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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
The news that Jassby, a PFM app for kids, has raised $5 million in new funding is one small step for savings solutions and one giant leap for financial education.
The Family Finance App, which has more than 100,000 users, enables kids to receive money from parents and grandparents, which they can then save, spend, or donate in a safe, supervised “Walled Garden”-style, digital platform. Jassby notes that the combination of a digital wallet and a shopping tool – along with parental participation – will help kids learn responsible financial habits by connecting what they have to what they want. This can be a more effective way of learning than simply studying lessons on smart financial habits and then taking tests and quizzes to see if the material is truly understood and absorbed.
Benjamin Nachman, Jassby CEO, called the promotion of financial literacy “one of our core values.” He added “we have built a cutting-edge system that allows us to partner with schools, sports clubs, and businesses to create a full ecosystem for our users.”
“Jassby has created a holistic digital financial ecosystem for kids, teens and their parents,” Moneta Managing Partner Adoram Gaash said. “(Jassby) deals with the real issue of financial illiteracy, and lets kids use financial services in a very smart way.” The app is currently available as a downloadable iOS solution, as well as a web app.
The round, which takes Jassby’s total capital to $10 million, featured participation from Needham Bank and Moneta Capital, as well as Blumberg Capital, Correlation VC and PnP Ventures. The company said the funding will help speed development and take the app to one million users within a year. Nachman added that the company also plans on raising an additional $20 million later this year to help reach that goal.
Jassby is headquartered in Waltham, Massachusetts, and was founded in 2018. Last fall, the company announced a partnership with Needham Bank to enable banking services for users of its family financial app. The fintech has also teamed up with Boston Siege Football club, signing on the semi-pro soccer club as a corporate sponsor. Boston Siege began wearing Jassby’s logo on its kits and training gear last year. The two organizations are planning on a project involving the club’s payment and revenue infrastructure in 2020.
Chinese conglomerate Ant Financial has purchased a minority stake in Sweden’s e-commerce payments innovator Klarna. The terms of the investment were not disclosed, but the company said that the funding amounts to a 1% stake in Klarna. The most recent assessment of Klarna, based on a $460 million funding round in 2019, puts the company’s valuation at $5.5 billion.
“Alipay, and the wider Alibaba Group, have truly set the global pace on retail innovation and the app economy,” Klarna CEO Sebastian Siemiatkowski said. “We are delighted in this confidence shown in Klarna in defining the future of payments and shopping and are very much looking forward to working together further in the future.”
The investment comes as a tonic in the wake of Klarna’s first annual loss of $113 million in 2019. It also represents a deepening of the partnership between the two firms that will make more of Klarna’s buy now pay later solutions available to consumers and merchants in the Alibaba ecosystem. This includes more integration between Klarna and Alibaba’s Alipay which, via AliExpress, Alibaba’s retail online marketplace, leverages Klarna’s e-commerce solution.
“At the heart of this cooperation between Klarna and Alipay is a shared ambition of innovating truly superior shopping experiences and creating destinations of inspiration for consumers across the world,” Siemiatkowski said.
More than 200,000 merchants and e-commerce platforms around the world are powered by Klarna technology. The company’s partners include IKEA, Adidas, Spotify, and Expedia Group, among many others, and in 2019 alone, Klarna added more than 75,000 new merchants to its platform. Founded in 2005 and a Finovate alum since its debut at FinovateSpring in 2012, Klarna has 2,700+ employees and is live in 17 countries. Late last month, the company announced that Klarna had reached the seven million customer milestone and 1.6 million app downloads.
The number of women in technology in general, and fintech in specific, is growing. That’s the good news.
As Julie Bort and Rachel Sandler wrote in their 2018 feature on female engineers for Business Insider, “for all the arm waving about the lack of women in STEM professions, the truth is, there are some powerful role-model female engineers having fabulous careers and creating tech used by millions, if not billions of people everyday.”
A report from consulting firm Korn Ferry supports this. The study, conducted last year and looking at the top 1,000 U.S. companies by revenue, noted an increase of 2% in the number of women who held the role of CIO or CTO last year. “The industry with the highest percentage of women CIOs/CTOs,” the report noted “is financial at 25%.”
