/start ups

News and resources on fintech start-ups, scale-ups, hubs, accelerators, VCs and funding worldwide.
Point raises $46.5 million to give millennials a rewards-based alternative to credit cards

Point raises $46.5 million to give millennials a rewards-based alternative to credit cards

Reward-based debit card startup Point has closed a $46.5 million Series B funding round led by Peter Thiel's Valar Ventures.

Point is bringing the high-end credit card experience to young millennials floundering in debt, offering a debit card and linked bank account that features a range of premium perk-based benefits.

Point Card provides cardholders unlimited cash-back by earning points on every purchase, alongside extensive travel protections and purchase insurance benefits.

Reward points are geared to the youth market, including monthly subscriptions like Netflix and Spotify, and rideshare and food delivery services such as Uber and DoorDash. The company claims to provide the average cardholder with $1,230 in value annually.

Opening a Point account currently costs $49 per year and comes with two free ATM withdrawals per month and no foreign transaction fees.

The latest funding round follows a $10.5 million Series A raise in March 2020, bringing Point’s total funding to $60 million.

Point CEO and Co-founder, Patrick Mrozowski, says: “We are so excited to announce our Series B funding round today to bring a superior debit experience to Gen Z and Millennials, who have been massively underserved by legacy banking institutions with clunky debit cards with no rewards, or credit cards that trap them into debt.”

He says the new financing will allow the company to grow its team, expand features, and build a more extensive product suite.

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 06 September, 2021, 12:40Be the first to give this comment the thumbs up 0 likes

I thought finally here's a product that would disrupt credit card - until I read the part about Point costing $49 per year.

The same people who gladly fork out that kinda money for Doordash delivery or Spotify subscription seem to cry hoarse about hidden costs when it comes to paying anything to banks. The public outcry over Overdraft Protection Fees in USA is Exhibit A of that quirk of consumer behavior.

Which is why Fintechs entered the market with the promise of democratizing financial services by eliminating fees. Examples include Chimes, Klarnas and Robinhoods who offer free checking accounts, free overdraft, free loans and free trading accounts. Going by their blockbuster success, that strategy seems to be working very well. 

Only time will tell how Point's strategy of going in exactly the opposite direction will work out.