While the Buy Now, Pay Later (BNPL) industry continues to grow significantly — estimated to expand from $231.51 billion in 2024 to $343.52 billion in 2025 — some startups are filing for bankruptcy. Cushion is one such company. Its founder and CEO, Paul Kesserwani, announced on LinkedIn yesterday evening that the company would wind down by the end of 2024, stating, “Despite bringing multiple new fintech products to market, Cushion didn’t reach the scale needed to sustain the business.” Tech Funding News looked closely at the Cushion’s bankruptcy – here you go!
Cushion’s approach to the fintech innovation
Founded in 2016 in San Francisco, Cushion began as an AI-powered tool to help consumers negotiate bank fees. The inspiration came to Kesserwani after leaving Twitter when he helped his parents manage their bank accounts during their travels in Lebanon. During their travels, his parents accumulated substantial banking fees because security policies prevented them from accessing their accounts abroad. This experience sparked Kesserwani’s mission to help consumers reduce unnecessary expenses, increase savings, and improve their financial health.Cushion set itself apart with innovative personal finance products. According to Kesserwani’s LinkedIn post, the company developed a unique ‘Plaid for BNPL’ system. This system, similar to Plaid’s role in connecting bank accounts to fintech apps, facilitated the connection between users’ email accounts and their BNPL accounts, processing over 30 million emails and $300 million in Buy Now, Pay Later loans. The company’s initial AI-powered tool negotiated bank fees for users, potentially saving them hundreds in unnecessary charges. Cushion then created a streamlined bill-tracking system with a comprehensive dashboard that included BNPL obligations, a Pay-in-4 credit building, a real-time bill/payment calendar, and item-level transaction analysis. This feature simplified payment management and helped users avoid late fees.The company later added a credit-building feature that reported on-time bill payments to credit bureaus, helping users improve their credit scores.
Transaction volume and user engagement
Cushion attracted a total investment of $18.4M. Its last funding round was in May 2022, when it raised $12M in Series A funding from Rose Park Advisors, The Social Entrepreneurs Fund, TruStage Ventures, Vestigo Ventures, Flourish Ventures, and Green Cow Venture Capital. The company’s post-money valuation reached $82.4 million. Despite this substantial backing, Cushion couldn’t achieve the scale needed for long-term sustainability.According to Kesserwani’s LinkedIn post, Cushion showed strong market traction in its final year. The platform processed over $40 million in payments, becoming a preferred method for bill payments and BNPL transactions. Users were highly engaged, making an average of 15 payments monthly. However, despite this robust activity, Cushion faced challenges in achieving the scale needed for long-term sustainability.This robust activity demonstrated that Cushion had identified and addressed a genuine market need. The platform grew to over 1 million users, including over 200,000 paying customers, showing strong consumer demand for their services.
Big data insights and the future of fintech startups in 2025
One of Cushion’s most remarkable achievements was its extensive data analysis capabilities. Kesserwani reflected on their accomplishments during the company’s journey: “During our journey, we automated bank fee negotiation, securing over $15M in refunds and reaching $3M ARR within 10 months. To understand spending patterns, we analysed an impressive $1.46T (yes, trillion) in bank transactions and created a consumer-authorized aggregator for alternative financial data.”While 2025 may be a challenging year for some fintech startups, the sector as a whole is still poised for growth and innovation. Success largely depends on startups’ ability to navigate regulatory complexities, achieve profitability, and leverage emerging technologies to meet evolving consumer needs.