By comparison, the number of women fulfilling the role of Chief Technology Officer within the tech industry remains fewer, maybe even far fewer, than you might suspect. By industry, Korn Ferry ranked technology behind financial, healthcare, retail, and consumer, besting only the services industry.
Women like Padmasree Warrior, who served as Cisco Systems’ CTO between 2007 and 2015 and, before that, as CTO for Motorola for four years, have been among the relatively few women at the top tier of technology leadership – especially at the largest tech companies. Elissa Murphy, at GoDaddy, Selina Tobaccowala at SurveyMonkey, and Raji Arasu at StubHub are just a few of the female CTOs in charge of technology at some of our economy’s newer, most innovative companies.
Pamela Rice, former SVP of Technology at OnDeck and current CTO of Earnest, during her presentation at FinDEVr Silicon Valley.
Turning to fintech – and our own experience at Finovate – a woman like Pamela Rice comes to mind. The former Senior Vice President of Technology at OnDeck who represented the company at our developers conference FinDEVr, Rice is currently Chief Technology Officer for Earnest. The San Francisco, California-based company she joined in 2019 provides consumer financing options for underbanked populations including recent college graduates. Last summer, she participated in a company-hosted, Tech Meet-Up on Diversity and Inclusion, sharing her thoughts on the value of making diversity “part of the DNA of everything you do.”
We took a look at how the fintech industry was faring in terms of female representation at the CTO level. There is still a great deal of progress to be made. Here is a sample of the women who are increasingly providing technical leadership for fintechs large and small.
Marianna Tessel – Intuit – With more than 20 years experience as a VP of Engineering for companies like Ariba, Docker, and VMWare, Tessel took the helm as Intuit’s Chief Technology Officer in January 2019.
Educated at Technion – Israel Institute of Technology and the Weizmann Institute of Science – and having served as a captain in the Israeli Army – Tessel was praised by new Intuit CEO Sasan Goodarzi as a “transformational change agent” who has created “an engineering culture that has accelerated innovation.”
At Intuit, Tessel is responsible for leading the company’s product engineering, data science, information technology, and information security teams around the world. She first joined Intuit in 2017, leading product development for the firm’s Small Business and Self-Employed Group, including the company’s QuickBooks product family.
Rija Javed – MarketFinance (formerly MarketInvoice) – After more than four years as an engineer for Wealthfront, including roles as Director and Senior Director, Javed joined U.K.-based MarketFinance as the company’s Chief Technology Officer in 2018. This made her one of the first female fintech CTOs in the country.
“Having Rija on board underlines our focus on hiring the best talent and building innovative technology to deliver business finance solutions,” MarketFinance CEO and Co-founder Anil Stocker said. “It’s the foundation we’ll use to help thousands of business(es) access funding quickly and easily.”
While at the Wealthfront, Javed built the company’s first mobile app. Transitioning to the company’s investment products platform, she helped scale Wealthfront’s offerings including the development of a new brokerage and banking platform. With degrees in Electrical and Computer Engineering from the University of Toronto, Javed is also a mentor for the New York Academy of Sciences.
Ekate Kuznetsova – Token Transit – Sometimes the only way for a woman to make sure that there’s a woman’s place at the tech table is to build the table herself. That’s the approach of Kuznetsova, who parlayed her experience in software engineering at Akamai and Google into launching a fintech startup of her own. Token Transit, for which Kuznetsova is founder, CEO, and Chief Technology Officer, provides mobile ticketing and payment verification solutions for public transportation.
Launched in 2016 and available in more than 75 cities in the U.S. and Canada, Token Transit enables people to pay for fares and passes with their credit, debit, or commuter benefits card and provides them with a digital ticket that is stored on their smartphone.
Kuznetsova earned her Bachelor of Science degree from Massachusetts Institute of Technology, where she studied Mathematics and Computer Science.
While the ranks of female CTOs in fintech remains modest, it should be mentioned that there are women – from VPs of Engineering to Chief Scientists – who are not only currently leading tech teams, but also are likely among the CTOs of tomorrow. For a peek at one shortlist, check out Angie Chang’s spotlight on 21 female executives who could become one of the Fortune 100’s next CTOs.
Know a woman who’s driving technology innovation at one of your favorite fintechs? Send us a note at research@finovate.com!
