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FINTECHFORBES ASIA FEBRUARY 20 20“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 Edison
Partners and Capital One, valued the company at nearly
$700 million. By mid-2020, he predicts, MoneyLion will
be breaking even. A government-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 es-timates there are 5,000 startups worldwide offering new
and traditional financial services, up from 2,000 just three
years ago. In the first nine months of 2019, venture capital-
ists poured $2.9 billion into neobanks, compared with $2.3
billion 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 tradition-
al 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 An-
gela Strange, a general partner at California-based venture
capital firm 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
Federal Deposit Insurance Corporation, checking ac-
counts with debit cards, ATM access, credit cards, cur-
rency transactions and even paper checks. That frees fin-
tech entrepreneurs to cultivate their niche, no matter how
small or quirky.
Take Dave, a little app that rescues folks from chronic
bank overdraft fees. Created by a 34-year-old serial entre-
preneur named Jason Wilk who had no prior experience in
financial services, 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.→ “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
District, 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.