Finovate Alums Among Top Investment Targets for Top European Banks

Earlier this year, CB Insights took a look at where fifteen of the top European banks were spending their investment dollars. The result is an interesting portrait of an industry appears very committed to three areas of fintech in particular: blockchain, financial services software, and Regtech. Of the 15 banks represented in CB Insights’ survey, all but one had invested in R3, the blockchain consortium, with ten banks investing in financial services software companies, and eight banks funding Regtech firms.

Also noteworthy is the presence of ten Finovate/FinDEVr alums among the investments. Symphony Software Foundation, an alum of our developer’s conference, FinDEVr, was the alum with the most support from among the 15 European banks. Santander was the bank with the broadest support among our alum community, backing six out of the 11 alums listed.

Kabbage (FinovateSpring 2015)

  • Founded in 2009
  • Headquartered in Atlanta, Georgia
  • Total Capital Raised: $488 million
  • Top European banks: Santander, ING

Personetics (FinovateFall 2016)

  • Founded in 2010
  • Headquartered in Tel Aviv, Israel
  • Total Capital Raised: $18 million
  • Top European bank: Santander

Prosper (FinovateSpring 2009)

  • Founded in 2006
  • Headquartered in San Francisco, California
  • Total Capital Raised: $355 million
  • Top European bank: Credit Suisse

Ripple (as OpenCoin, FinovateSpring 2013)

  • Founded in 2012
  • Headquartered in San Francisco, California
  • Total Capital Raised: $93.6 million
  • Top European bank: Santander

SaveUp (FinovateSpring 2014)

  • Founded in 2011
  • Headquartered in San Francisco, California
  • Total Capital Raised: $7 million
  • Top European bank: BBVA

SigFig (FinovateFall 2011)

  • Founded in 2007
  • Headquartered in San Francisco, California
  • Total Capital Raised: $60 million
  • Top European banks: Santander, UBS

Socure (FinvoateFall 2015)

  • Founded in 2012
  • Headquartered in New York, New York
  • Total Capital Raised: $29.4 million
  • Top European bank: Santander

SumUp (FinovateEurope 2013)

  • Founded in 2011
  • Headquartered in Dublin, Ireland
  • Total Capital Raised: $44.3 million
  • Top European bank: BBVA

Symphony Software Foundation (FinDEVr New York 2017)

  • Founded in 2014
  • Headquartered in Palo Alto, California
  • Total Capital Raised: $229 million
  • Top European banks: BPCE/Natixis, UBS, Deutsche Bank, Societe Generale, BNP Paribas, Credit Suisse

Tradeshift (FinovateEurope 2012)

  • Founded in 2010
  • Headquartered in San Francisco, California
  • Total Capital Raised: $182 million
  • Top European banks: Santander, HSBC

Tyfone (FinovateSpring 2008)

  • Founded in 2004
  • Headquartered in Portland, Oregon
  • Total Capital Raised: $13.4 million
  • Top European bank: Deutsche Bank

The analysis focused on fintech investments from 2012 through June 2017, and includes investments made by the venture arms of the banks shown.

Finovate Alumni News

On Finovate.com:

  • Twitter Talk from FinDEVr 2017 New York.

Around the web

  • FinDEVr New York newcomer Fiserv announces enhancements to its real-time, loan servicing solution, LoanServ.
  • Credit Donkey lists StockTwits, TradeKing, SigFig, DriveWealth, and Personal Capital among its Best Investing Apps of 2017.
  • Swiss financial sector infrastructure operator SIX partners with IBM Watson to build cyber-security hub. Video of IBM’s FinDEVr 2017 New York presentation last week will available soon in our video archives.
  • PYMNTS.com looks at speculation that Kabbage may acquire OnDeck.

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.

Top Direct-to-Consumer Wealthtech Plays

wealthtech4

Our wealthtech industry coverage continues this week. We looked at the industry last week and reviewed the top trends earlier this month. Today we’re taking a look at industry players with B2C offerings—in other words, companies that market directly to consumers and not through businesses.

