"Post-Eight-Year Absence, Cushion Shutters Return"
In a surprising turn of events, the fintech company Cushion has announced its shutdown, joining a growing list of fintech firms that have closed their doors in 2024. The news was broken by Cushion's CEO, Paul Kesserwani, on LinkedIn, marking the end of a journey that began in 2016.
Cushion, initially founded as an overdraft fee negotiation fintech, pivoted to helping consumers manage buy now, pay later (BNPL) loans and other bills in 2020. The company processed over $300 million in BNPL loans and 30 million emails, offering a credit-building virtual payment card as part of its services.
The company's valuation, according to PitchBook, reached $82.4 million with its latest investment. However, despite this impressive growth, Cushion was unable to sustain its business post-2022 valuation. The tech industry has been hit hard by layoffs and financial retrenchment, and it appears that Cushion was not immune to these challenges.
Kesserwani, in his LinkedIn post, did not elaborate on the specific reasons for the shutdown. However, the context of the challenging macroeconomic environment for fintech startups and the widespread tech layoffs suggests that financial sustainability issues were involved.
Several other fintech firms have also conducted layoffs in 2024, including credit card debt management platform Tally. While the precise reasons for Tally's shutdown are not confirmed, it is likely that the company faced similar challenges common to fintech firms grappling with economic and regulatory headwinds.
Cushion's founder, Paul Kesserwani, did not return a request for comment. Despite this, it is clear that the decision to wind down the firm was made at the end of last year.
Cushion's demise aligns with expectations laid out in the F-Prime Capital's 2024 State of Fintech report, which predicted a tough year for the sector. The report highlighted the need for fintech companies to adapt and innovate in order to survive in the current market conditions.
As Cushion joins the ranks of the closed fintech firms, it serves as a reminder of the challenges facing the industry. However, it also presents an opportunity for other companies to learn from Cushion's experience and adapt to the changing market dynamics.
[1] Data sourced from various financial news outlets and reports.
Businesses in the fintech industry faced a challenging year in 2024, with numerous firms announcing closures, including Cushion. Despite securing impressive growth, Cushion, initially an overdraft fee negotiations fintech, encountered financial sustainability issues post-2022 valuation and was unable to continue investing in its services, such as managing buy now, pay later loans and offering a credit-building virtual payment card.
