Tradeshift Collaborates with MakerDAO on Blockchain Payments

Supply chain payments company Tradeshift has always aimed to help businesses get paid faster. Today, it’s doubling down on that mission by partnering with MakerDAO to leverage the blockchain to speed up payments.

MakerDAO is the creator of Dai, a decentralized stablecoin based on the Ethereum blockchain, as well as the Dai Credit System. Through the partnership, Tradeshift will leverage MakerDAO’s credit system to create a supply chain liquidity marketplace. The marketplace aims to serve businesses, which can leverage transactions and digital assets on the Tradeshift platform to create short-term financing models; developers, who can build apps for investors; and investors, who benefit the tokenization of assets such as invoices made available on new financial apps.

As Tradeshift Co-Founder Gert Sylvest described, it was previously difficult for trade receivables to leverage the blockchain, since the market has tight margins that do not allow for the volatile fluctuations that come with settlement in digital currencies. The difference in the Dai Credit System, Sylvest explained, is that it is “a transparent and stable token that allows anyone to represent real-world currency settlements on the blockchain.”

The Dai maintains stability because it is an open smart contract platform that allows anyone to issue Dai against their assets, which are held as collateral. When users want to retrieve their collateral, they return the Dai currency they issued, plus a fee based on how much time they used it for. This removes the need for users to blindly trust a third party. MakerDAO’s video explains a bit more in-depth:

Rune Christensen, CEO of MakerDAO said that this partnership “proves the potential of the blockchain to level the economic playing field for businesses of all sizes around the globe.” He added that the collaboration offers “new options for investors by creating an entirely new class of investment vehicles with vetted risk, based on real world assets.”

Founded in 2010, Tradeshift helps business’ buyers and suppliers digitize and collaborate on their transactions using any supply chain app. At FinovateEurope 2012, Tradeshift demoed Instant Payments, which allows small businesses to receive payments instantly on the Tradeshift platform in exchange for a small interest rate.

The company’s business commerce platform connects more than 1.5 million companies across 190 countries. To date, the California-based company has processed more than half a trillion dollars in transaction value. Tradeshift has raised $432 million, including its most recent $250 million round from Goldman Sachs this spring which vaulted the company’s valuation up to $1.1 billion.

Finovate Alumni News

On Finovate.com

  • BlueRush’s IndiVideo to Boost Customer Engagement for Meridian Credit Union.
  • Tradeshift Collaborates with MakerDAO on Blockchain Payments.
  • Azimo Adds 10 Countries for Nordic Users.

Around the web

  • Inc. talks to Kabbage about why its holding off on an IPO.
  • Lendio has helped facilitate nearly $120 million in growth capital through 5,000 loans to small businesses in California to date.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Onist Teams Up with Quovo

Collaborative financial management platform Onist announced it is teaming with financial account analysis company Quovo. Onist will leverage Quovo’s data to provide a more reliable financial picture to its Canadian clients, making it the first company in Canada to use Quovo’s services.

The collaboration will allow Onist to pull in details from new Canadian accounts, credit unions, investment accounts, as well as common bank accounts, and credit cards. The Onist platform will provide a single place where consumers and authorized third party professionals can get a comprehensive view of their net worth and cash flow. By aggregating this data and facilitating access, Onist and Quovo aim to help clients make better informed decisions.

In the press release, Onist CEO Brad Kotansky said, “Onist is all about helping families and their advisors collaborate around household finances – and having access to your complete, reliable Canadian financial data is key to that. We are thrilled to partner with Quovo and feel strongly that we can help bring Canadians the same financial insight Americans have had for years. There’s never been a better time for Canadian families to be able see and digest all of their important financial information in one place.”

The idea of democratizing financial information is core to both companies. Quovo co-founder and CEO Lowell Putnam said that Onist’s efforts to offer consumers a clear view of their finances aligns perfectly with Quovo’s own mission, making Onist, as Putnam described, “an ideal early partner.”

