BlueVine, a Redwood City-based fintech that offers banking services for small and medium-sized businesses (SMBs), announced a series of product and company updates at a virtual event on Tuesday. The event touched on the pandemic’s effect on small businesses and their banking providers, including new opportunities for fintechs like BlueVine.
BlueVine’s main announcement was the launch of its Business Banking solution, which the company describes as “the industry’s first integrated banking, payments, and lending solution designed specifically for small businesses.” The solution (which has grown in beta to over 20,000 customers and 50 million in deposits) includes 1.0% interest on deposits, two free checkbooks, zero fees on incoming wires and ATM withdrawals, and a new payments feature that allows customers to pay vendors directly through BlueVine’s app, including via credit card.
“Only 9% of business owners say their bank meets their needs,” said BlueVine CEO Eyal Lifshitz. “Small businesses deserve more. They deserve banking services that can keep up and cater to their needs.”
BlueVine also revealed a partnership with Plaid, the buzzy open banking fintech that Visa is seeking to acquire. Through a virtual demo, BlueVine chief product officer Herman Man demonstrated how Plaid’s integration enables BlueVine’s small business customers to draw from external checking accounts when making payments or completing other operations in the BlueVine dashboard. BlueVine will also now be listed on the Plaid Exchange network as a supported bank account.
An image of BlueVine’s customer-facing dashboard
“We’ve seen the extent to which small businesses are suffering during this time, and solutions like [BlueVine] help move the needle in a very real way,” said Eric Sager, COO of Plaid, speaking at the event. “We’re really happy to play a small part in making these solutions possible.”
BlueVine’s announcements represent new milestones in a busy twelve months for the company, which has continued growing in 2020 despite the economic headwinds facing its core client base of SMBs.
Last November, BlueVine completed a $102.5 million Series F funding round, bringing its total venture financing to $767.5M, per Crunchbase. BlueVine said last week that it has grown its customer base 660% in 2020, and the firm secured a $75M credit facility last month to boost its Line of Credit product.
BlueVine said Tuesday that new account registrations have been growing 15% week-over-week since late August. BlueVine attributes that in part to participating in the U.S. government’s Paycheck Protection Program (PPP). Along with banks and a handful of fintechs, BlueVine processed over 155,000 emergency government loans for small businesses, totaling over $4.5 billion in relief.
“BlueVine was able very quickly to build a product on top of its platform [for PPP],” said Tyler Sosin, a partner at VC firm Menlo Ventures who spoke at the event and first invested in BlueVine in 2016. “It’s not something you see with traditional banks.”
BlueVine’s agility is evident in its onboarding process, which made it easy for small businesses to quickly access their much-needed PPP funds. The company boasts that small businesses can today apply for an account in under 60 seconds.
“Signing up for an account was so simple. The fact it was all online was incredible,” said Beyth Hogue Greenetz, owner of Road West Financials, a small business consultancy that uses BlueVine and recommends the service for its own clients.
BlueVine’s nimbleness around PPP highlights the ability of fintechs to move fast during financial crises. It also raises questions about due diligence and the potential consequences of the tech world’s “move fast, break things” mentality entering financial services: Bloomberg reported that of the PPP loans identified as fraudulent by the Department of Justice, about 75% were handled by financial technology companies, including BlueVine.
Kabbage, a BlueVine competitor that also processed PPP loans (and faced the brunt of the scrutiny), was acquired by credit card giant American Express earlier this year, indicating that some legacy financial companies are not overly concerned about such risks.
Nor are the small businesses that quickly accessed PPP funds. BlueVine did not disclose how many of its PPP borrowers have been converted into full-time customers, but the firm is betting that its wider name recognition, courtesy of the PPP program, will help attract new customers. BlueVine believes its tailored, zero-fee approach to SMB banking differentiates it from the large banks, which are mainly focused on retail and corporate banking and often “nickel and dime” small business clients.
“The no-fee structure is truly revolutionary for small businesses,” said Greenetz. “To be able to say there’s this efficient product… you can immediately tell this is going to be an easy one to pass on to our clients.”