Since wealthtech is broader than just roboadvisers, we’ve divided B2C wealthtech players into seven categories and laid out our top picks for each group. Since category sizes vary, the number of our selections also vary.

Top in-house builds from traditional players
These are offerings from traditional wealth management firms that have been built in-house (or purchased and then white-labeled) and marketed under the firm’s brand.

Fully automated roboadvisers
These are online platforms that provide automated, algorithm-based portfolio management without intervention from human advisers and without personalized, one-on-one conversations with a human adviser.

screen-shot-2016-12-22-at-4-06-40-pmAcorns takes a unique approach by linking a user’s debit card and investing their “spare change”

Hybrid roboadvisers
These are traditional advisory services, including personalized conversations and actively managed portfolios blended with computerized portfolio recommendations. Business Insider reports hybrid roboadvisers will manage 10% of all investable assets by 2025.

screen-shot-2016-12-22-at-4-11-08-pmSigFig has partnered with multiple banks, including Wells Fargo, Pershing, and Citizens Bank

Non-U.S. roboadvisers

Alternative investing platforms
These are platforms that link participants to unconventional investment types, such as private equity, hedge funds, futures, real estate, etc.

screen-shot-2016-12-22-at-4-18-08-pmWith Motif, uses invest in grouped stocks and ETFs that revolve around a common theme

Non-U.S. alternative investing platforms

News and information companies
These are online platforms that help users discover news and market trends before they go mainstream. Some include social networking aspects.

screen-shot-2016-12-22-at-4-23-47-pmTickerTags helps users discover trends even before they become news

Finovate Alumni News

On Finovate.com

  • Behavioral Biometrics Startup Zighra Lands $1 Million in Seed Funding
  • Tuition.io Appoints Former Yahoo CEO Scott Thompson as New CEO

Around the web

  • Commerce Bank chooses Temenos to upgrade core deposit banking system.
  • ThetaRay earns recognition from CIO Review as a top 20 financial services provider for 2016.
  • Financeit reports a doubling of its business since acquiring the home improvement financing assets of TD Bank.
  • Green Dot teams with WalMart to encourage Americans to build savings.
  • Bizfi expands its business lending capabilities through a new partnership with InterNex Capital.
  • OnWallStreet recommends advisers keep their eyes on Wealthfront’s Andy Rachleff; SigFig’s Mike Sha; and Betterment’s Jon Stein.
  • Passport acquires Arizona-based mobile parking payment startup ParkX.
  • P2P lender SocietyOne facilitates $126 million in loans in 2016, finishing a record-breaking year.
  • InComm expands partnership with Target Australia to offer gift cards in stores and online.

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

SigFig to Power Digital Wealth Management for Citizens Bank

screen-shot-2016-12-01-at-8-56-35-amWealthtech veteran SigFig announced today it will power digital wealth management services for Citizens Bank. The Rhode Island-based bank plans to make the service available to its clients in early 2017.

The bank, which has $147 billion in assets and already offers tailored, advice-based services, is hoping the new integration “will drive greater value for customers by providing clear information, on-demand access, and even greater personalization.” The service will guide customers through their risk tolerance, help them determine their goals, and will offer a free investment checkup. Customers can opt to use a paid service that directly manages their investments.

By leveraging SigFig’s digital capabilities, Citizens Bank will be able to serve a broader range of clients. In a press release, John Bahnken, president of Wealth Management at the bank, said:

By introducing this digitally driven platform, we are creating an investing experience that meets a wide range of client preferences and goals, from those who are just starting to invest to those who simply prefer to manage some or all of their investing with the assistance of digital.

Today’s news is the latest in a string of recent bank partnerships for SigFig. The San Francisco-based company recently agreed to offer wealth management services to Wells Fargo, UBS, and Pershing. Launched in 2007 under the name Wikinvest, SigFig is a wealth-tech pioneer with more than $114 million AUM. Co-founder Parker Conrad debuted the company’s Actionable Advice offering at FinovateFall 2011.