Financial institutions leveraging Visa APIs can now enable voice-first digital banking technology from Clinc. Courtesy of a newly-announced partnership between Visa and the conversational AI innovator, customers of participating banks and credit unions will be able conduct a wide variety of banking operations by communicating directly with their bank accounts using natural, conversational language. No special keywords, phrases, or scripted questions.
“Our goal has always remained the same – to create technology that makes people’s lives easier,” Clinc co-founder and interim co-CEO Lingjia Tang explained. “Partnering with a leader like Visa is a milestone for Clinc, and this API integration is going to offer small and mid-size banks a similar experience that some of the largest banks in the world are using.”
The collaboration will allow digital banking customers to check balances, transactions, and spending history; pay bills and transfer money; as well as perform financial management functions such as creating payment plans, checking rewards programs, and disputing transactions. Customers will also be able to conduct a wide variety of card management operations ranging from turning cards on and off, reporting and reissuing lost or stolen cards, and activating new cards – all using their natural voice in a conversational way.
“This is the kind of capability and cutting-edge AI wouldn’t be otherwise be accessible without Visa, ” Tang added.
Clinc’s partnership with Visa is the latest example of how the Ann Arbor, Michigan-based company is helping banks enhance the customer experience. Founded in 2015 and making its Best of Show-winning Finovate debut a year later at FinovateFall, Clinc teamed up with Singapore’s OCBC Bank last year, helping the bank launch its voice-enabled mobile banking assistant. The company has also partnered with Turkish bank Isbank, powering one of the most widely-deployed mobile banking voice assistants, with more than six million users.
Clinc has raised $60 million in funding. The company picked up the lion’s share of that amount last spring in a $52 million Series B round.
Google Cloud has unveiled its latest data center and announced that PayPal will be among the first to move key components of its payments infrastructure to Google’s cloud region. The news is the latest example of a partnership between the two technology giants that extends back at least as far as 2017, when PayPal became an authorized payment method for Android Pay (which later became Google Pay).
The new cloud region, Google’s 22nd globally, will be based in Salt Lake City and is designed to provide customers in the western U.S. with better, more reliable cloud services.
“When it comes to processing a financial transaction, security and speed count,” PayPal VP for Employee Technology & Experiences and Data Centers Dan Torunian said. He added that Google Cloud will provide PayPal with the “security, quality, and velocity” it needs, particularly when it comes to managing seasonal payment transaction volume surges and keeping regional expansion costs low.
In fact, PayPal reportedly chose Salt Lake City in part for low-latency access to its own data center, which will make it easier for PayPal to commit additional resources to the cloud over time. The partnership will also allow PayPal to establish a migration pattern that can be used to convert more on-premises infrastructure to the Google Cloud – at the Salt Lake City data center or to any other Google Cloud platform region.
More than 300 million consumers and merchants in 200 markets use PayPal’s payments technology for financial services and commerce. The San Jose, California-headquartered company began the year forging a strategic partnership with UnionPay International that will boost its merchant and consumer business in the Chinese market. PayPal reported adding more than 37 million net new active accounts last year, processing “nearly $200 billion” in total payment volume in the fourth quarter alone.
Two of the biggest themes in fintech – digital identity and the rise of fintech in Central and Eastern Europe – meet in the latest announcement from biometric authentication specialist and Finovate Best of Show winner iProov. The company’s facial recognition technology now makes it easier for users of SK ID Solutions’ Smart-ID Service in countries like Estonia, Latvia, and Lithuania to renew their accounts without having to visit a physical bank branch.
“This is a major development for all digital identity providers,” iProov CEO Andrew Bud said. “Estonia has proved, for the first time, that a remote, automated, biometric ID verification service can deliver the highest possible levels of security.”
Recognized as equal to a handwritten signature throughout Europe, Smart-IDs enable users to authenticate themselves and provide permissions online using a smartphone app. iProov’s facial recognition technology adds a three-second scan to compare the image of the user to the image on their presented ID document to help defend against fraud and identity theft.
Smart-ID also leverages NFC-based ReadID document verification technology from InnoValor.
Financial crime risk management innovator Featurespace will be helping Enfuce combat fraud and money laundering courtesy of a newly announced partnership. Enfuce, a financial services firm based in Finland, will use Featurespace’s ARIC Risk Hub to enhance its ability to protect its customers from fraud and financial crime.
