Cushion Fintech Startup Shuts Down - Funding and Reasons

Cushion, BNPL Fintech Startup, Ceases Operations

The fintech company Cushion, which positioned itself as a data connection service for the “buy now, pay later” (BNPL) sector – similar to Plaid – has announced its closure.

Company Shutdown Announcement

Paul Kesserwani, founder and CEO, revealed the decision to wind down operations by the close of 2024 in a recent LinkedIn post.

Kesserwani stated that, despite successfully launching several new fintech products, the company was unable to achieve the necessary scale for long-term sustainability.

Funding and Investors

Established in late 2016 and based in San Francisco, Cushion secured a total of $21.6 million in funding from a range of investors.

• Afore Capital
• Flourish Ventures
• Vestigo Ventures
• Better Tomorrow Ventures
• 500 Global

The company’s most recent publicly disclosed funding round occurred in May 2022, a $12 million Series A raise.

PitchBook data indicates a post-money valuation of $82.4 million as of 2022.

Cushion’s Core Functionality

Cushion’s consumer application aggregated transaction data from users’ bank accounts.

The app identified incurred fees and then proactively negotiated for refunds on behalf of the user.

This model, as Kesserwani explained to TechCrunch in 2019, was designed to align incentives with consumers, only charging a commission on successfully recovered funds.

Origins of the Company

Kesserwani conceived the idea for Cushion following his departure from Twitter.

While assisting his parents with managing their finances during a work trip to Lebanon, he encountered difficulties stemming from bank security restrictions.

These restrictions led to the accumulation of banking fees due to unattended accounts.

Further investigation into his own accounts revealed approximately $400 in unrecognized fees.

Achievements and Future Outlook

In his LinkedIn post, Kesserwani highlighted that Cushion had automated bank fee negotiation, achieving $3 million in Annual Recurring Revenue (ARR) within 10 months.

The platform processed over $300 million in BNPL loans and onboarded over 1 million consumers, with over 200,000 becoming paying customers.

Kesserwani expressed pride in the company’s accomplishments, stating, “I gave Cushion everything I had for 8+ years. While the outcome wasn’t what we hoped for, we built something that moved the industry forward.”

Industry Trends

Analysts predict that 2025 may see a continuation of startup closures.

Recently, the fintech company Bench experienced a similar shutdown, followed by a swift acquisition.

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