Consumer payments startup Braid, backed by Index and Accel, shuts down

Braid, a four-year-old startup that aimed to make shared wallets more mainstream among consumers, has shut down.

Founded in January 2019 by Amanda Peyton and Todd Berman (who left in 2020), San Francisco-based Braid set out to offer friends and family an FDIC-insured, multi-user account that was designed to make it easy “to pool, manage and spend money together.” Users could create a cash pool toward a collective goal of, say, saving for a trip to Europe and then spend it on airfare or lodging using a branded debit card.

Braid raised a total of $10 million in funding “over multiple rounds” from Index Ventures, Accel and others, according to Peyton’s LinkedIn page.

In a blog post, Peyton said that Braid closed its doors in September and outlined her experiences in building the company, ultimately realizing that it wasn’t going to be a viable business venture. In the post, Peyton took responsibility for Braid’s demise, but stressed her belief that it was important to share her story of what happened.

“I have no regrets,” Peyton said in an interview with TechCrunch. “We did it the right way: Every customer dollar was cashed out; every employee was treated with care. There is magic in failure too, if you squint a bit. We were given the opportunity to take a big swing and it’s important to recognize how rarely that happens in life.”

She added of the shutdown: “It was terrible, it totally sucks…But it’s part of the life cycle. I think it’s just part of what you sign up for. And it’s part of why we do this…I did YC in 2010 and that is one of those things that sticks with you forever. Part of their whole thing is there just needs to be more startups — we just need to do more. There needs to be more than more people starting startups. There needs to be more opportunities…But [failure] — it’s this part of that cycle. And I think it’s the part that people don’t talk about a lot, but it’s just as important as the seed round or the launch.”

Also in her blog post, Peyton described the struggles that Braid faced after having issues with a sponsor bank that led to the company “effectively [being] in a coma from July 2022 to January 2023.” Without a sponsor bank, the company was in limbo.

“It was bleak — we were a payments company processing $0 in payment volume,” she wrote.

Despite finding a new sponsor bank, Braid continued to struggle. One of the biggest takeaways from her experience, Peyton said, was that leveraging third-party software would not necessarily help the company move faster and focus on its core offering.

She wrote: “What we found, instead, was every additional partner had the potential to break big, important parts of our stack. Building a multiplayer offering meant we had to be as close to the metal as possible, because a lot of our UX didn’t really exist off-the-shelf. After several painful migrations, our distaste for contractual and technical lock-in grew dramatically. By the end, if there was something we could build ourselves in Retool, we did. In addition, building mostly in-house was the only way our unit economics worked. There’s a lot of great fintech software out there, but if that software eats your entire margin, you’ll end up dead regardless.”

Looking ahead, Peyton noted that she, post shutdown, purchased the intellectual property for Braid in an auction.

“I Iove fintech,” she told TechCrunch. “I love payments. I think there’s enormous, humongous opportunity here.”

Prior to co-founding Braid, Peyton worked at Google and Etsy. She also started another company called Grand St., a marketplace for creative and indie technology products that was acquired by Etsy in April of 2014 for an undisclosed amount.

Peyton also started another e-commerce company that wasn’t venture-backed, as well as a mobile messaging company that went through a YC cohort and that the founder noted also “failed.”

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