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AI comes to expense reports



Welcome to The Interchange! If you received this in your inbox, thank you for signing up and your vote of confidence. If you’re reading this as a post on our site, sign up here so you can receive it directly in the future. Every week, I’ll take a look at the hottest fintech news of the previous week. This will include everything from funding rounds to trends to an analysis of a particular space to hot takes on a particular company or phenomenon. There’s a lot of fintech news out there and it’s my job to stay on top of it — and make sense of it — so you can stay in the know. — Mary Ann

Hello, and welcome back. We finally got our power restored after the ice storm and I’m feeling better after coming down with a cold — but since I’m still not operating at full capacity, this newsletter will be a bit abbreviated.

Rebrands are not uncommon in the startup world, and the fintech space is no exception. They are particularly more prevalent when companies pivot to adapt to external circumstances. Last week, TripActions announced it was rebranding and is now called Navan.

I, for one, wasn’t at all surprised by the news since TripActions pivoted from being a travel expense management company to a corporate card and expense management for enterprises more generally soon after the COVID-19 pandemic hit in March 2020. In 2021, CEO and co-founder Ariel Cohen told me that its revenue didn’t just drop — it bottomed out . . . to zero. That’s when execs decided to focus its efforts on its then-new Liquid offering, which appears to have worked out pretty well for the company. In October, amid its continued growth, the company raised $154 million in equity at a post-money valuation of $9.2 billion, up from its prior valuation of $7.5 billion, as well as a $150 million structured financing deal from Coatue. Then in December, it secured $400 million in credit facilities from Goldman Sachs and Silicon Valley Bank (SVB).

Its rebrand is more than just a name change, apparently. The company said it has now unified its travel, corporate and expense offerings into “a single super application.” On top of that, Navan — a combination of navigate and avant (or forward) — claims to be the first travel company to integrate OpenAI and ChatGPT APIs across its infrastructure and product set.

The company says it is currently using the generative AI technology to write, test, and fix code with the aim of increasing its operational efficiency and reducing overhead. So now, through Ava — Navan’s virtual assistant — travel managers are able to personalize recommendations and increase traveler engagement, execs claim. They say also that admins can use the tool as a personal assistant to perform tasks such as performing personalized data analysis, providing granular carbon emission details or ordering corporate cards for their company. Meanwhile, travelers can do things like perform a travel search, solve customer support issues and even recommend an Indian restaurant near their hotel in London, for example.

A company spokesperson told me via email: “Program admins will be able to ask Ava for reporting across the travel and spend programs, whether that is via text, graph, PDF, etc.  We also use AI to do everything from the elimination of expense reporting to automate itemization — and in the case of hotel folios, we instantly fetch it from the hotel after a stay, categorize line items, compare that against company policy, and submit for the user, so there’s no need for them [to] move pennies around in order to balance out a folio — a process that’s pretty painful in my experience.”

Personally, we’ve been wondering at TC when generative AI was going to impact the fintech space, so I’m intrigued by this move on TripAction’s — I mean Navan’s — part.

But I should point out Navan wasn’t the only company in the financial services space that announced it was incorporating AI into its products.

Last week, TechCrunch’s Sarah Perez reported that Microsoft and American Express announced they were teaming up to put AI to work “to aid with the frustrating and laborious task of filing and auditing corporate expense reports.” She wrote: “The companies agreed to expand their decades-long partnership to build solutions that leverage Microsoft Cloud and AI technologies, starting with expense report management. According to Amex, the initial solution will leverage machine learning and AI to automate expense reporting and approvals.” Notably, though, Amex says the AI is something it built in-house — it’s not leveraging Microsoft’s partnership with OpenAI but is using Microsoft Cloud. You can read more about that deal here.

Fascinating! I expect we’ll only be hearing more about AI being incorporated in the world of financial services.

More layoffs

Last week, Affirm announced that it was reducing its staff by 19% and shutting down its crypto unit. It also missed analysts’ estimates on its revenue and earnings. All this news led to a sharp drop in its stock price. It’s further evidence that buy now, pay later as a space is struggling. I plan to get into that more next week, so stay tuned.

Gusto also slashed jobs — laying off 126 people last week. Last May, TechCrunch had reported that the HR technology unicorn, which was worth nearly $10 billion at that time, raised an extension to its 2021-era Series E funding round. That funding event included $175 million in primary capital, a tranche of secondary shares and a tender offer.

Ironically, TC’s Natasha Mascarenhas explains, late last month, Gusto’s editor-in-chief wrote about the topic of layoffs — and the silver lining ahead for small businesses looking to scoop up talent.