“Our clients deserve industry-leading services that allow them to freely and fully concentrate on the success of their core business, without worrying about ever-evolving fraud,” Enfuce co-founder and chair Monika Liikamaa said.
ARIC Risk Hub offers real-time transaction monitoring for fraud and financial crime, enabling institutions to identify and act against anomalous and potentially dangerous behavior as it occurs. The technology also reduces the number of false positives by as much as 70%, keeping anti-fraud processes efficient. Featurespace introduced its fraud-fighting technology to Finovate audiences at FinovateEurope 2016.
Here is a round up of recent news from our Finovate alumni.
Sezzleunveils new logo along with its first annual report.
Flybitsexpands its executive team in New York, Toronto, the U.K., and Dubai.
Yseop and Automation Anywhere join forces to scale intelligent automation.
Lighter Capitalappoints Kevin Fink at CTO and Patricia Elliott as CSO.
InCommlaunches Roblox gift cards in France and Germany.
Finovate Alum Features and Profiles
Revolut’s $500 Million Round Boosts Valuation to $5.5 Billion – Global financial platform Revolut has secured its place as the U.K.’s most valuable fintech.
Dealing with Deepfakes in Fintech – The fintech industry is ripe with security firms, such as iProov, that use AI to combat both video and audio deepfakes with anti-spoofing technologies.
Envestnet | Yodlee Acquires Indian Data Aggregator FinBit.io – Envestnet | Yodlee has acquired another asset in its strategy to further grow and develop its data aggregation and analytics business.
Meet Sonect: Cash Network Builder, Finovate Newcomer, Best of Show Winner – What’s better than having a large pizza with all your favorite toppings delivered to your front door? How about a side order of cash, saving you a trip to the ATM or bank branch?
Azimo Taps Ripple for Cross-Border Payments to the Philippines – Fueling these payment transfers is Ripple’s On-Demand Liquidity (ODL) solution that uses XRP to source liquidity and complete money transfers within three seconds.
Lendio Lands $55 Million to Match Small Businesses with Lenders – The investment more than doubles the company’s previous funding, bringing its total to $108.5 million.
SheerID Expands Identity Marketing Platform – The move enables brands to identify and acquire new customers across the globe.
Russia has a new tech billionaire. The $500 million raised by financial platform Revolut this week not only establishes the U.K.-based business as the country’s most valuable fintech. It also makes its founder and CEO, Moscow-born Nikolay Storonsky, the latest fintech billionaire to come from the Russian Republic.
The investment was led by Technology Crossover Ventures – a U.S. firm – and takes Revolut’s total capital to $836 million. Revolut now sports a valuation of $5.5 billion.
Storonsky’s net worth figure – on paper, at least – is based on a Forbes report from last February in which he noted that his stake in Revolut was being diluted to 30%.
As part of this big week for U.K. fintechs, SME lender iwoca picked up $109 million funding and expansion into Germany. B-Social, a social payments app based in London, raised $10 million ahead of its transformation into a fully-licensed challenger bank later this year. And Azimopartnered with fellow Finovate alum Ripple to facilitate cross-border payments to the Philippines.
This week on Finovate.com, we featured a profile of Innovate Israel founder and CEO Itai Green and his thoughts on open innovation and collaboration between corporates and startups. We also highlighted Finovate newcomer Sonect, a Swiss company that demonstrated its Best of Show winning virtual cash network at FinovateEurope earlier this month.
Here is our weekly look at fintech around the world.
Central and Southern Asia
Indian fintech PhoneParLoan announces new investment from accelerator MOX. The amount of the funding was not disclosed.
Bengaluru-based digital billpay company XPay Life goes live in India.
Envestnet | Yodleeacquires Indian data aggregator FinBit.io.
Latin America and the Caribbean
AlphaCredit, a Mexico City-based fintech, raises $125 million in round led by the SoftBank Innovation Fund.
Mexico issues its first license – to NVIO Pagos Mexico – under its new fintech law.
U.S. Bancorp’s merchant acquirer subsidiary, Elavon, sells its Mexican operations to banking group Santander.
Asia-Pacific
AzimotapsRipple for cross-border payments to the Philippines.
Philippines-based Tonik Financial raises $6 million ahead of the launch of its new digital offering.
