Month: January 2014

PayPal Extends Working Capital Pilot Program to Support Small Business Lending

By David Penn Posted on
Categories: PayPal

PayPalLogo.jpg

PayPal has announced plans to extend its trial initiative that provides small business loans to its U.S. merchants.

The initiative, called the Working Capital pilot program, offered 90,000 of PayPal’s U.S. merchants the opportunity to borrow against their annual PayPal revenue (up to 8% or a maximum of $20,000). The program was initially set for three months, but PayPal will be extending the initiative en route to a global roll out in 2015.

The move into small business lending puts PayPal in direct competition with Kabbage (also a Finovate alum). According to PayPal, more than 4,000 loans have been processed through the program.
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PayPal charges a flat fee for the loans, collecting neither interest nor additional fees (including late fees). In return, PayPal gets paid by deducting 10-30% from the merchant’s daily receipts. The flat fee and the percentage deduction are inversely related, meaning a higher flat fee will produce a lower daily percentage deduction.
PayPal will not deduct from merchants that do not record a sale on a given day. The company says that in addition to not issuing late fees, it will not impose repayment deadlines or conduct credit checks on its small business borrowers.
Founded in 1998, PayPal became a wholly owned subsidiary of eBay in 2002. The company has revenues of more than $5 billion annually and appeared on the Finovate stage as part of FinovateEurope 2012.

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Finovate Alumni News– January 3, 2014

By David Penn Posted on
Categories: Bill.com, Mint.com, P2BInvestor, PayPal, Prosper
  • FinovateLOGO.jpgFinovate alumni raise $825 million in 2013, up 79%.
  • PayPal extends lending opportunities to 90,000 of its U.S. merchants.
  • Mint launches weekly $500 lottery award to users for updating or building a new budget using the app.
  • P2Binvestor co-founder and COO Krista Morgan talks small business lending with author Matthew Lesko.
  • Bill.com teams up with TechAtlantis to offer automated 1099-MISC e-filing via Tax1099.com.
  • San Francisco Business Times features Prosper.
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.

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Finovate Alumni Raise $825 Million in 2013, Up 79%

By Julie Muhn (@julieschicktanz) Posted on
Categories: Affinity Solutions, Apprenda, Azimo, Bill.com, BillFloat, Cardlytics, Check, Clover Network, CoverHound, Credit Karma, CurrencyFair, DeviceFidelity, Doxo, Dwolla, ERN, Fenergo, FinanceIt, Flint Mobile, FTRANS, Funding, Heckyl Technologies, Jemstep, Kofax, Kony Solutions, LearnVest, Lendio, LendUp, Meniga, Moven, Narrative Science, Numbrs, On Deck Capital, OpenCoin, P2BInvestor, Payfone, PayNearMe, peerTransfer, Personal Capital, Ping Identity, Prestadero, Prosper, Q2ebanking, Receivables Exchange, SafetyPay, SeedInvest, Socure, SoMoLend, Spreedly, SumUp, Swipely, Taulia, TradeHero, Tradeshift, TransferWise, True Office, Trustev, Tuition.io, Wealthfront, Wipit, Xero, Zooz

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Cheers to a new year! After ringing in 2014, we wanted take a look back at the capital raised by Finovate alumni in 2013. It was quite a year, with alums pulling in $825 million, $365 million more than in 2012 for an increase of about 80%.
2013 funding summary:
    • 62 companies raised $825 million
    • Q4 had the most capital, with a total of $294 million raised by 17 companies (more than half by Xero, which landed $150 million). 
    • October was the busiest month, with $177 million raised (mostly Xero’s $150 million)
    • May was second highest with $91 million raised by 7 companies
2012 comparison
Last year Finovate alums took in almost twice as much as 2012, when 44 Finovate alums collectively raised $460 million. The chart below shows the quarter-by-quarter comparison for both years.
2013YearEndTable.jpg
Quarter 1 — blog post
More than $155 million raised by 14 companies
January — $57 million raised by 6 companies
February — $56 million raised by 5 companies

March — $42 million raised by 4 companies


Quarter 2 — blog post
More than $205 million raised by 15 companies
June — $81.7 million raised by 6 companies
May — $91.5 million raised by 7 companies
April — $32 million raised by 2 companies

Quarter 3 — blog post
More than $171 million raised by 22 companies

July — More than $63 million raised by 8 companies
August — More than $26 million raised by 6 companies
September — $82 million raised by 9 companies
Quarter 4
More than $294 million raised by 17 companies

October— $177 raised by 6 companies
November — More than $87 million raised by 7 companies
December — More than $30 million raised by 6 companies

Note: Funding that companies received before they first appeared at Finovate was not counted. Questions? Comments? Email us at julie@finovate.com or david@finovate.com.

