All brands will become fintechs.
We’re already seeing this evolution. Case in point: Companies of all kinds are clamoring to give us credit cards. Consumer behaviors have changed during the pandemic, and brands are realizing they need to reach customers in new ways. It just so happens that financial products offer a great way to expand the lifetime value of customers. We’ll only see more brands launch and scale lending products in the months and years to come. (Here’s more on the framework I use in thinking about fintech.)
This growing trend is one reason why we’re excited to lead the Series A financing for Canopy. In a few words, Canopy makes it easy for any brand to offer lending, and the rising interest from all brands in launching lending products makes Canopy’s platform more attractive than ever.
In the last few years, major brands (examples: Venmo, Chime, Apple, SoFi) have debuted financial products as they look to extend their relationship with customers. As these brands think through offering what credit products mean, ledger and loan servicing become key considerations, if not gating factors, to unlock true innovation. The ledger and servicing platform for loans are core to any credit product because running books on systems not expressly built for them creates immense compliance risk. Before Canopy, companies that wanted to offer lending products needed to either build their own ledger (painfully manual, complex, and risky) or partner with older players (for which the basic code was written decades ago) – translating respectively to staff costs for a backend team or vendor costs for lacking software.
Canopy is a fintech infrastructure company creating a modern servicing and ledger system for credit products. The platform enables the whole swath of fintechs – but also the brands that become fintechs – to launch innovative new credit products quickly and reliably. It’s a true infrastructure layer that unlocks product development, company creation, and market expansion for any company, usually partnering with customers in their earliest days and scaling with them. If successful, we believe Canopy will do for loan servicing what Alloy has done for KYC/identity, Marqeta for card issuing, and Bond for BaaS.
Co-founders Matt (CEO) and Will (CTO) have both lived the headache of current servicing technology after spending the last decade at large and small fintechs (GreenSky, Earnest, Capital One, Intuit). As engineers themselves, they’ve built Canopy for engineers, which is why the API-first approach is core to the platform. Canopy’s API is configurable, rules-based, and event-driven, built with an eye toward revolving credit, lines of credit, installment, and debt products. Said another way, the system flexes based on product needs. Canopy is also agnostic to whether customers assemble their own stack or use a fully integrated approach. It already enables customers to easily integrate with issuance solutions and payments processors including Galileo, i2c, Marqeta, Privacy.com, and Stripe, and has a number of other integrations in the works.
We believe Canopy’s potential to be massive and incredibly exciting. We’re excited to see what’s next.