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FINTECHFORBES ASIA FEBRUARY 20 20FRANCOVOGTFOR^ FORBESChoubey raised $1 million in seed funding and started
out offering free credit scores and micro-loans. But he
struggled to raise more money. Forty venture investors
turned him down, deeming his vision impractical and un-
focused. “I was laughed out of a lot of VC rooms in our early
days,” he recalls.
While Choubey banged unsuccessfully on VC doors, Mon-
eyLion putt-putted along, bringing in a little revenue from
loan interest and credit card ads and collecting a bunch of
data on consumer behavior. Finally, in 2016, he persuaded
Edison Partners to lead a $23 million investment. That en-
abled MoneyLion to add a robo-advisor service allowing
users to invest as little as $50 in portfolios of stocks and
bonds. In 2018, it added a free checking account and debit
card issued through Iowa-based Lincoln Savings Bank.
Managing rapid growth, while striving to keep costs low,
has proved tricky. MoneyLion was hit with a deluge of Bet-
ter Business Bureau complaints over the past spring and
summer. Some customers experienced long delays transfer-
ring their money into or out of MoneyLion accounts and,
when they reached out for help, got only computer-gen-
erated responses. Choubey says the software glitches havebeen fixed, and he has bumped up the number of customer-
service reps from 140 to 230.
Other neobanks have had operational growing pains too.
In October, San Francisco-based Chime, with 5 million ac-
counts, had technical problems that stretched over three
days. Customers were unable to see their balances, and
some were intermittently unable to use their debit cards.
Chime blamed the failure on a partner, Galileo Financial
Technologies, a platform used by many fintech startups to
process transactions.O
n a warm fall day Tim Spence speed-
walks through the towering, 31-story
Cincinnati headquarters of his employer,
Fifth Third, a 161-year-old regional bank
with $171 billion in assets. Clad in a plaid
sport jacket with no tie, Spence doesn’t look like a tradi-
tional banker.
He’s not. A Colgate University English literature and eco-
nomics major, Spence, now 40, spent the first seven years
of his career at digital advertising startups. He then moved
into consulting at Oliver Wyman in New York, advisingTim Spence, Fifth Third’s chief strategist, in the regional bank’s downtown Cincinnati headquarters. Most of his neobank competitors are losing money,
but “the lesson... learned from Facebook and Amazon and Google... is that the internet is amenable to a winner-take-all market structure.”