“Call me cynical, but in the end, a big business will always choose itself over scores of its employees. It’s just the nature of the beast. Small businesses need to use this fact to their advantage.”

TechCrunch reached out to Gusto for comment and was told that the cuts represented about 5% of the workforce. A spokesperson also told me: “All employees were notified by email. Impacted employees also received a text pointing them to the email.” One employee, who wished to remain anonymous, said the move came as a surprise since the company claims that it is in “stable financial condition.” The same employee cited a toxic work culture, a sentiment that was echoed by some users of Blind.

Weekly news

According to Axios: “Robinhood announced it plans to buy back shares from Sam Bankman-Fried’s Emergent Fidelity Technologies. That particular Robinhood stake is currently in legal hell after FTX’s implosion. Robinhood’s board has authorized the purchase of “most or all” of the 55 million shares Emergent Fidelity Technologies acquired last year, it said in its earnings report Wednesday. Emergent Fidelity Technologies was formed to buy a 7.6% in Robinhood in early 2022. Now however, the stake is being disputed by several players.” Ouch. I’m sure Robinhood didn’t anticipate this when giving up those shares.

Pie Insurance, which provides workers’ compensation insurance to small businesses, announced that it has completed its transition to a “rated, full-stack carrier.” Pie will begin issuing its own insurance policies later this year following the recent acquisition of a nationally licensed insurance company (previously the American Insurance Company), now renamed the Pie Insurance Company. We last covered Pie in September when it raised a $315 million Series D. Pie also expanded into commercial auto insurance as the MGA for Ford Motor Credit Company through the launch of Ford Pro Insure.

From Manish Singh: “Fintech Kissht and PayU’s LazyPay are among the apps that India’s IT Ministry has blocked in the ongoing crackdown as New Delhi moves to curb the misuse of consumers’ data and protect the nation’s integrity.” More here.

PayPal’s stock is up once again. The company announced during its fourth-quarter earnings announcement that longtime CEO Dan Schulman plans to retire at the end of the year. But its earnings topped analysts’ estimates. Last week, we wrote about the company’s plans to lay off 2,000 employees.

In July 2022, Brazilian fintech launched novücard, a credit card in Brazil that has a “dynamic” credit limit, with the ability to see the limit adjusted upward and downward automatically based on usage and payment timeliness. A company spokesperson told me that since that launch, novücard has grown to 150,000 new clients, “making it the fastest growing credit card in Brazil.” She added: “As many as 3,000 new customers per day are obtaining a new novücard. The company expects this figure will grow, boosted primarily by word of mouth — and that the number of customers will increase to 2 million by the end of 2023.” Founded by American Brad Liebmann, fintech has 130 employees based primarily in São Paulo and São Carlos. The company raised $5.5 million in seed funding in May of 2021.

Fundings and M&A

Former Gemini CTO launches Fierce, a high-yield finance super app

New social investment platform Follow taps influencers to mirror their investment strategies

SUMA Wealth acquires Reel to close the U.S. wealth gap. Christine covered last year:

Sequoia Capital Southeast Asia backs cross-border payments startup Tazapay

Investment platform Moonfare caps Series C extension at $15M

That’s it for this week. Thanks once again for hanging in there with me, and I hope to be back at you at full speed next week. Enjoy the rest of your weekend! xoxo, Mary Ann


Just 7 days until the TC Early Stage early bird flies away



Budget-minded entrepreneurs and early-stage startup founders take heed — this is no time to procrastinate. We have only 7 days left of early-bird pricing to TechCrunch Early Stage 2023 in Boston on April 20.

Don’t wait…the early bird gets the…SAVINGS: Buy a $249 founder pass and save $200 before prices increase on April 1 — that’s no joke.

TC Early Stage is our only event where you get hands-on training with experts to help your business succeed. No need to reinvent the startup wheel — you’ll have access to leading experts across a range of specialties.

During this one-day startup bootcamp, you’ll learn about legal issues, fundraising, marketing, growth, product-market fit, pitching, recruiting and more. We’re talking more than 40 highly engaging presentations, workshops and roundtables with interactive Q&As and plenty of time for networking.

Here are just a few examples of the topics we have on tap. You’ll find plenty more listed in the event agenda.

How to Tell Your TAM: Dayna Grayson from Construct Capital invests in the rebuilding of the most foundational and broken industries of our economy. Industries such as manufacturing and logistics, among others, that formed in an analog world have been neglected by advanced technology. Dayna will talk about how, beyond the idea, founders can pitch investors on their TAM, including how they will wedge into the market and how they will eventually disrupt it.

