Angela
Strange, a general partner at Andreessen Horowitz, who sits
on the board of Synapse, a San Francisco-based startup whose
technology makes it easier for other startups to offer bank
products.
Using such middleman platforms, tiny neobanks can offer
big-bank products: savings accounts insured by the FDIC,
checking accounts with debit cards, ATM access, credit
cards, currency transactions and even paper checks. That
frees fintech entrepreneurs to concentrate on cultivating
their niche, no matter how small or quirky.
Take “Dave.” Dave (yep, that’s its real name) is a little app
that rescues folks from the pain of chronic bank overdraft
fees. Created by a 34-year-old serial entrepreneur named
Jason Wilk who had no prior experience in financial servic-
es, Dave charges its users $1 a month and, if they seem likely
to overdraw, instantly deposits up to $75 as an advance. Nice
little business, but nothing to give Bank of America jitters.
But then Wilk decided to turn Dave into a neobank. In
June, using Synapse, Dave rolled out its own checking ac-
count and debit card. Now it can make money on “inter-→ “The sky is the limit,” gushes
MoneyLion founder and CEO
Dee Choubey as he strolls into
Manhattan’s Madison Square Park,
the oak and ash trees turning color in
the October sunshine.
Choubey, 38, is taking a midday constitutional from MoneyLion’s cramped offices in the Flatiron Dis-
trict, where 65 people labor to reinvent retail banking for the app generation. He ticks off a couple
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.