Braid, Backed By Index And Accel, Unexpectedly Ceases Operations


Fintech startup Braid, which aimed to revolutionize shared wallets, has recently announced its closure. The San Francisco-based company, founded in January 2019 by Amanda Peyton and Todd Berman, sought to provide consumers with a user-friendly platform to pool, manage, and spend money together. However, after a four-year run, Braid determined that it would not be able to sustain itself as a viable business venture.

Key Takeaway

Braid, a consumer payments startup, has shut down its operations after facing challenges with a sponsor bank and struggling to find long-term success. The company aimed to provide users with an FDIC-insured, multi-user account for shared expenses.

The Journey and Challenges of Braid

Braid managed to secure a total of $10 million in funding across several rounds, with support from investors such as Index Ventures and Accel. Despite this financial backing, the company faced a series of hurdles that ultimately led to its closure.

Struggles with Sponsor Bank

According to Amanda Peyton’s blog post, Braid experienced significant setbacks after encountering issues with a sponsor bank. This unfortunate turn of events resulted in the company effectively being non-operational from July 2022 to January 2023. Without the necessary banking partnership, Braid found itself in a state of limbo.

In an attempt to overcome these challenges, Braid eventually secured a new sponsor bank. However, this did not rectify the underlying issues, and the company continued to face difficulties.

The Pitfalls of Relying on Third-Party Software

One key lesson learned from the Braid experience was the potential downside of relying heavily on third-party software. As Braid aimed to provide a unique multiplayer offering, it became apparent that off-the-shelf solutions could not adequately support their vision. Each additional software partner introduced potential complications and further strained the company’s resources.

Amanda Peyton emphasized the importance of being close to the development process to ensure a seamless user experience. Braid found that building in-house solutions using tools like Retool was more cost-effective and allowed for greater control over their unit economics.

Looking Ahead

Despite the unfortunate outcome for Braid, Amanda Peyton remains optimistic about the fintech industry’s potential. Following the company’s closure, she acquired Braid’s intellectual property in an auction. Her experience in the sector, including previous ventures such as Grand St. and Y Combinator-backed startups, has given her a deep appreciation for the opportunities within the fintech landscape.

While the Braid journey may have come to an end, it serves as a reminder of the challenges that entrepreneurs face in the startup ecosystem. Failure, though difficult, is an integral part of the innovation cycle. As Amanda Peyton reflects on her experience, she believes that sharing stories of failure is just as important as celebrating successes.

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