Malaysia’s biggest telecom, Axiata Group, is the latest company in the country to announce plans to pursue a digital banking license.
Sub-Saharan Africa
South Africa’s Jumo raises $55 million in combined debt and equity funding.
Nigeria’s The Nation looks at how fintech empowers startups.
Kenyan B2B e-commerce platform Sokowatch locks in $14 million Series A funding.
Central and Eastern Europe
Mastercardexpands its partnership with Rakuten Viber to bring P2P payments to Romania.
A new $500 million funding round for Revolutmakes the company’s founder and CEO Nikolay Storonsky Russia’s latest tech billionaire.
Apple Pay goes live in Slovakia and the Czech Republic.
Middle East and Northern Africa
Kashat, an Egyptian mobile app that offers short-term loans of up to $95 to the underbanked, goes live in Cairo and Alexandria.
Jordanian SME lending marketplace Liwwa raises $5 million in growth funding.
A new agreement between Tencent Holdings and Network International will expand WeChat Pay’s presence in the UAE.
With more than $1.1 billion (€1 billion) provided to small businesses in the U.K. and Germany, London-based SME lender iwoca announced today that it has received $109 million (€100 million) in debt financing from Insight Investment. The new capital will help iwoca continue its work in funding entrepreneurs in Germany.
The investment takes iwoca’s total debt and equity financing to more than $550 million (€500 million). The company, one of the largest fintech SME lenders in Germany, plans to double its workforce in the country to 100 employees and will use the funds to help scale its loan book to give institutional investors more opportunities to participate in the SME credit market.
“More than 90% of companies in Germany are small businesses, yet many of them suffer from poor access to finance as traditional lenders can’t support them the way they need it,” iwoca CEO and co-founder Christoph Rieche explained.
“Our mission is to change that. With Insight Investment we have found a very agile and responsive partner that complements our mission-driven way of working. They provide the perfect basis for us to enter a new phase of growth in Germany,” Rieche said.
Iwoca has gained more than 50,000 customers since offering its first loan in 2012, and lent more than $1.1 billion (€1 billion) to U.K. and German-based businesses. The company offers short-term financing of up to £200,000, and only charges interest – starting at 2% a month – for the days the borrower actually has the money. Iwoca also makes it easy for companies to apply for a top up in the event that additional financing is required, enabling their credit to grow along with their businesses.
The company partnered with German business banking platform Penta late last year, enabling the challenger bank to launch its credit solution. We took a look at challenger banks in Germany as part of our FinovateEurope coverage this month. Last summer iwoca launched a pair of real-time loan integrations with U.K.-based financial marketplaces Funding Xchange and Funding Options.
Among the first fintechs in the U.K. to leverage open banking to offer a lending API, iwoca has been named to the Deliotte Fast 50 and was recognized by cloud accounting platform – and Finovate alum – Xero as its Financial Services App of the Year in 2018 and its Emerging App Partner of the Year in 2017.
With one startup for every 1,400 citizens, Israel may have the highest “innovation per capita” ratio of any country on Earth.
That makes it little surprise that Itai Green, founder and CEO of Innovate Israel, would be the one to help explain what corporates need to do in order to make the most out of their collaborations with startups at FinovateEurope in Berlin last month.
Green advocates an innovation model – open innovation – in which corporates leverage their local ecosystems to collaborate and partner with startups, entrepreneurs, universities – even customers and other corporates – in order to develop whatever products or services will allow it to grow and expand. This argues against the in-house innovation model, which many have found to be an insufficient way of driving major innovation due to factors ranging from a lack of internal incentives to inconsistent and/or unclear support from management.
Green made the case to our audience that open innovation provides the lowest risk and the greatest return on investment a company can ask for – if they do it right.
In his presentation at FinovateEurope this month, Green outlined the most important factors that businesses need to keep in mind when working with innovative companies in an open innovation context. He listed nine distinct “Tips for Corporates” – a few of the more compelling ones are highlighted below.
Commitment – A theme that was quite common at FinovateEurope in Berlin this year – that bringing tech-savvy diversity to a financial institution’s board of directors was a must – was echoed strongly by Green. He advocated that companies have at least one technology/innovation-oriented board member – though having three, he noted, was far better. Green said that this kind of board representation was increasingly common in Israel where he pointed out that boards of directors typically had 20% of their members under the age of 40. Compare this to the S&P 500, where the age of the average board member is above 60.
