The rise of financial technology companies-"fintechs"-is changing the way money moves around the world, leading to greater financial inclusion and closing a credit gap that historically has hampered small businesses. According to the World Bank, small and medium enterprises (SMEs) is the engine driving world economies, representing 90 percent of all businesses worldwide, providing 50 percent of all employment, and responsible for up to 40 percent of national income in developing economies. Even so, research has shown that 65 million businesses-or 40 percent of SMEs in developing economies-face an unmet financing need of $5.2 trillion per year. This gap translates to 19 percent of the gross domestic product of the 128 countries surveyed and attests to the vital role that SMEs play in the world economy as a driver of employment and overall economic health.

The case describes WeWork's by-now-infamous fall from grace, during the turbulent autumn of 2019. Governance, financial strategy, and ethics are all prominent themes. WeWork had been a dominant player in the coworking office space market and had tried to create an ecosystem that allowed tenants of its office space to collaborate easily with one another, as well as one that offered third-party services. The case allows instructors to discuss commercialization strategies, boundaries of the firm, and issues related to investors in private versus public markets.

Armed with a patent on technology that allowed users to modify existing websites and then provide access to the improved versions, Oded Golan and his startup cofounder had turned an idea born in Golan's Tel Aviv apartment into a business that had raised $3.5 million in venture capital funding and now served more than 3,000 of the world's biggest brands. Turning their technology into a profitable business had been quite challenging for the entrepreneurs, however. Over the course of four years, they had launched several products serving several different customer segments, continually chasing the goal of sustainable profits and growth. In 2017, they received the news that their much-needed second round of financing had fallen through. With only $350,000 left in the company's bank account, the founders needed to act fast once more to save their business. Students will explore Start A Fire's monetization strategies and experimentation with different product types in the founders' effort to create value from their patented technology. The case also illustrates how a firm's choice of customer segment affects its strategy.

Suk Shah, the chief financial officer at Avant, needs to consider the marketplace lender's future relationship with traditional banks: might Avant and the banks be able to work together as complementors to offer loans to consumers, or must they always be competitors? The case describes Avant's operation, highlighting the advantages and disadvantages that marketplace lenders, and more generally fintechs, have relative to traditional financial institutions. Shah's decision must take into account the challenges marketplace lenders face in terms of customer acquisition costs as well as in terms of attracting investors to its platform. Avant faces competition from other marketplace lenders, like LendingClub, as well as competition from banks. Regulation also has an important effect on Avant's ability to directly compete with banks and its need to cooperate with them.

This case features Stripe, a startup that enables merchants to accept payments from customers on the web, on mobile devices, and at the point of sale (POS). Stripe was launched in 2011 by the Collison brothers and quickly gained traction with e-commerce startups, particularly software and platform developers who needed help building their payment processing infrastructures. Stripe incurred high fixed costs in developing its platform and had low margins per transaction, so the company needed to reach high processing volumes (i.e., scale) to survive. This was challenging, as Stripe competed with large payment processors and traditional banks that had high processing volumes and were able to offer merchants significantly lower rates than Stripe. Still, merchants valued Stripe's solution because it was simple and versatile. Students assume the role of the Collisons to think about possible strategies Stripe could pursue to process higher volumes of transactions. Students are challenged to think about the potential response of the incumbents to Stripe's different growth alternatives. The teaching note presents the Value Net framework and discusses the importance of considering complementors and their effect on a firm's strategy. Finally, a discussion about Stripe's potential entry into the Indian market allows students to apply the concepts they learned in the discussion of a new market.

This case asks students to step into the role of Adalberto Flores, co-founder and CEO of Kueski, one of the first companies to develop a proprietary algorithm for online loan approval in Mexico. Mexico lacks a standardized credit scoring system, making it difficult for many Mexicans to get approved for a loan or credit card. This, together with the fact that Mexicans generally do not trust traditional banks, makes Mexico an attractive opportunity for fintech companies. Growth, however, could require fintech companies to partner with traditional banks. Students assume the role of Flores to think about the benefits and risks associated with a partnership between Kueski and traditional banks. Students are also challenged to compare the structure of U.S. financial services markets with the Mexican structure and consider the implications on the sustainability of fintech companies in the two markets. The teaching note analyzes the Mexican financial market and the benefits and threats it holds for fintech companies, and outlines a framework for evaluating the risk associated with partnerships.

