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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
When we first started Finovate in 2007/2008, during the depths of the financial-services sector collapse, there were maybe a half-dozen major venture fintech fundings per quarter. In comparison, yesterday (25 March 2014), in a single day, 10 fintech fundings were announced totaling nearly $60 million (according to Crunchbase).
Yes, you read it right. TEN in 24 HOURS! And that doesn’t even include ThreatMetrix, whose latest $20 mil round didn’t make it into the database by today’s noon (Eastern Time) cutoff.
What are the drivers? As you can see from the list below, the digital currency craze attracted nearly half the amount, with $23.5 million sent to three companies. Crowdfunding and other alt-lending has been absorbing large amounts of capital of late, and yesterday pulled in another $20 million in three fundings. The other four ran the gamut from $12 mil into a prepaid card company and $1+ million each in insurance, healthcare payments and stock analysis.
Is it 1999 again? That’s not for me to say. I hope not (obviously). But it’s hard to believe that there is enough revenue to sustain even a small portion of these startups. Clearly investors believe there are major disruptions ahead in all things financial.
miiCardbringing its ID verification technology to eMerchantPay.
WTOP News asks: is the credit card with keypad from Dynamics is the “card of the future”?
MasterCardselects Anna Yip as head of Hong Kong and Macau.
Digital Insight to expand online banking portfolio to include shared access and small business payments. Come see Digital Insight demo at FinovateSpring next month.
Kraken, the digital currency exchange platform used by Fidor Bank, raises $5 million.
ZipZappauses UK cash-to-bitcoin transfers through its platform.
Bokupartners with sunhill technologies to enable direct global carrier billing for sunhill’s services.
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.
The northern hemisphere’s first day of spring last week can mean only one thing: FinovateSpring 2014 is just around the corner. To help you prepare for the upcoming onslaught of innovation, we’ll be dishing up bite-sized pieces of some of the companies you’ll see in San Jose on April 29 and 30.
ChiaraMail offers the first technology to protect your customers from becoming victims of e-mail address spoofing, while providing them unprecedented e-mail privacy without the use of encryption.
Features:
Eliminates spoofing and the resulting identity theft.
Ensures in-transit privacy.
Adds critical functionality such as changing e-mails after sending, and improved mail network efficiency.
Why it’s great:
ChiaraMail technology assures your customers that a message that claims to be from you is actually from you.
Robert Uomini, CEO/President
Uomini is founder of ChiaraMail and inventor/developer of the patented technology behind ChiaraMail. He has been developing disruptive technologies for many years.
Head is a senior marketing and sales executive with more than 20 years of experience in enterprise and start-up companies bringing game-changing technologies to market.
Dealstruck is a web-based peer-to-peer lending company that offers a suite of financing products to small business borrowers designed to progressively graduate them toward conventional financing.
Features:
Real-time access to borrowers and deals
Ability to manipulate data from Dealstruck loan packaging to augment underwriting/yield
Opportunity to participate alongside others or take down full loans
Why its great:
Dealstruck provides the most complete suite of financing options for business borrowers and investment opportunities for lenders.
Ethan Senturia, co-founder and CEO Senturia is Wharton Business School graduate who previously ran Internet marketing for a lead generation startup, Ampush Media, and in distressed credit at Lehman Brothers.
McLoughlin, co-founder and CTO, is a B.S./M.S. who has worked at the Biodefense Knowledge Center at Lawrence Livermore National Laboratory, and at Google Machine Translation and Apple.
Digital Insight’sPromotion Suite for mobile reaches the right customers on their mobile device with the right offers at the moment of truth.
Features:
Brings personalized, relevant cross-sell offers from financial institutions to their customers.
Engages consumers in their moment of need anywhere, anytime and on any device.
Why it’s great:
Provides personalized engagements and enhanced communications to connect financial institutions with their customers like never before.
Karishma Anand
Anand is the director of product management for Digital Insight. She is responsible for driving product strategy, execution for digital banking and payments solutions. LinkedIn
Marshall Yuan
Yuan is a senior product manager at Digital Insight. In this role, he oversees the strategy and go-to-market plan for Android banking applications. LinkedIn
ID.me verifies attributes of a consumer’s identity and ties them to a payment medium
Features:
CRM, Offers, Loyalty and Authentication via a payment medium
Elimination of physical credentials needed at checkout
Fraud prevention for high-value transactions via authentication
Why it’s great:
User-centric digital identity, attribute verification and a mobile device enables the holy grail of marketing: personalization
Blake Hall
Hall is a former Army Ranger and Harvard Business School graduate. Thanks to The Economist, he is the first Google result for “muscly entrepreneur.”
