Cushion, a fintech startup that described itself as the "Plaid for buy now, pay later (BNPL)," has shut down, according to a LinkedIn post by its founder and CEO Paul Kesserwani on Thursday. The company, which had raised a total of $21.6 million from investors, will wind down its operations by the end of 2024.

Despite its promising concept, Cushion failed to reach the scale needed to sustain its business, Kesserwani said in his post. The startup had brought multiple new fintech products to market, but ultimately fell short of its goals. The news comes as a surprise, given the company's significant funding and its last publicly-announced raise of $12 million in May 2022, which valued the company at $82.4 million.

Cushion's story began in late 2016, when Kesserwani founded the company in San Francisco. The startup's consumer app was designed to help users negotiate bank fees by sucking in transaction history from their bank accounts, determining what fees had been assessed, and then conducting negotiations on their behalf to get a refund. The app was incentive-aligned with consumers, taking a commission only on returned cash.

The idea for Cushion was born out of Kesserwani's personal experience helping his parents manage their bank accounts while they were traveling for work in Lebanon. He discovered that they had faced a mountain of banking fees due to bank security policies, and later found that he had also been paying fees to the tune of $400 that he had no memory of agreeing to. This experience sparked the idea for Cushion, which aimed to help consumers avoid similar situations.

Despite its shutdown, Cushion's impact on the fintech industry cannot be ignored. According to Kesserwani, the company had automated bank fee negotiation, reached $3 million in annual recurring revenue (ARR) in just 10 months, and processed over $300 million in BNPL loans. Additionally, Cushion had onboarded over 1 million consumers, with over 200,000 paying customers. Kesserwani expressed pride in what the company had achieved, saying that it had "moved the industry forward."

The shutdown of Cushion comes at a time when the startup landscape is expected to be brutal in 2025. Another fintech, Bench, shut down abruptly in late December, only to be acquired days later. The news serves as a reminder of the challenges that startups face in scaling their businesses and achieving sustainability.

As for Kesserwani, he is excited for what's next, saying that he "gave Cushion everything" he had for over 8 years. His next move remains to be seen, but his experience and expertise in the fintech industry are likely to be in high demand.