Cushion, a fintech startup that positioned itself as the "Plaid for buy now, pay later (BNPL)," has officially shut down after struggling to scale.
On Thursday, founder and CEO Paul Kesserwani shared on LinkedIn that the company would cease operations by the end of 2024, marking the end of its eight-year journey.
In his announcement, Kesserwani reflected on Cushion's journey, stating that despite launching multiple fintech products, the company "was unable to reach the scale necessary to sustain long-term operations."
Founded in late 2016 and based in San Francisco, Cushion raised a total of $21.6 million from prominent investors, including Afore Capital, Flourish Ventures, Vesigo Ventures, Better Tomorrow Ventures, and 500 Global.
The startup's last publicly disclosed funding round took place in May 2022, when it secured a $12 million Series A led by Afore Capital. At that time, PitchBook estimated its post-money valuation at $82.4 million.
Kesserwani did not immediately respond to TechCrunch’s request for comment regarding the shutdown.
Cushion’s core product was a consumer-facing app designed to help users analyze their banking transaction histories, detect hidden fees, and negotiate refunds on their behalf. The platform was structured to align with consumer interests by only charging a commission on successfully recovered funds, as Kesserwani explained to TechCrunch in 2019.
The idea for Cushion emerged after Kesserwani left his role at Twitter. While taking a career break, he helped his parents manage their bank accounts remotely while they worked in Lebanon. Due to banking security restrictions, his parents were unable to log in from abroad, leading to unattended accounts and a build-up of fees. This experience prompted Kesserwani to examine his own finances, where he discovered he had unknowingly paid $400 in bank fees.
In his LinkedIn post, Kesserwani highlighted that Cushion had automated bank fee negotiations, achieving $3 million in annual recurring revenue (ARR) within ten months and processing over $300 million in BNPL loans. The company ultimately onboarded more than one million consumers, including over 200,000 paying customers.
Reflecting on the company's journey, Kesserwani wrote: "I dedicated over eight years of my life to Cushion. While the outcome wasn’t what we had hoped for, we created something that made a real impact on the industry—and I’m proud of that. As for what’s next, I’m excited to see where the future takes me."
Industry reports suggest that 2025 is expected to be another tough year for fintech startups, with many facing financial difficulties. In late December, another fintech firm, Bench, unexpectedly shut down, only to be acquired a few days later.