Matthew Thompson Thompson is a former Army Ranger and a decorated combat veteran. He co-founded ID.me while attending Harvard Business School. LinkedIn
LendingRobot automates loan selection and investment in Peer Lending.
Features:
Fully automates investment in LendingClub and Prosper
Submits orders within one second after new loans appear
Automated definition of investment strategies
Why it’s great: LendingRobot makes investing in Peer Lending simple and efficient, and allows individuals to compete with institutional investors.
Gilad Golan, CEO
Golan shipped almost every product he ever built (and he built a lot of them). LinkedIn
Emmanuel Marot, President
Marot uniquely mixes backgrounds in both user experience design and quantitative finance.
Verde International’sVerde Aurora is a next-gen automated loan-underwriting optimization engine satisfying customers, shareholders, regulators, dealers, and other stakeholders, instantly.
Features:
The best possible decisions and counteroffers, delivered in seconds
Loss models that outperform industry leading models by fourfold
Scalable deployment that any financial institution can afford
Why it’s great: Verde Aurora obsoletes today’s decision systems by integrating behavioral models, DCF analysis and MPP-driven optimization for perfect instant offers, pleasing customers and shareholders alike.
Patrick Reily, CEO and Co-Founder Verde International
Reily’s multidisciplinary approach to strategic planning and business development is the result of 25 years of experience in banking and financial services.
The team at SmartAsset, a company that aims to answer consumers’ complex financial questions, has been busy lately. Not only are they preparing their 7-minute demo for FinovateSpring next month, they also recently launched a retirement planning tool, and this week announced they just closed on $5.2 million.
The Series A financing round was led by Javelin Venture Partners. Denis Grosz, SV Angel and Brendan Wallace, founder of Identified, also contributed.
SmartAsset plans to use the round to grow its New York-based team by around a dozen new employees and expand its platform’s capability to give users more control of their financial future.
Top Image Systems’eFLOWto process the digital census of a country in EMEA in a deal worth more than $1 million.
Place2GivereleasesGIVE-API to provide access to its database of charities as well as its payment processing tech.
SmartAssetraises $5.2 million in series A funding. Come see their live demo at FinovateSpring next month in San Jose.
Netherlands Queen Maxima visitsEntrepreneurial Finance Lab (EFL) to see its psychometric credit scoring methodology in action.
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.
In an era when the Internet of Things is becoming wildly popular, POS financing provider Financeit has opened up a communications channel in the analog world of print.
The Canadian-based company announced today that its users now have the option to order printed materials, such as:
Brochures detailing Financeit and its benefit to customers
Price tags that help highlight monthly prices
Posters and window displays
Stickers for front window and cash register
These printed materials not only let shoppers know that instant financing is available in the store, but also help to educate them about the merchant’s payment plan options through Financeit.
Users can order these items in the Library section of their account.
The votes are in. The judges have decided. And 11 Finovate alums have earned awards at the 2014 PYMNTS.com Innovation Project, including three gold medals.
Finovate alums won awards in a diverse range of categories, from “B2B Innovation” to “Best Comeback Story.” Areas where alums dominated included “Best Credit Innovation,” where Credit Karma, Lending Club, and Klarna swept the field, as well as “Best Innovation via ACH” and “Best Check Innovation.”
The Innovation Project is “powered by PYMNTS.com,” a joint venture between BusinessWire and Market Platform Dynamics. The event is in its second year, and was again held at Harvard University in Cambridge, Massachusetts.
A total of 49 awards were presented. Gold, silver, and bronze in fifteen categories, plus singular Catalyst, Women Driving Innovation in Payments, Lifetime Achievement, and Best in Show awards.
Also announced were three inductees to the Payments Hall of Fame.
See how the rest of the Finovate family fared below.
Oanda announces integration of Currensee’s Trade Leaders platform to support social trading.
TransferWiserecognized as “boldest small company” in winning FT’s Boldest in Business award for 2014.
BBVA follows Simple acquisition with launch of new digital banking unit.
Currency Transferfeatured in Wired UK as Startup of the Week.
BillGuardinvites beta testers to try its new Android app.
Mail Tribune highlights the importance of Credit Karma and Credit Sesame.