Finovate Alumni News

On Finovate.com

  • “SigFig to Power Digital Wealth Management for Citizens Bank”

Around the web

  • IBM helps The Mahindra Group test blockchain technology to innovate supply-chain finance in India.
  • Digital River World Payments integrates its online payments platform with ACI PAY.ON Payment Gateway from ACI Worldwide.
  • Bank Innovation looks at the Secure Private Login launched by Civic.
  • Avoka wins AWS financial services competency status with its account-opening solution.
  • Kasasa named a BankNews Innovative Solution Award Winner.
  • PayPal revamps its business app with new capabilities.
  • CAN appoints Parris Sanz, chief legal officer, as the company’s interim CEO while CEO Daniel DeMeo takes a leave of absence.

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

Fintech Trending: Germany Grows, Pokemon Goes, PayPal Partners

PokemonGo_videoimage

Today we unveil our fintech trends column, a look at trending topics of the past week or two, compiled by the Finovate research team.


Trending highest: Pokemon Go

Our inaugural post leads with the Pokemon Go phenomenon which has fintech innovators rethinking their strategies around not just mobile, but the power of gamification, location-based marketing, and the diversity of data, as well.

Sberbank (F16) was clever enough to offer free accident insurance for distraction-prone Pokemon Go players. But the Russian-based bank has bigger plans to engage potential customers via the game, including bonuses for players who catch Pokemon in a Sberbank branch. Sberbank also plans to use lures to help drive traffic to its locations, an initiative already underway at CenterState Bank in Florida. Read our take on the technology, and its potential as a marketing tool for FIs.

It comes as no surprise that fintech’s foremost futurist, Brett King, makes the most far-reaching case in favor of a connection between Pokemon Go and fintech. Calling the game “a glimpse into how very different the world of banking, investing, and financial advice will be in 10 year’s time,” the Moven (F16) CEO and author of Augmented: Life in the Smart Lane tells The Financial Brand’s Jim Marous: “(Pokemon Go) illustrates why banking is no longer a place you go, but something you do—on a phone, in AR, and as a person lives their life.”

Other quality Pokemon posts:

  • Lessons Pokemon Go Can Teach the Banking Industry – The Financial Brand
  • Is Pokemon Go the Killer App for Location-Based Marketing – AdvertisingAge
  • Urban gamification: can Pokemon transform our public spaces – The Guardian
  • Pokemon Go Is Inspiring Small Retailers. So Has Augmented Reality Gone Mainstream? – AdWeek
  • Pokemon Go has reinvented the power of data – IT Pro Portal
  • Capture your business spend: no Pokeball needed – TradeShift blog


Other trending topics

Brexit a Boon for German Fintechs?
With the strong fundraising performance of Germany’s fintech startups in late June, and news this week that Peter Thiel took a $3.5 million stake in Cologne-based nextmarkets, London’s position as Europe’s fintech capital may be weakening. And Germany seems to be the likeliest beneficiary.

  • Brexit spurs London startups to investigate Berlin move – Reuters
  • ‘Over a hundred’ London startups have asked to relocate to Berlin since Brexit – International Business Times
  • Berlin bids to replace London as post-Brexit fintech capital – Financial Times

Nasdaq Fintech Index Goes Live
You know Wall Street loves you when they render your likeness in an index. This week, Nasdaq launched its Fintex Index which tracks the performance of 49 fintech companies including 17 Finovate/FinDEVr alums. The index of publicly traded fintechs excludes banks and is limited to companies that “mainly sell financial services,” are not brick-and-mortar based, and generate revenues from fees rather than interest.

A Week in the Blockchain
While in Florida, a judge ruled that Bitcoin isn’t money, the EU commission made a step fostering the cryptocurrency, proposing the creation of a central database that keeps a record of bitcoin users. With the new measure, the executive arm of the EU aims to prevent the use of the currency to fund terrorists.

