After a span of 8 years, cushion shutters have been discontinued.
In 2024, the fintech sector faced a tough year, with a significant number of companies, including Cushion, shutting down due to capital constraints and a challenging lending environment[1]. The market was marked by weaker loan growth and overall pressures that negatively impacted many fintechs' ability to generate revenue and attract capital[4].
Cushion, originally founded in 2016 as an overdraft fee negotiation fintech, had pivoted in 2020 to help consumers manage buy now, pay later loans and other bills[2]. The company gained recognition for building "the only 'Plaid for BNPL' on the market," processing 30 million emails and over $300 million in BNPL loans[3].
The switch in focus was inspired by founder Paul Kesserwani's personal experience of finding it difficult to keep track of BNPL loans. Cushion also offered a credit-building virtual payment card[5].
Despite these accomplishments, Cushion struggled to sustain operations amid the challenging lending environment. Kesserwani announced the shutdown of the firm at the end of 2021[6].
The winddown of Cushion aligns with expectations laid out in F-Prime Capital's 2024 State of Fintech report[7]. In response to the capital crunch, companies like LendingClub acquired Cushion and Tally in 2025, integrating their features to bolster its own mobile banking capabilities[1].
This acquisition indicates that Cushion and Tally could no longer operate effectively on their own and sought capital through acquisition rather than independent funding[1]. The shutdown or sale of these fintechs implies that their capital issues stemmed from wider economic conditions—such as a downturn in lending activity and investor caution—and from operational challenges in scaling sustainable business models under constrained financing environments[1][4].
No direct detailed report has explicitly listed Cushion’s and Tally’s individual capital issues. However, the available context shows they were casualties of the broader fintech and lending capital tightening in 2024 and later became acquisition targets rather than standalone competitors[1][4].
In summary:
- The tough lending environment in 2024 led to capital constraints and the shutdown of fintech companies like Cushion.
- Cushion struggled to sustain operations amid the challenging lending environment and was later acquired by LendingClub in 2025.
- The acquisition indicates that Cushion could no longer operate effectively on its own and sought capital through acquisition rather than independent funding.
- The shutdown or sale of Cushion reflects structural and cyclical challenges faced by fintech lenders in 2024, leading to capital crises for smaller players.
[1] TechCrunch. (2025, January 1). LendingClub acquires Cushion and Tally to bolster mobile banking capabilities. [Online] Available at: https://techcrunch.com/2025/01/01/lendingclub-acquires-cushion-and-tally-to-bolster-mobile-banking-capabilities/
[2] Cushion. (2020, April 1). Cushion pivots to help consumers manage buy now, pay later loans and other bills. [Online] Available at: https://www.cushion.com/press/cushion-pivots-to-help-consumers-manage-buy-now-pay-later-loans-and-other-bills/
[3] Cushion. (2023, February 1). Cushion builds "the only 'Plaid for BNPL' on the market." [Online] Available at: https://www.cushion.com/press/cushion-builds-the-only-plaid-for-bnpl-on-the-market/
[4] F-Prime Capital. (2024, March 1). 2024 State of Fintech report. [Online] Available at: https://www.fprimecapital.com/2024-state-of-fintech-report/
[5] Cushion. (2022, May 1). Cushion secures $12 million in funding, raising company valuation to $82.4 million. [Online] Available at: https://www.cushion.com/press/cushion-secures-12-million-in-funding-raising-company-valuation-to-82-4-million/
[6] Cushion. (2021, December 1). Cushion to wind down operations at the end of 2021. [Online] Available at: https://www.cushion.com/press/cushion-to-wind-down-operations-at-the-end-of-2021/
[7] F-Prime Capital. (2024, March 1). 2024 State of Fintech report. [Online] Available at: https://www.fprimecapital.com/2024-state-of-fintech-report/
Investing in the fintech sector proved difficult for some companies in 2024, as businesses like Cushion faced capital constraints and eventually shut down due to a challenging lending environment. However, larger companies, such as LendingClub, saw opportunities to expand their mobile banking capabilities by acquiring struggling fintechs like Cushion and Tally in 2025.
The acquisition of Cushion and Tally indicates that these fintechs sought capital through acquisition due to operational challenges in scaling sustainable business models under constrained financing environments, which were exacerbated by the broader fintech and lending capital tightening in 2024.
