I haven’t written a deadpool article in a long time but feel compelled to pick this one up. PerkStreet financial was one of the first startups that we covered on BostInno and we’ve watched the company grow and shrink since then. We covered all major milestones for the company and we’ll close the book today.
PerkStreet Financial announced last night that it is shutting down after failing to raise additional financing. PerkStreet was an online-only bank, that provided checking accounts and debit cards that gave customers extra rewards or ‘perks.’
In a note on the company’s site, the PerkStreet team writes, “Over the last 6 months we have been pursuing additional investment to grow our business to the point it could be self-sustaining. Unfortunately, we were unable to secure more funding and now must begin the process of closing the company.”
For a little background on what PerkStreet Financial did, here’s how I described the company back in 2011 when it was in its ‘heyday.’ I also once called them ‘new kids on the banking block.’
PerkStreet was founded in 2008 and is modeled after ING’s virtual savings account approach. However, this Boston bank is taking the approach to the next level by offering virtual checking/debit card accounts. Much in the same way ING did with savings accounts, PerkStreet is changing the game of banking by appealing to customers who don’t care about standing in front of a teller to make transactions — users who are cool with banking online and at ATMs only. But PerkStreet offers much more than convenience for the web savvy.
Because PerkStreet is able to keep costs extremely low – no storefronts or tellers – they are the only bank to offer unlimited 2% cash back on debit card purchases. In fact their operating costs are some 70% less than those of traditional banks.
And 2% adds up fast, the company also announced today that they are now putting a million dollars a year back into their customers pockets. Cha ching.
The company will officially cease operations on Sept. 26. If you are an account holder you can still use your cards and write checks through one of PerkStreet’s two servicing banks, Provident and Bancorp. PerkStreet’s twitter handle is currently dealing with some upset customers.
I can’t imagine how hard it was for CEO Dan O’Malley to shut the company down but respect him for being transparent about it. I also invite Dan to share with our readers a few lessons in a postmortem guest post. Dan, let me know we’d love to hear from you.
