While the world of public fintech companies continues to expand at a rapid clip, it also pays to watch companies still in the very early stages of growth that could be future innovators in this space. In this segment of Backstage Pass, recorded on Jan. 11, Fool contributor Rachel Warren discusses one such company with fellow Fool contributor Jose Najarro and Fool analyst Asit Sharma.
Rachel Warren: This was an interesting bit of news I saw about a really new company in the fintech space based in the U.K. called Twig. I’m going to give a little background on Twig before I dive into the story. Twig markets itself as “Your Bank of Things.” The interesting thing about this company is that, it combines this concept of a classic fintech company platform with this e-commerce/resale piece.
So essentially Twig provides a way for people to monetize pre-owned goods that they have. That’s not a new concept in and of itself. You think of companies like ThredUp or Poshmark, which I’m actually going to be talking about later. But the way in which Twig does this, is a little bit unique.
Let’s say you have an item to sell a piece of clothing or let’s say I had a handbag I wanted to sell. Well you upload a picture of the item on Twig, they’ll give you a rapid valuation of the item and then you can cash out whatever amount they value that item at, then you send them the goods to list, and the rest is up to them.
Part of the idea here as with a lot of the resale platforms we’ve seen is to reduce carbon and waste footprints. You’re sent cash for the item you can cash that money out and use it as you will.
The interesting thing about the Twig platform and they also have mobile apps, you can both send and receive money on the platform. Kind of explain a little bit better how it works.
Actually wanted to show you guys real quick if I can share my screen, their website, which is like a total blast from the past. Can you see this? I don’t know. This made me think of when I was a little kid and the Internet was just starting to be a thing [laughs].
Jose Najarro: I’m hearing the noise in the background right now [laughs].
Asit Sharma: We talked about old school and new-school, right?
Warren: Old things are new again.
Sharma: But isn’t this also borrowing something from what’s new again, which is that aesthetic that informs some of the NFTs we’re seeing?
Warren: Yeah.
Sharma: It almost seems like this is simultaneously designed to evoke nostalgia, but also cue you in like we’re very, as they say, Web 3.0. For those who don’t know what Web 3.0 is, it’s simply another expression of the internet that maybe takes its cues from blockchain, the ideas of decentralization, not relying on a few big gigantic players for all our Internet needs, but go on Rachel, this is really fascinating the look, they’re presenting here.
Warren: I actually got supers nostalgic when I to got in here. As you can see, you can download our apps on the App Store, Google Play, but they say, we’re the next-generation of banking and powering the circular economy, leading the Web 3.0 green payment infrastructure. I’m going to just scroll down to show, they have a really simple way of explaining like how it works.
The idea is to reimagine wealth, you upload your items, you receive valuation and an immediate offer for those items and then you swipe and you get your cash.
A free banking account where you can send and receive payments online, so presumably the cash you would make on the platform from the item or items you sell. The interesting thing though, is you can also get a free Twig Visa debit card that you can use for online or in-store purchases and then you can track and manage your cash using the Twig app.
Again, it’s not just this typical resale platform that you think about with some of these other companies, this is more than anything a fintech platform that is using this resale idea as a jumping off point, I think for a much broader and far reaching business idea. Again, it’s brand new. I think it was just founded in 2020, so hasn’t been around very long.
One other things that they really emphasize that they want to do is reducing carbon footprint. That’s one of the often the arguments for resale giving clothes or other items like electronics, sort of a second or third life.
The idea is that extending the life cycle of cloths for just nine months, you can reduce carbon, water, and waste footprint by approximately 20% to 30% each. Very simple to open an account, you just open it register, get your debit card, list you items and you send and receive money through the app.
Then this, I think is the last item I wanted to go over, their manifesto. They want to be a catalyst for positive change, enable you to discover wealth you’d never knew you had. They believe in conscious consumption.
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