A small subset of customers storing money with fintech startup Copper are not able to access their deposit accounts due to a disruption involving embattled banking-as-a-service platform Synapse.
Copper is one of several companies affected by an ongoing fiasco at Synapse, which filed for bankruptcy last month. The company, which acts as a “middleware provider” between fintech startups and banks, was set to be acquired by TabaPay but TechCrunch reported that the deal fell through earlier this month.
Customers of Yotta Technologies and Juno Finance are also locked out of deposit accounts, Forbes reported Tuesday.
Copper launched four years ago with a banking platform targeted at teens and families. The company raised $29 million in 2022; at the time it had more than 800,000 users and was a finalist for Startup of the Year at the GeekWire Awards.
Copper CEO Eddie Behringer told GeekWire on Tuesday that the company was preparing to pivot away from banking services to focus on its newer “Earn” product that helps users make money from surveys and games.
But the plan accelerated earlier this month. In a message to customers on May 12, Behringer said the company would discontinue the debit card and deposit account offerings within 24 hours.
A week prior, “we learned that the banking middleware provider we utilize is sunsetting their service imminently,” Behringer wrote. “Despite our prior planning, this event has forced us to close banking accounts much sooner than anticipated.”
Then this past weekend, Copper sent an email to some customers, notifying them that there was a delay in delivering their funds.
“It impacted a really small number of people,” Behringer said on Tuesday.
Behringer said Copper acted quickly earlier this month to help a majority of their customers get access to funds, but some are still locked out.
Even with the shift away from banking services, Behringer said Copper is not deviating from its original mission of providing financial wellness and education.
“Moving forward, we’re going to continue to focus on providing not just teens and families, but all Americans the ability to earn money through Copper,” he said.
Copper’s revenue is up 160% year-over-year, primary driven by the “Earn” product.
The company plans to ink white-label partnerships with banks to generate software-as-a-service revenue.
“If you’re a large retail bank, and you’ve decided that you need to have financial education and a family banking product, you could actually take what we built, white-label it, and offer that to your customers,” Behringer said.
Behringer and Copper co-founder Stefan Berglund previously co-founded Snap Raise, a Seattle-based online fundraising platform for youth groups.
Copper has 30 employees and is hiring. Total funding to date is $42 million. Investors include Fiat Ventures, Panoramic Ventures, Insight Partners, Invesco Private Capital, PSL Ventures, Mana Ventures, Western Technology Investment, Clocktower Ventures, Index Ventures, Scout Fund, Launchpad Capital, Financial Venture Studio, Maven Ventures, Samsung Next and Arnold Ventures.