FOMO > NIH – Even among companies that have recognized the importance of digital transformation, there can be a reluctance by corporates to embrace non-native ideas. This “Not Invented Here” attitude can be especially harmful when working with innovative startups, who often arrive on the scene with a passion to, if not disrupt, then certainly make a clear difference for their partner and a strong representation of their technology.
Green argues that a “Fear of Missing Out” on the next big opportunity is a more healthy psychology for the corporate when working with a startup rather than any sense of injured pride at not having come up with the innovation on their own.
Show Startups the Money – Another highlight on Green’s list was the importance of paying for the work. This was a point that Steve Frook of Best of Show winner Horizn would underscore in his FinovateEurope presentation, Landing Your First Bank Customer, later that day. From Frook’s perspective, it was important that startups avoid the temptation to, essentially, work for free in an attempt to show their enthusiasm and eagerness to collaborate. Establishing a business relationship – even a modest one – was an important early step for startups to take, Frook suggested. Green, from the perspective of advising the corporate, concurred. Companies should come to collaborations with startups with a budget and be prepared to use it. Paying startups, Green explained, sends a positive, professional signal to the company and to the broader community of innovators and entrepreneurs, as well.
Founded in 2017, Innovate Israel helps partner global corporations with innovative entrepreneurs and startups in Israel to help them implement advanced technologies in their businesses.
My first introduction to Dave Birch, Director of Innovation and Global Ambassador at Consult Hyperion, was via his book Identity is the New Money, and a conversation we had at a Finovate event a few years ago. He is as synonymous with the issue of digital identity as any fintech analyst; his book Before Babylon, Beyond Bitcoin, is a fascinating history of the relationship between money and identity.
Birch sees digital identity not just as a way to create a safer, more efficient interconnected world. Instead, he sees digital identity – powered by technologies like artificial intelligence – as capable of restoring the power of relationships at a time of digital and social atomization. “Before we had the kind of urban anonymity of the industrial revolution,” he said, “things were based on relationships: whether I trusted you, whether I wanted to lend you money.”
“And we’ve scaled away from that, and had institutions become intermediaries. But with the new technologies, because we are connected all the time, in a weird kind of way we’re going back to that. In a way, those new connections are taking us back,” Birch explained.
Here are some of the top takeaways from my conversation with Dave Birch this year at FinovateEurope in Berlin.
On whether financial services professionals and regulators are on the same page with regard to the importance of digital identity.
Birch: A long time ago it was the theorists who said we’re going to have to do something about identity. And then a few years ago it was technologists like me who ran into the buffers and said we can’t make any more progress until we do something about identity. But now it’s people like Mark Carney, who is the governor of the Bank of England, saying we can’t make any progress without doing something about digital identity. So it’s gone up the agenda. But my point was that it’s not just technologists who are saying it. It is people who understand the financial system that are saying it. It’s become a priority. And, of course, because of my heritage, I feel that banks have a role to play in fixing the problem.
On why regtech may be the most critical subset of financial technology.
Birch: In terms of the goal, which is to reduce the cost of financial intermediation, it’s getting asymptotic. We’re getting as far as we can get. We’ve already cut the cost of transactions, increased the speed of transactions. We can’t get any further with fintech. The costs that are out of control are the regtech costs. It’s compliance, it’s Know Your Customer (KYC), Anti-Money Laundering (AML) … If we really want to make an impact on costs, we’ve got to attack those costs … And if we really want to do something about that, then we have to start talking about artificial intelligence.
On how advances in digital identity will help build new communities of trust.
Birch: I like to look at what the social anthropologists say rather than what the technologists are saying. Those guys are very into this idea that we live in these clans with relationships. There’s something more human about that. I think that technology, basing identity on relationships, the reputations we establish in those relationships, that is more interconnected.
Nowadays we’re all in lots of overlapping communities of one kind or another. But the idea that our reputations can be forged in those communities, that the values that we share will lead us to form these communities, that the transactions we get involved in, the money that we use, will somehow reflect those values, to me that seems like a very positive vision of the future.
