Miami-based Onyx Private, a Y Combinator-backed digital financial institution that supplied banking and funding companies for high-earning Millennials and Gen Zers, is terminating its financial institution operations.
In a March 13 electronic mail to a buyer seen by TechCrunch, with a topic line that learn: “Important Notice: Termination of Bank Operations and Account Closure” Onyx wrote, “We are writing to inform you of our decision to discontinue our services and initiate the closure of all associated accounts starting today.”
Co-founder and CEO Victor Santos confirmed to TechCrunch that the corporate was “moving away from the B2C model” however stated that it was altering its enterprise mannequin, not shutting down.
Y Combinator has listed the corporate as “inactive” on its website, one thing Santos couldn’t clarify. (Replace: The textual content has since been up to date post-publication).
He stated Onyx will likely be shifting to a “B2B white-label platform-as-a-service model for community banks, regional banks, and credit unions” that wish to launch digital apps constructed for younger prosperous shoppers. Santos claimed that Onyx had been exploring the thought over the previous 12 months and had made developments with some companions.
Lower than a 12 months in the past in Could, the startup introduced that it had raised $4.1 million in venture funding from buyers resembling Village International, Y Combinator, International Founders Capital, One Method Ventures, 186 Ventures and Olive Tree Capital. At the moment, the corporate stated that since its launch practically a 12 months prior, Onyx Personal – which stated it needed to be the “next generation UBS” – had grown 30% month-over-month and was processing over $4 million in transaction fee worth monthly. It additionally claimed to be nearing $5 million in TPV (complete fee quantity).
Santos at this time declined to reveal what number of banking clients Onyx had. Though a supply instructed TechCrunch that regulatory points could have performed a component on this resolution, Santos dismissed that, telling us that no regulatory points brought about the startup to close down its direct-to-consumer banking operations.
He added: “It was purely a strategic decision that allowed us to leverage the base of existing FIs [financial institutions] and use the technology we have built to scale in a more capital-efficient manner.”
On the time of its fundraise, the corporate had named Piermont Financial institution as its banking accomplice. At present on its website, Onyx says that “banking services [are] provided by i3 Bank.” Santos instructed TechCrunch that Onyx “started with Piermont but transitioned last year to i3.”
Piermont declined to remark. TechCrunch has reached out to i3 for remark.
Within the electronic mail, banking clients had been instructed that the shut-down will happen on April 14 however that “cessation of our rewards program” was “effective immediately.”
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