Headquartered in Canada, Onist was founded in 2015 and showcased its financial management platform at FinovateSpring 2017. The company offers a virtual family office that facilitates collaboration among the family and their financial advisors, estate planners, tax professionals, insurance advisors, and accountants. Leveraging a second data aggregation partnership with Envestnet|Yodlee, the Onist platform enables users to aggregate all of their financial accounts and select the information they want to share with their planning professionals.

Quovo presented at FinDEVr New York 2016 and FinDEVr New York 2017, where it was awarded Favorite FinDEVr Alum. Earlier this spring, the company received an investment from Canadian VC firm Portag3 Ventures that intended to help Quovo enter into the Canadian market. Founded in 2010, Quovo serves hundreds of institutions, thousands of advisors, and millions of end-users. Lowell Putnam is co-founder and CEO.

Sberbank Now Supports Google Pay

Russia-based financial services organization Sberbank is making online payments easier for its clients with a new collaboration this week. The bank is integrating with Google Pay, making it the first bank in Russia to do so. The move is expected to bring Sberbank’s payment method to top-of-wallet in ecommerce shops that offer Google Pay.

When they’re ready to make a purchase at an online point of sale, Sberbank users simply need to log into Google Pay, select their previously saved payment method, and confirm the transaction. The service is available via native apps, as well as on mobile and web interfaces with major internet browsers.

Sberbank acquiring and bank card division director Svetlana Kirsanova noted that the feature will help users save time when shopping online by offering a more user friendly interface. “In the modern world, the speed and easiness of making purchases are the priority, and that’s why Sberbank is focused on introducing technology that helps to avoid performing additional actions and lets purchases be made in seconds,” Kirsanova added.

At FinovateSpring 2016 Sberbank launched Sberbank Messenger, which is built on top of the bank’s digital ecosystem and enables consumers to chat and seamlessly send money to one another. The service also allows businesses to interact with consumers using both human respondents and chatbots, and enables consumers to purchase goods and services without leaving the chat dialogue.

Established in 1841, the bank has 260,000 employees and serves more than 110 million clients, equivalent to 70% of Russia’s population, through 16,000+ branches.

Shoppers Can Now Order Ahead with Yoyo

U.K. payment and loyalty app startup Yoyo Wallet is saving users time by letting them skip the line. This news comes thanks to a partnership with Preoday, a digital ordering and pre-payment technology company.

With the new integration of Preoday’s order ahead solution, Yoyo wallet users can pre-order their food and beverage at participating retailers using the Yoyo app. This move will help small and medium retailers compete with popular brands such as Starbucks and Wetherspoons that offer this option.

Yoyo CEO Michael Rolph explained that the company has democratized customer information, making the data available to small, local retailers. “Through our partnership with Preoday we can now do the same when it comes to offering the most enhanced personalised customer services to retailers and caterers, big or small,” he said. “By creating a frictionless payment, loyalty and order ahead experience, based on consumer identity and purchasing preferences, Yoyo is now acting as the engine of business growth for our partners.”

Yoyo was founded in 2013 and is now available at more than 70 universities, in 200+ workplace food service locations, and at major retailers including Caffè Nero, Planet Organic, Harris + Hoole, HOP Vietnamese, and Wrap it Up. The company processes more than 2 million transactions per month for its more than 800,000 users.

Yoyo started as a pilot project at Imperial College and recently demoed retailer-specific bank card loyalty at FinovateEurope 2018. The new solution leverages open banking to match card transactions with a retailer’s till transactions in real time to link a customer’s purchases with their card payment. It applies its loyalty engine to the matched purchases and rewards the customer as if they had paid using the Yoyo app.

The company has raised $30.3 million from Metro Group, Touchstone Innovations, Woodford, and Firestarter. Earlier this spring, Yoyo was named Best Mobile Payment Solution at the Merchant Payments Ecosystem Awards.

Temenos Teams with Open Banking API Platform LUXHUB

Banking software firm Temenos initiated a collaboration today with Luxembourg-based LUXHUB, a European open banking platform formed by four major Luxembourgish retail banks.

