There’s a real appetite for a fintech alternative to QuickBooks

Welcome to TechCrunch Fintech! This week, we’re looking at the continued fallout from Synapse’s bankruptcy, how Layer wants to disrupt SMB accounting, and much more!

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The big story

The prospects for troubled banking-as-a-service (BaaS) startup Synapse went from bad to worse last week when a U.S. Trustee filed an emergency motion asking to convert the company’s debt reorganization Chapter 11 bankruptcy into a liquidation Chapter 7 due to “gross mismanagement” of its estate. Apparently, up to 20 million fintech depositors are at risk as a result of the bankruptcy. As Fintech Business Weekly’s Jason Mikula reports, “Numerous end users of fintechs that have had their ability to access their funds frozen shared the devastating impact it has had on their lives with the court and the hundreds of attendees dialed in to the hearing [on Friday].” Sadly, the fallout from Synapse’s collapse continues.

Analysis of the week

There seems to be a real appetite for an alternative to QuickBooks, the legacy accounting alternative for SMBs, judging by the attention this story on Layer’s $2.3 million raise received. Layer is leaning into what it describes as a better user experience through embedded accounting. Its customers are those working with small and medium-sized businesses to offer accounting and bookkeeping features inside their own products. Better Tomorrow Ventures led the pre-seed investment into the startup and was joined by a group of executives at companies such as Square, Plaid, Unit and Check.

Dollars and cents

PayHOA, a previously bootstrapped Kentucky-based startup that offers software for self-managed homeowner associations (HOAs), is an example of how real-world problems can translate into opportunity. It just raised a $27.5 million Series A round in an environment where nearly $30 million Series A rounds are no longer common.

Buy now, pay later services have become so ubiquitous that BNPL may as well just be another way to say “debt.” But in Mexico, where BNPL platform Aplazo operates, a large underbanked population makes BNPL more like an alternative to cash. A recent $45 million Series B round led by QED Investors should help it further expand its reach, both virtual and physical.

Speaking of QED, it also led a $10 million round into Kudos, which uses artificial intelligence to figure out consumer spending habits so it can then provide more personalized financial advice.

Aeropay, a provider of pay-by-bank solutions for businesses that started out helping cannabis retailers and gaming companies with their payments, is now entering into Visa’s and Mastercard’s territory by innovating the payment networks. And it’s just raised $20 million in a Series B round.

What else we’re writing

The Consumer Financial Protection Bureau (CFPB) is suing SoLo Funds, a fintech company that enables peer-to-peer lending, alleging that the company used “digital dark patterns” to deceive borrowers and illegally took fees while advertising to consumers that there were no fees.

High-interest headlines

CFPB takes action against Chime Financial for illegally delaying consumer refunds

Deel partners with Carta to offer equity tax withholding features

Insurtech Cover Genius raises $80M in Series E funding  (TC covered its last raise here)

Yendo raises $165 million for ‘vehicle-secured’ credit card

FinLocker raises $17M in Series B funding round

Bunq enters insurance market via new partnership

Square adds new integrated solutions for restaurants

Embedded accounting startup Teal raises $8M

ICYMI: Baselayer raises $6.5M in seed funding

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