This case features the challenges of a startup in the crowdfunding space in 2015 as its leadership assesses potential sources of growth for the company's future. Founded in Israel in 2012 by a renowned venture capitalist, OurCrowd was a venture capital crowdfunding platform that strove to connect high-growth startups raising capital with accredited private investors from around the world. Its value proposition was to democratize an inefficient market for private equity that had historically been dominated by a small number of highly connected venture capital firms (VCs). The case asks students to put themselves in the shoes of OurCrowd's head of investor community as he prepares for a meeting with the company's board of directors to discuss potential strategies for growth: Should the company partner with the incumbent VCs it initially sought to disrupt, emphasize marketing its Portfolio Reserve fund, strive to provide its investors and investees with higher value-added services, target a broader swath of investors by aggressively marketing the platform in international markets, or attempt to go up-market and pursue increasingly larger deals with later-stage companies? Through assessing these options and discussing this case, students will learn about incentive problems in two-sided markets as well as how different types of crowdfunding platforms create value for users.

M-Changa was one of the fastest-growing fundraising platforms in Kenya, allowing Kenyans to use text messages on their mobile phones to send, receive, and track donated funds as well as solicit donations from family and friends. The young cofounders, Kyai Mullei and David Mark, had grown the company quickly by leveraging partnerships with large banks, mobile money operators, and NGOs. By April 2015, M-Changa had a team of five people serving 25,000 users. Now, it stood at a crossroads. M-Changa's board members had expressed concern that its multitude of partnerships may have spread the company too thin. The board urged Mullei and Mark to focus on the partnerships that would reap the most value for the company in the long run. Should M-Changa pursue partnerships with mobile money operators and banks that made it possible for users to transfer money conveniently and at a low cost, or instead focus on partners that allowed M-Changa to test new customer segments and increase sales? In addition, there was an estimated US$7 billion fundraising market across East Africa, so Mullei was tempted to test neighboring markets. Students will step into the shoes of Kyai Mullei as he and his team refine their partnership strategy at a crucial point in time for the venture.

Tel Aviv-based Diskit Khartsan Ltd. sold sprays, traps, and netting to combat Blatta lateralis, the Israeli flying cockroach. The insect, slightly over one inch (2.54 cm) long and capable of flying short distances, was noisy, unsightly, and posed a risk of food contamination. Every heat wave brought more infestations, and consumers across the Mediterranean armed themselves with Diskit's HLHâ„¢ brand products. HLH products generated nearly two-thirds of Diskit's annual revenues. During periods of low demand, local retailers resisted devoting significant shelf space to the bulky products, which meant that during periods of high demand stockouts occurred frequently and Diskit lost sales. To address this problem, the company had implemented a trust receipts program that raised prices for retailers by 3 percent but allowed them to take Diskit products onto their balance sheets without payment until the products were sold.

Founded in San Francisco in 2009, Square finished 2012 as the darling of Silicon Valley; flush with more than $340 million in funding, the firm had grown to several hundred employees in just three short years. It processed more than $10 billion annually in credit and debit card payments from small business owners that used Square's smartphone-enabled card swipe device wherever cellular or wireless Internet service was available. However, Square's success had attracted new entrants into the mobile payments processing space, both in the United States and abroad, threatening to derail the company's remarkable trajectory. With its latest financing round valuing the company in excess of $3.4 billion, management and investors were considering which strategies would continue-even accelerate-the company's growth.

The Kenyan government's announcement of a new 10 percent tax in March 2013 threatened the future prospects of M-Pesa, Safaricom's mobile money transfer service, which had revolutionized the way money moved in Kenya. The new tax would be levied on all cash transfers but was largely targeted at M-Pesa, which controlled around 80 percent of the cash transfer market. In response to the new tax, Safaricom, the mobile communications market leader, announced a 10 percent price increase. The case presents the structure Safaricom established in order to develop a mobile money transfer service in Kenya. As a concept, M-Pesa was unprecedented in Kenya: prospective customers had to get comfortable with the idea that a mobile communications company could provide a payment system, that transactions could be initiated through a mobile phone, and that nonbank outlets could provide cash-in/cash-out services. Even when the concept was accepted, however, customers needed a convenient network of agents to handle transactions, and stores needed to see demand from customers in order to be motivated to become agent outlets. Thus, in order to grow, M-Pesa needed to aggressively pursue and acquire both customers and agents in this two-sided market.