Continental challenger banks like N26 may be pulling away from the U.K. market. But that is only creating room for newcomers like London’s social payments app B-Social which has raised $10 million (£7.8 million) en route to its transformation into Kroo, a fully-licensed bank.
The funding, part of a seed round, brings the company’s total capital to more than $17.8 million (£13.25 million). Participating in the round was Karlani Capital’s Rudy Karsan, along with additional undisclosed investors.
“Our seed 2 funding round is another key milestone towards building the greatest social bank on the planet and changing the relationship people have with money for good,” B-Social CEO Nazim Valimahomed wrote on the company’s blog. He noted that B-Social has signed up more than 9,000 users and will soon introduce functionality to enable account funding via bank transfer. Valimahomed also added that the company plans to double the size of its team at its headquarters in Holborn.
Most significantly, the investment will help B-Social as it transitions into becoming a bank, to be called Kroo. Valimahomed said that the company is currently in the final, pre-application phase for obtaining a U.K. banking license and hopes to finish the application process “in the very near future.” He referred to the rebrand as a change to an “exciting new brand that fully embodies who we are – intuitive, talented, empowering, social, and collaborative.”
Founded in 2016, B-Social helps users manage shared expenses. The company’s app, available in both iOS and Android, supports bill splitting and group expense tracking, and instant payments between B-Social account holders. The solution also comes with a contactless debit Mastercard that can be used, fee free, both at home and abroad wherever Mastercard is accepted.
What’s better than having a large pizza with all your favorite toppings delivered to your front door?
How about a side order of cash, saving you a trip to the ATM or bank branch?
Sonect, which won Best of Show in its Finovate debut at FinovateEurope in Berlin earlier this month, leverages what it calls a social network for cash to help people get the cash they need wherever they are. Based in Zurich, Switzerland and founded in 2016 by CEO Sandipan Chakraborty, the company enables merchants ranging from cafes and coffee shops to pharmacies and bodegas to benefit from the additional customer traffic of Sonect customers.
At the same time, banks can extend their ATM networks with Sonect, avoiding the expense of purchasing and maintaining additional cash distribution hardware.
The solution works simply for the user. After downloading the Sonect iOS or Android app, the user creates a Sonect account. They then select their preferred shop or merchant and the amount of cash they wish to withdraw. The merchant will scan the barcode in the user’s Sonect app, and the funds will automatically be deducted from your account as soon as the transaction is confirmed. The user then receives their cash.
Both banking accounts as well as credit card accounts can be used with Sonect (both Visa and Mastercard are currently accepted.) The solution is free of charge for both users and shops.
Sonect IT Project Manager Thai Nguyen and CEO Sandipan Chakraborty demonstrating the company’s virtual ATM network at FinovateEurope 2020.
Sonect was inspired in part by observing the slow rate of adoption of new technologies like Apple Pay. A self-described “strong believer of (the) death of cash (at) the hand of mobile payments,” Chakraborty nevertheless saw an opportunity to help bridge the gap between the custom and convenience of cash and the opportunities of digital alternatives that have yet to be fully embraced by banks, consumers, and merchants. It’s also worth noting that Switzerland is a country where cash is still very much king; the Swiss National Bank reports that 70% of all transactions in the country are still in cash.
Chakraborty credits enabling technologies like blockchain and open banking APIs for making Sonect possible. An IT Project/Program Delivery Manager with Credit Suisse for more than 12 years, he likens Sonect to a platform similar to Uber and Airbnb that is able to create a vast, service network – in transportation, accommodations, or, in Sonect’s case, for cash withdrawal – without having to bear the burden of building and maintaining a vast physical infrastructure to go along with it.
The Sonect team picks up a Best of Show award in its Finovate debut at FinovateEurope.
Currently available only in Switzerland, there are more than 2,500 shops partnered with Sonect. That said, Chakraborty noted, “We are in a phase where we are expanding within Europe,” adding that because of the company’s Best of Show award, he believes “the word (about Sonect) will spread quicker than we anticipated,” Chakraborty also said that the company has been in conversations with banks “across Europe, across the continent” about potential partnerships.
Sonect has raised more than $8.7 million (CHF 8.5 million) in funding from investors including SixThirty and Loomis AB. The company has 25 employees in its offices in Zurich; Vilnius, Lithuania; and Mexico City, Mexico.