Ping Identitypurchases Accells Technologies to make mobile devices into a tool for logging you in to all of your cloud-based services in one shot.
BellaDatilaunches the next level of visual data discovery with new release.
Matt Turck examines opportunities for Kensho and Quantopian in a Bloomberg-dominated world.
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.
Players in the crowdfunding space have a lot of headaches in order to maintain compliance, especially since the SEC requires that parties who invest in offerings on crowdfunding platforms must be fully accredited. That is, they must meet one of the following two requirements:
1) Have earned $200,000/ year in both of the past two years (or $300,000 with spouse) and expect to earn the same next year
2) Have a net worth of $1 million (excluding primary residence)
BancBox, a company known for its money-moving APIs, is seeking to remove this barrier for players in the crowdfunding industry with its new API that will verify the accreditation of investors.
The API is a part of the BancBox Invest service. It will enable crowdfunding platforms to determine if their investors are accredited and legally allowed to invest in the platform. In order to comply with the SEC’s 506(c) standard, the new API will:
1) Verify income. This includes a review of the investor’s IRS documents (W-2s, 1099s, K-1s, 1040s) for the past two years and an additional confirmation that they expect to qualify in the current year.
2) Have a third party verify income (releasing in April): Third party verification must be received from a CPA, attorney, broker dealer, SEC-registered investment advisor or an equivalent entity.
3) Verify assets (releasing in May): An investor must have a net worth of at least one million dollars, excluding the value of their primary residence.
Combined with other features that the Invest service offers, the API will give private placement and equity/debt-based crowdfunding platform owners a full suite of solutions.
Fresh off its announcement of a $25 million series D, global payments company Payoneerreports that it was chosen by Google to be a payments provider for Google Trusted Stores Program.
Scott Galit, Payoneer CEO, said, “Payoneer provides a seamless, automated payment process that meets Google’s high standards for technology, security and service.”
The Google Trusted Stores program is designed to help consumers find trustworthy merchants when shopping online. Payoneer’s job will be to provide the bank transfer services, and deliver the program’s purchase protection consumer payments in some of the countries where the program operates.
Said Galit, “This exciting new program increases sales for merchants and builds confidence for consumers when making online purchases.”
Payoneer’s global payout platform is used by companies in more than 200 countries around the world. In addition to enabling seamless, cross-border sending and receiving of funds, Payoneer also features a variety of payout options, ranging from bank transfers to prepaid debit cards.
Founded in 2005 and headquartered in New York, Payoneer demoed its technology last fall as part of FinovateAsia 2013. See the company’s presentation here.
Q2goes public, shares rally early in trading debut as company earns $533 million market cap.
miiCardworking with eMerchantPay to offer merchants a more secure payment processing platform.
PayNearMepartners with self-storage management software E-SoftSys to enable users to accept cash payments online.
PayPal to let UK users order food ahead of visiting a restaurant, and use its app to pay for their food with a four-digit code when eating at a restaurant.
Payoneerwins role as payments provider for Google Trusted Stores.
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.
Here at Finovate Headquarters, we’ve got three reasons for having a little extra skip in our steps today:
First day of spring
First day of March Madness Basketball Tournament
First IPO of a Finovate alum
That alum is Q2, going public as Q2 Holdings this morning through an offering of 7.7 million shares of common stock at a price of $13 per share. The IPO is expected to raise more than $93 million, and Q2 will trade on the NYSE under the ticker symbol, QTWO.
As Q2 CEO Matt Flake said in an interview with CNBC’s Jim Cramer, “we’ve created a platform that allows community banks and regional financial institutions that don’t have the technological wherewithal to do it themselves (to compete).”
“Our companies are doing very well right now,” he said. “They just need better technology.”
Asked about the interface and user experience, Flake said:
“It’s a beautiful interface that allows you to get a common look and feel no matter what the device is. So if you’re on a mobile phone, a tablet or a desktop you’re going to have a consistent experience – just like with Netflix or Facebook.”
The Q2 IPO was the second significant fintech initial public offering of the week, following Paylocity’s successful launch on Wednesday. Offered at $13, the QTWO opened higher at $16.25 and traded as $17.38 before finishing its first day of trading just north of $15. The company now has a market capitalization of $533 million.
Q2 demoed as part of the FinovateSpring 2011 show, presenting its risk and fraud analytics technology. The company is based in Austin, Texas. Watch the company in action here.
ProfitStars’ Gladiator 
