Challenger bank Point raised $46.5 million in Series B funding. The company offers a debit card account. The startup is positioned as a premium debit-card company and offers credit card rewards with debit cards.
Peter Thiel, an existing investor in Valar Ventures, is increasing his investment and leading the Series A round. Breyer Capital and YC Continuity are also investors. Point raised $10.5 million in Series A funding 18 months ago, and another seed round just before. This totals $60 million.
Point wants to create the anti-credit cards. Point aims to preserve the best aspects of credit cards, but not eliminate what is less desirable. Credit cards can be a slippery slope for many people. Interest will be charged if you spend too much without realizing you won't have enough money to meet your needs. These interest rates can make it more difficult to repay your credit card debt.
Credit card incentives can be both scary and attractive. You don't have to pay your credit card bills if you have sufficient savings or you make a lot of money. However, this is not always true.
Point advises that you should get rid of your credit card. You can open a Point account to top up your existing debit card or make direct deposits to your employer. A Point account costs $49 per annum. Two ATM withdrawals are free each month, and there is no foreign transaction fee.
You can then spend your money safely with your Point card. As a debit card, you know you have enough money to purchase your items. You must first top up your account before you can buy anything expensive.
Point users earn points for every purchase. Subscribe to Spotify or Netflix and get 5x points, 3x points for food delivery and ride-sharing, and 1x point on all other purchases. You can also purchase new insurance or trip cancellation insurance by paying with your Point card.
The Point app allows you to manage your Point card. You can lock and unlock it at any time, and you can opt to receive notifications whenever it is convenient for you. You can also use the Point debit card with Apple Pay or Google Pay.
The company will use today's funding round to expand its workforce, launch new features, and create new products. So, don't expect major changes. The company has more money now to grow faster.
