Amira Yahyaoui wants Mos to become a ‘radical’ fintech startup – TechCrunch

Startups

human rights activist and Mos founder Amira Yahyaoui couldn’t afford to go to college, so when she first launched a platform to match students with scholarships, the innovation felt full circle. Since its inception in 2017, Mos has provided access to a pool of more than $160 billion in financial aid to the more than 400,000 students in its community.

Now, hoping to break down yet another financial barrier she faced herself, Yahyaoui is expanding Mos into a challenger bank. It’s an evolution from Mos as an edtech company built to help students navigate their way through applying for jobs and going to college, to a fintech that can support the same user base across all of life’s equally complicated demands.

“We’re pretty radical about why we do what we do,” she said. “We don’t want to be elitist, we don’t want to do this for a very small category of people, because we really want to become the incumbent in the US,” Yahyaoui said, starting with college students. “That’s the goal.”

The goal convinced a slew of investors to compete for a spot in Mos’ latest funding round, a $40 million Series B that values ​​the company at $400 million, up from a May 2020 valuation of $50 million. round, led by Tiger Global with participation from Sequoia, Lux Capital, Emerson Collective, Plural VC and more, came together in less than 24 hours, Yahyaoui noted. She rejected multiple termsheets and didn’t use a pitch deck.

Mos’s first debit card has a few key features, including zero overdraft fees, late fees, or network ATM fees. There is also no minimum balance required to open a Mos account.

moss banking

Image Credits: Moss

“Students don’t have a lot of money, so they’re at the forefront of all kinds of abuse — overdraft, scams, everything,” she said. Sure, other fintechs have seen a similar opportunity to serve a vulnerable-yet-sticky population — given that a large proportion of students don’t change banks after graduation. Stride Funding and LeverEdge are taking on the student loan industry, Thrive Cash offers money based on offer letters and Frank, a financial aid tool for students, has just been acquired by JPMorgan Chase.

“I see it as JPMorgan, and all the banks, knowing that their future is different from their past,” she said. “Banks try to get relevant, but students don’t buy the BS that incumbents do.” Mos, meanwhile, has helped students unlock more than $1.5 billion in declared scholarship money as of last year.

Mos has historically built trust among students by increasing their purchasing power through scholarships, a relationship that Yahyaoui believes her team can compete with other fintechs. It’s a community-centric approach that we’ve seen in other industries: build a user base of people who trust and recognize you, then introduce them to products and services using language that resonates.

“We take care of you in those early years of adulthood, and in the future we will grow up with you because you drop out of school, have apartments, rent and rent,” she added.

Amira Yahyaoui, the founder of Moss. Photo credits: Cayce Clifford.

Deena Shakir of Lux Capital, who took part in the round, said banking has always been “the missing piece” of Moss. She originally thought that Mos could expand in a lot of different ways, taking on other aspects of public information or serving as a platform for other financial instruments aimed at students. Now, with the network effects of those early years, she thinks it’s ready for the unsurprisingly natural next step.

“Instead of being a player tangentially on the side of financial access and inclusion, they recognize that they have the unique opportunity to be the primary bank, credit card and home port. [for] their students,” she says.

Beyond the mission, the startup’s new goal could bring in some solid revenue. Mos originally made money through fees for accessing his scholarship pool. Now the startup makes money through interchange fees, and that knowledge is free for anyone who starts an account. Yahyaoui said Mos is currently making “a few million” from ARR, but the TAM has exploded since going the challenger bank route. “Our market cap is ten times higher than before,” she said.

In the future, Mos will create a range of products that students can pay to access, such as more hands-on advisor consultations or specific banking features.

A question for all fintechs, as underlined by PayPal’s recent earnings, is the long-term quality of its users. Moss experienced a huge growth peak around November, a few months after it launched its debut debit card. While Yahyaoui declined to share specific growth metrics given the competitive fintech landscape, she did share that more than 100,000 students had opened accounts with Mos in the first quarter of its launch. She estimates Moss’ growth makes it the tenth largest neobank in the United States.

Whether those referrals are sticky customers, or just students making their way through college, remains to be seen. Giveaways and referral bonuses are exciting, but do they move the needle in the long run?

Julieta Silva, a first-generation college student, grew up in a small Texas town. Her entire school of 500 people had one academic counselor, so she got most of her senior help on TikTok. (Indeed, MOS’s social media platform has more than 52,000 followers on its account.) She first joined the platform in August 2020 to unlock scholarship money, but the platform has evolved into a “simpler version of the complicated banking system.” ‘. The student, now a freshman at Northeastern University, still uses her Bank of America card, but relies on the Mos card for everyday expenses. She earns referral money if she can get her friends to sign up.

“It’s still not used prominently on campus, but every time I use my card… people ask me” [about it],” she said. “So then I tell them all the little perks, and the thing that really grabs their attention is the financial advisor and the help with funding their college.”

Image Credits: Moss

The co-founder, meanwhile, has been paying attention to what attracts buzz, like NFTs or credit cards with nice branding (and weight!). But with the backing and support of a new venture, she is going to build for the masses.

“I wish I only had to convince 1,000 geeks,” Yahyaoui said. “But we have to convince 20 million students.”

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