Through the partnership, the two aim to not only help banks meet PSD2 standards but also leverage additional opportunities available via APIs. Under PSD2, which went into effect January 13 of this year, European banks face new regulations that require real-time, 24×7 API support as well as scalability to deal with higher transaction volumes and queries.

Steen Jensen, Managing Director at Temenos, said, “Temenos brings to the table the full technology capabilities and architecture that enables financial institutions to easily comply with the directive, but also take advantage of the new business models that might arise in the future due to PSD2. We look forward to working with LUXHUB to offer our client community more opportunities to take advantage of the new API economy.”

Jacques Putz, CEO of LUXHUB added, “By collaborating with service providers like Temenos, we are bringing that PSD2 compliance straight to your core.”

Founded in 1993, Temenos debuted its Connect Mobile Banking application at FinovateEurope 2015 in London. The solutions combines native and web technologies to develop mobile apps that look, feel, and behave like native apps. The company’s systems serve more than 2,000 clients in over 150 countries. Temenos has a market capitalization of more than $10.4 billion.

Finovate Alumni News

On Finovate.com

  • Temenos Teams with Open Banking API Platform LUXHUB.

Around the web

  • Revolut and Trunomi earn recognition at the Europas Awards.
  • Enveil announces ZeroReveal Compute Fabric technology that offers organizations an encrypted data platform to protect against Nation-state level threats.
  • The Financial Brand features Digital Onboarding.
  • Jack Henry & Associates promotes Mark Forbis to EVP and CTO.
  • Jason Yetton moves on from SocietyOne after two years as CEO (paywall).

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Synchrony to Buy PayPal’s Consumer Credit Receivables

Building on its 14-year strong relationship with PayPal, Synchrony Financial has officially become the exclusive issuer of PayPal credit in the U.S. for the next 20 years. Connecticut-based Synchrony has agreed to buy $7.6 billion in PayPal’s receivables for $6.9 billion.

The sale, which was originally announced in November of 2017, consists of PayPal’s U.S. consumer credit receivables portfolio, totaling $6.8 billion, as well as $0.8 billion in participation interests in receivables held by unaffiliated third parties.

Synchrony has issued PayPal-branded credit cards to consumers since 2004 and the two have expanded that agreement to include the PayPal Extras Mastercard and the PayPal Cashback Mastercard through 2028.

In the press release, Dan Schulman, president and CEO of PayPal said, “Our agreement with Synchrony accomplishes every goal we set out for our asset light strategy. We look forward to working with Synchrony to double down on our innovative consumer credit experiences for our customers and profitably grow the portfolio over time.”

As Schulman alluded to in his comment about the company’s “asset light strategy,” this move frees up liquidity for PayPal, enabling it to use the cash to invest in other areas of its business or perhaps to fuel additional acquisitions. The California-based company has been on a buying spree as of late– having made two acquisitions days apart last month (Hyperwallet followed by Simility), marking PayPal’s fifth acquisition in the past two years for a total of 17.

A familiar face in the alternative banking space, PayPal was founded in 1998. PayPal’s Braintree presented at FinDEVr New York 2016. The company also showcased its Instant Account Creation feature at FinovateFall 2012. PayPal’s market cap sits at $98 billion.

ezbob Lands Undisclosed Investment from Honeycomb Investment Trust

Alternative business lending company ezbob closed a round of equity funding this week. The amount of the financing was undisclosed and boosts the U.K.-based startup’s total combined debt and equity funding higher than its previous total of $136 million (£103 million). Of that amount, $50.3+ million (£38.2+ million) is equity and $81.9 million (£62.2 million) is debt.

Today’s Series C funds come from Honeycomb Investment Trust, which is managed by Pollen Street Capital, one of the leading investors focused on lending startups. Lindsey McMurray, Pollen Street founding partner, will join ezbob’s Board of Directors. ezbob will use the funds to build out a more robust automated lending portfolio and to expand into new geographical territory.