How to Think About Accelerators and Incubators: Founders often hear they should get involved with an incubator or accelerator, but when is the “right” time for early-stage founders to apply to these types of startup support ecosystems, and how can they best engage if accepted? In this talk, Harvard Innovation Labs executive director Matt Segneri will cover everything from the types of incubators and accelerators available to early-stage founders, to what startups should consider before applying, and tips for getting the most out of these ecosystems.

How to Raise Outside of SV in a Down Market: Silicon Valley’s funding market tends to be more immune to macroeconomic conditions than elsewhere in the world. So how do you raise outside the Valley bubble? General Catalyst’s Mark Crane has ample experience on both the founder and VC side from all over Europe, as well as a firm understanding of the funding landscape in the northeastern U.S., so he’ll give practical advice on how to stay alive and thrive.

At TechCrunch Early Stage you’ll walk away with a deeper working understanding of topics and skills that are essential to startup success. Founders save $200 with an early-bird founder ticketcollege students pay just $99!

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Twitter will kill ‘legacy’ blue checks on April 1



Twitter has picked April Fool’s Day, otherwise known as April 1, to start removing legacy blue checkmarks from the platform.

Despite the significance of the day Twitter chose, the removal of legacy checkmarks has been anticipated for months now. Musk tweeted in December that the company would remove those checks “in a few months” because “the way in which they were given out was corrupt and nonsensical.”

Since then, legacy blue checkmark holders have been seeing a pop-up when they click on their checkmark that reads, “This is a legacy verified account. It may or may not be notable.”

Before Musk acquired the company, Twitter used checkmarks to verify individuals and entities as active, authentic and notable accounts of interest. Verified checkmarks were doled out for free.

Today, Twitter users can purchase a blue check through the Twitter Blue subscription model for $8 per month (iOS and Android signups will cost $11 per month, due to app store costs). There are also other checkmark colors and badges available for purchase to denote whether an account is a business or a government, for example.

Twitter says the purchase of a checkmark gives users access to subscriber-only features like fewer ads on their timeline, prioritized ranking in conversations, bookmark folders, and the ability to craft long tweets, edit tweets and undo tweets.

The news comes within hours of Twitter also announcing the availability of the Blue subscription globally.

Twitter did not respond to TechCrunch’s request for more information about how many users have already signed up for Twitter Blue.

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Roofstock, valued at $1.9B last year, cuts 27% of staff in second round of layoffs



Proptech company Roofstock has laid off about 27% of its staff today, according to an email sent to employees viewed by TechCrunch. The cuts come just five months after the startup laid off 20% of its workforce.

The company’s website states that it has 400+ employees, or “Roofsters” as they’re dubbed, but it is not known if that figure is current.

Roofstock, an online marketplace for investing in leased single-family rental homes, one year ago raised $240 million at a $1.9 billion valuation. SoftBank Vision Fund 2 led that financing, which included participation from existing and new backers including Khosla Ventures, Lightspeed Venture Partners, Bain Capital Ventures and others. Roofstock has raised a total of over $365 million in funding since its 2015 inception, per Crunchbase.

According to the email seen by TechCrunch, co-founder and CEO Gary Beasley said today’s reduction in force (RIF) was “in response to the challenging macro environment” and the “negative impact” it is having on Roofstock’s business.

He added that the company was not expecting to have to cut more staff so soon but that it needed to “right size” in an effort “to reduce cash burn rate” and ensure it has “adequate capital runway until the market eventually turns.”

Beasley sent the email because apparently, the Zoom meeting where it was addressed “maxed out on attendees.”

Oakland, Calif.-based Roofstock lets people buy and sell rental homes in dozens of U.S. markets. The premise behind the company is that both institutional and retail investors can buy and sell homes without forcing renters to leave their homes. Meanwhile, buyers can also presumably generate income from day one. 

At the time of its raise in March 2022, the company said that it had facilitated more than $5 billion in transaction volume, more than half of which had come from the last year alone.

Just days before its last round of layoffs last year, Roofstock made headlines for selling its first single-family home using NFTs, or non-fungible tokens.

Rising mortgage rates and a slowdown in the housing market led to challenges for many real estate technology companies in 2022 that continue this year. Opendoor, Redfin, Compass, and Homeward were among the other startups that also laid off workers. IBuyer Reali also announced it was shutting down after raising $100 million the year prior.

TechCrunch has reached out to Roofstock but had not heard back at the time of writing but multiple sources confirmed that layoffs had taken place today.

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