Slash aims to corner the Gen Z market with business-focused banking features

Image credit: Slash corporate image

About two years ago, Victor Cardenas and Kevin Bai—dropouts from Stanford University and the University of Waterloo, respectively—built a fintech platform called Slash that allows users to create shareable virtual cards to share recurring expenses. Slash quickly became popular among teenagers because the virtual cards were debit-based, available to people 13 years of age or older, and did not limit spending based on credit history.

In the months that followed, Cardenas and Bai say they saw an opportunity to go after a larger market: young, commerce-focused entrepreneurs.

“The goal is for Slash’s product line to be so robust that it gives people who otherwise wouldn’t have taken the leap to self-employment the confidence to work for themselves,” Cardenas told TechCrunch in an email interview. “Slash’s goal is to take advantage of people’s growing tendency to make a living on the internet and give as many people as possible the confidence to start their own business.”

Today, Slash — which is FDIC-insured through partner bank Piermont Bank — offers something of a hybrid business/personal banking product that allows users to silo their personal and business funds, but manage them from a single dashboard. Customers get two Mastercard-branded debit cards and see two transaction feeds, with controls for whitelisting — or blacklisting — merchants for purchases.

Slash bundles non-banking software with its core product, providing daily advances for merchants selling on platforms such as Alias ​​and Amazon, a virtual card product with fine-grained spending limits and a feature that automatically generates profit and loss statements from transaction data. As before, all users over the age of 13 can register with Slash – no credit check is required.

However, those under 18 must have a legal guardian participate in the Slash account setup process. Guardians have a specialized view of the user’s account with full control and can track and make changes at any time, says Cardenas.

“Slash isn’t built for businesses — it’s built for self-employed Gen Z entrepreneurs,” Cardenas said. “Finally, Slash would like to help young entrepreneurs file taxes, issue invoices and incorporate new businesses in one place.”

Slash is part of a collection of exciting neo-banks targeting the Gen Z market, specifically Gen Zers with side hustles like drop-shipping and live streaming. Launched several years ago, Juni offers features designed to appeal to young e-commerce businesses. Meanwhile, Zelf launched a banking integration with Discord to make it easier to trade virtual assets, such as collectibles, through real-money transactions.

Image credit: Slash line

Cardenas argues that their success indicates a “mindset shift” in young entrepreneurs away from conventional financial institutions.

“Banks’ growth, trust-building and retention strategies that have proven effective in the past may not be as fruitful in the future,” he said. “The way Slash delivers support, communicates with customers and ships new features resembles a ‘WallStreetBets-like’ Reddit community more than a traditional, buttoned-up brick-and-mortar bank.”

Investors seem keen on the idea – at least in Slash’s case. Perhaps persuaded by Slash’s 20,000-strong customer base, NEA, Menlo Ventures, Connect Ventures, Y Combinator, Soma Capital, Global Founders Capital and angel investors poured $19 million into Slash’s Series A and seed rounds. Plaid founder William Hockey and Tinder co-founder Justin Mateen were among the participants.

Of course, even for the best-placed of neobanks, it is an unforgiving macroeconomic environment at present. Neobanks often struggle to make money, with an estimated fewer than 5% on balance sheet, according to a report by Simon-Kucher & Partners.

Last June, about two years after Xinja collapsed, Volt Bank also went under, returning $100 million to customers after failing to secure enough funds through a capital raising. Two other neobanks, 86 400 and Up, have been acquired by the big banks in the last two years.

Can Slash do better? We’ll have to wait and see.

Brighter days may be on the horizon for the industry, thankfully. Insider Intelligence estimates that the number of US neobank account holders will grow by 46.4% between 2022 and 2026.

Regardless, Slash is choosing to be conservative with spending at the start, refraining from expanding its 23-person workforce for the foreseeable future.

“With the money raised, Slash plans to gradually expand its engineering, design and customer success teams while continuing to build features that delight customers and keep pace with demand,” Cardenas said.

NEA Rick Yang expressed his approval in a quote via email:

“We are excited to support Slash’s mission to create a zero-friction banking experience for the busy economy. Victor, Kevin and the team have created a unique approach to bridging the gap between personal and business banking. Their focus on serving the needs of the next generation of entrepreneurs is impressive, and we look forward to seeing their continued growth and success.”