Regarding McMurray’s involvement, Tomer Guriel, founder and CEO of ezbob said, “Our initial focus is on the SME community, many of whom struggle to acquire the financial support they need to achieve their personal and professional business development goals. My vision is to create a portfolio of innovative solutions which streamline and accelerate the entire lending process for both the borrowers and loan providers. With the support of highly experienced individuals like Lindsey, together with the new funding, there is nothing to stop us from turning our shared vision into a sustainable reality.”

“We have watched ezbob develop from being a niche player into a leading lending platform provider,” said McMurray. “ezbob are pioneers in this space and I believe both the financial institutions, and the businesses they support will derive significant benefits from this new and innovative approach to lending,” she added.

In addition to lending directly to small businesses in need of capital, ezbob offers banks a lending-as-a service platform for their small business banking customers. Esme Loans and Clydesdale Yorkshire Bank are among the company’s clients.

Founded in 2011, ezbob has 70 employees across offices in London, Tel Aviv, and Bulgaria. At FinovateEurope 2014, Guriel demonstrated ezbob’s online application process. The company started this year off on the right foot with the announcement of a $21 million funding round. Late last year, ezbob won an award for “Best Technology Initiative” at the Financial Innovation Awards.

Zopa’s Record Lending Figures Suggest a Healthy U.K. P2P Lending Sector

P2P lending platform Zopa not only announced its move back into profitability, it also released a handful of metrics suggesting growth sustainability in the P2P industry.

After the U.K.-based company was founded in 2005, it reached profitability in 2011 and continued that momentum until 2012. Five years later, and after a bit of restructuring, Zopa achieved revenues of $61 million (£46.5 million) in 2017. This represents 40% year-over-year growth from the company’s 2016 revenues of $23.5 million (£33.2 million).

The company attributes the growth to its increased focus on tech innovation, especially offering instant feedback on loan approvals, as well as its efforts to expand its customer base through partnerships. The boost in growth is also thanks to a rise in loan volumes. In 2016, the company lent out $906 million (£690 million) and last year increased it’s loan volume by 43% to $1.3 million (£985 million).

In a press release Zopa CEO Jaidev Janardana said, “2017 was a landmark for us. We’re proud to see the company’s efforts reflected in our record lending figures, profitability and strong customer growth…. We’ve invested significantly in technology, in our proprietary back office infrastructure, and in our people, all of which have helped Zopa to continue to scale and grow sustainably.”

Some of those investments Janardana alluded to include the announcement of plans to launch a challenger bank; receiving full FCA authorization in May of last year; and, in 2018, restructuring the company with the appointment of a trio of new C-level hires. Helping to sustain this growth is a $41 million investment the company received about a year ago from Wadhawan Global Capital of India and Northzone.

These positive revenue figures as well as the increase in loan growth allude to the health of the overall P2P lending sector in the U.K. In fact, the U.K. P2P Finance Association (P2PFA) reports that, since the second quarter of 2017, growth in the U.K.-based P2P lending sector has a whole has increased more than 40% from $8.4 billion (£6.4 billion) to $11.7 billion (£9 billion) in the first quarter of 2018.

Much of this growth, the organization described, is thanks to an uptick in business borrowing. This may explain the region’s difference compared to the U.S., where P2P lending has fallen slightly out of favor– thanks to a decrease in both lenders and investors, as well as recent regulatory scrutiny. To let numbers speak for themselves, Lending Club’s market cap has fallen from $9.3 billion at its peak in 2015 to its current $1.6 billion.

Zopa’s former CEO Doug Dolton debuted the P2P lending platform at FinovateSpring 2008 at Finovate’s very first show in the Bay Area. Zopa co-founder Giles Andrews is now CEO. Last spring, the company unveiled its latest offering, the Innovative Finance ISA, the first tool to expand the company’s focus into broader banking products. Earlier this spring, Zopa ranked 278 on the FT 1000, the Financial Times’ list of the fastest growing companies in Europe.