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peerTransfer Announces Another $6 Million Investment, New CEO

By David Penn Posted on
Categories: peerTransfer

Thumbnail image for Peertransferlogo.jpg

What’s better than raising more than $6 million in June?

Raising another $6 million and change in December.

In a series B round including both new and existing investors, international tuition payment specialist peerTransfer announced that it had followed up its mid-summer fundraising effort with an equally successful $6.2 million raised in late December. 

Participating in the round were new investor Devonshire Investors, and existing investors FIDES, Kibo Ventures, Spark Capital, and QED Investors. With more than $12 million raised in 2013, peerTransfer’s total capital now stands at more than $21 million.
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peerTransfer also announced that it was promoting VP of Sales and Marketing, Mike Massaro to CEO. Founder Ike Marcaide will leave the CEO post to focus on strategic initiatives for the company.
A specialist in peer-to-peer international remittance, peerTransfer has distinguished itself by providing a streamlined international payment solution for schools and their international students. peerTransfer supports more than 45 currencies and accepts payments from 190 different countries around the world.
The company also recently announced a record-setting 2013, with its total customer base climbing to 400 colleges, universities, and other educational institutions.
Based in Boston and founded in 2009, peerTransfer demoed its tuition payment solution, peerTransfer Education, at FinovateSpring 2011 in San Francisco. Watch the company in action here.

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doxo Raises $3.5 Million in New Funding

By David Penn Posted on
Categories: Doxo

doxo.jpg

One of the competitors in the bill management space, doxo, announced that it had raised $3.5 million in new funding just before the holidays. The additional capital brings the Seattle-based startup’s total to $19 million.

doxo makes it easier for businesses and consumers to move toward more efficient, paperless financial management processes. The company includes Jeff Bezos and Open Table CEO Thomas Layton among its investors, and its cloud-based document storage and online payment system has been compared favorably to PayPal. Among doxo’s customers are AT&T, Sound Community Bank, Puget Sound Energy, as well as the State of Washington.

doxo_homepage.jpg

Additional investors include Mohr Davidow and Sigma Partners. doxo CEO Steve Shivers said that the additional funding will be used to help “accelerate growth” in 2014. Shivers co-founded doxo with Mark Goris in 2008.

doxo demoed its technology as part of the FinovateSpring 2011 show in San Francisco. See the company’s presentation here.

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Finovate Alumni News– January 2, 2014

By David Penn Posted on
Categories: Doxo, Lending Club, Manilla, peerTransfer
  • Lending Club announces more than 144,000 loans valued at more than $2B processed in 2013.
  • AARP Blog highlights Manilla among its list of “6 mobile apps to help you get organized.”
  • doxo announces $3.5 million in new funding.
  • peerTransfer reports another $6 million investment and a new CEO
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.

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My 2014 Wishlist for Digital Financial Services

By Jim Bruene Posted on
Categories: Strategic Planning

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Like most people, I speculate on the future all the time. But unless specifically asked, I gave up making a laundry list of predictions for the new year. While it’s fun for the writer, it’s often a mixed bag for the reader. 

It seems most predictions are either obvious and therefore boring (“We’ll see an ever-increasing shift to the mobile channel”) or moon shots that are provocative but totally random (“Square will buy a bank and tweet its call report every quarter”).

That said, I do have a wish list for the new year. But don’t confuse these with predictions. In fact, this list is the complete opposite. I hereby predict none of these will happen in 2014. Banks and regulators, prove me wrong!

1. Gmail-like priority inbox/feed for my financial transactions

2. Hybrid loans that blend bank financing, P2P, and friends & family funds (blog post coming soon).

3. No login option for mobile access to my primary bank accounts (Chase, BofA, US Bank, Capital One, Wells).

4. No more telephone calls (and cryptic voicemails) from the fraud department at my credit card issuers. Instead, in its place will be two-way text messaging (thanks Citibank and Discover for adopting this practice in late 2013).

5. Fraud insurance on my business banking accounts paid for as a percent of assets (e.g., $5+ per month per $50,000 covered with a $5,000 deductible).

6. Let non-accredited investors participate in regulated and transparent crowdfunding sites (just copy the U.K. model please; see our May 2013 Online Banking Report).

7. Open up competition by regulating P2P lenders as lenders (what a concept!), not as securities issuers (an SEC-driven over-correction in the aftermath of the 2007/2008 crash).

8. The Amazon/Kayak/Hipmunk/Expedia of insurance so I can find and purchase everything in one place.

9. Bring Pay As You Go auto insurance to Washington State (my post).

10. Eliminate financial price controls (Durbin, I’m looking at you) and focus regulatory efforts on transparency, open markets and level playing fields.

11.  Smartphone-controlled power outlets (wait, that already exists).

Good luck getting back in the groove everyone!

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