Mastercard Accentuates the Digital
Mastercard (F14) enhanced Masterpass, allowing consumers to make in-store payments at 5 million brick-and-mortar stores. The company rebranded its logo with a lowercase ‘c’ to focus less on a physical card and more on a digital wallet. One week later the company purchased a majority stake in U.K.-based VocaLink for $1.14 billion, giving Mastercard a potentially larger role in the overall U.K. payments universe.

Pump Up the Visa Volume
Visa (F10) and PayPal (F12, FD16) partnered, putting to bed a long-standing conflict. PayPal will encourage users to make Visa their preferred payment method. And more importantly, PayPal will stop steering Visa cardholders to pay via ACH bank transfer, increasing the transaction volume sent to Visa and its card-issuing banks. In turn, Visa is adding PayPal to its Visa Digital Enablement Platform, allowing consumers to use PayPal mobile wallet at the physical POS at major retailers. PayPal has been trying to engage consumers with physical POS payments since 2012, when it first introduced its pay-by-phone-number at Home Depot.

More Fintech Companies Choose Chatbots
This ongoing trend saw new entrants with Polly Portfolio (F16) launching a chatbot, along with MyKAI and YouInvest. Additionally, text-based savings service Dyme (F15) launched the first prototype of its Facebook Messenger Bankbot.

We’re also keeping our eyes on:

  • Amazon partnered with Wells Fargo to offer a 0.50% discount on student loans for Amazon Prime members
  • Square adds same-day bank deposits for merchants. While relatively pricey, adding 1% of the transaction amount to the processing cost, it’s a simple way to improve cash flow for certain businesses.
  • Cambridge Savings Bank partnered with SigFig (F11) to become one of the first U.S. banks to offer a robo-adviser investment service.

Parentheticals after a company name refer to the year of their most recent Finovate or FinDEVr conference appearance (F = Finovate, FD = FinDEVr),

Finovate Alumni News

On Finovate.com

  • Avadian CU Chooses Jwaala’s Ignite Platform for Online and Mobile Banking

Around the web

  • Prosper sets up the Prosper Capital Consumer Credit Fund to invest in loans originated on its platform.
  • Kris Finsoftware and CustomerXPs Launch Clari5 for banks in AsiaPacific.
  • Excelian, Luxoft and Calypso Technology Sign New Partnership
  • Entrust Datacard teams up with Harman to safeguard IoT data.
  • Kabbage turns to Marketo for new marketing solutions.
  • Nomis Solutions upgrades its Deal Manager platform to give retail bankers greater insight into real-time sales and competitive data.
  • A look at fintech in Berlin and London highlights Mambu.
  • defiSOLUTIONS announces new partnership with eOriginal, a digital transaction specialist.
  • Investor’s Business Daily profiles Stockpile.
  • American Banker names SigFig as leader in robo-advisory revolution.

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.

FT Partners New Research Report on Digital Wealth Management Features a Dozen Finovate Alums

The new research report on digital wealth management from Financial Technology Partners is a timely reminder of just how deep the firm’s dedication to, and insight into, the fintech world goes (that the report features a dozen Finovate and FinDEVr alums is pretty neat, too).

FT Partners’ report “Are the Robots Taking Over? The Emergence of Automated Digital Wealth Management Solutions” looks at the different platforms and business models used by digital wealth management companies, as well as the response by industry incumbents. The 140+ page report also features interviews with CEOs from leading major digital wealth-management companies such as Betterment, Nutmeg, and SigFig.

Writing about this FT Partners’ report on digital wealth management for Bloomberg View, columnist and money manager Barry Ritholtz noted:

“For those of you who may not have thought much about how technology might affect Wall Street, the work you do each day, and how you do it—not to mention what it means for your careers—this report is invaluable.”

Ritholtz outlined how his own experience as a money manager had been shaped by the rapidly changing technology landscape (“My office is small, but thanks to technology, and fintech in particular, we are able to be very productive with just 14 people,” he wrote). He also admits this productivity comes at a cost for some. “Those people who don’t adapt will find themselves with limited career options,” Ritholtz writes.

So who are the disruptors in the digital wealth management space of whom both FT Partners and Ritholtz speak?

Betterment_logo

 

dyme

 

 

 

futureadvisorlogo

 

 

HedgeableLogo

 

 

iQuantifiLogo_FF2014

 

 

Jemstep_Logo

 

 

  • Founded in 2008
  • Headquartered in Los Altos, California
  • Kevin Cimring and Michael Blumenthal are joint CEOs
  • Acquired by Invesco, January 2016
  • FinovateSpring 2013

LearnVest_logo

 

 

  • Founded in 2009
  • Headquartered in New York, New York
  • Alexa von Tobel is CEO and founder
  • Acquired by Northwestern Mutual, March 2015
  • FinovateFall 2013

MotifInvesting_logo_150x

 

 

NutmegLogo-thumb-200x56-5002-thumb-150x42-5003

 

 

Personal-Capital-Logo

 

SigFig_logo

 

 

tradeking_logo

 

 

 

  • Founded in 2005
  • Headquartered in Boca Raton, Florida
  • Donato Montanaro is CEO
  • Acquired by Ally Financial, April 2016
  • FinovateSpring 2008

 

SigFig Partnership with UBS Features Equity Investment, Tools for Wealth Managers

SigFig_homepage_May2016

Update 5/24/2016: SigFig has raised $40 million in the round we first reported last week (see story below).  The funding included a $7 million credit facility from Comerica Bank. Also participating alongside UBS were:

  • Bain Capital Ventures
  • DCM Ventures
  • Eaton Vance Corp.
  • InnoVentures Fund (Banco Santander SA)
  • New York Life Insurance Co.
  • Nyca Partners
  • Union Square Ventures

The round takes SigFig’s total capital to more than $70 million. “Today’s announcement signals a major vote of confidence by some of the world’s most respected financial institutions in the quality of SigFig’s enterprise wealth management solutions,” SigFig CEO Mike Sha said.

——-

The new strategic partnership between UBS Wealth Management Americas (WMA) and SigFig announced this week is “strategic” in more ways than one. The deal features both an equity investment in the automated investment platform and new software solutions for UBS wealth mangers. While the amount of the investment was undisclosed, SigFig has raised more than $16 million in funding to date, with its last round a $1 million Series B in April 2015.

Tom Naratil, president of UBS Americas, said investment in technology like SigFig’s is “vital” for the wealth management business to better align “service, advice, and access … with how clients live their lives today.” The investment comes as UBS continues its shift in focus toward wealth management, and includes the building of a joint Advisor Technology Research and Innovation Lab to facilitate collaboration between UBS financial professionals and SigFig’s technologists.

SigFig_homepage2_MAy2016

SigFig CEO Mike Sha emphasized the importance of technology in helping wealth managers customize investing solutions for their clients. He added that partnerships with major FIs like UBS will be key in growing the reach of the platform. “We are excited to work with UBS WMA,” Sha said.

According to Reuters, UBS Wealth Management Americas began looking for partnerships with fintech firms under the leadership of the former president, now Chairman Bob McCann. Picking up the trail, Naratil and his team met in 2015 with a variety of robo-advisers in Silicon Valley in 2015, but eventually opted to invest rather than acquire. According to Naratil, the decision was based at least in part to avoid stifling innovation: “Our fear was that we would turn a technology firm like SigFig into us,” Naratil said.

The UBS announcement comes just a few days after news that Pershing Advisor Solutions had selected SigFig as one of three new roboadvisers available via its platform (fellow Finovate alum Jemstep was among them). Founded in 2007 (as Wikinvest) and headquartered in San Francisco, SigFig demoed its technology at FinovateFall 2011. For an annual fee of 0.25% and with the first $10,000 invested managed for free, the company’s wealth management platform helps 800,000 users manage $350 billion in investments. SigFig provides free portfolio monitoring and analysis, access to investment advisers, automatic dividend reinvestment and portfolio rebalancing. The account minimum is $2,000.