Author: David Penn

New Investment for LendUp Spurs Credit Card Spin Off 

New Investment for LendUp Spurs Credit Card Spin Off 
By David Penn Posted on
Categories: Funding, LendUp

San Francisco, California-based LendUp has picked up funding from LL Funds LLC, Invus Opportunities, and QED Investors.

As part of the investment, the company will spin off its credit card business, Mission Lane, as a separate, stand-alone entity. The transition will enable LendUp to focus on personal loans, gamified financial education, and savings. The company’s credit card business – as well as its IP, technology platform, and staff – will comprise Mission Lane. Vijesh Iyer, LendUp COO, will serve as interim CEO of the new company.

“While most of the financial services industry is aimed at the prime and near-prime end of the credit spectrum, these moves set not just one, but two companies up for long-term success,” explained Frank Rotmann, QED Investors co-founder. “Now LendUp and Mission Lane are better positioned to serve the more than half of Americans who lack access to high quality financial services.”

The amount of the funding was undisclosed. Prior to this latest capital infusion, the company had raised more than $361 million.

In addition to its investment news, LendUp announced a new CEO, Anu Shultes. A 25-year veteran of subprime credit and financial services industry and formerly LendUp’s GM, Shultes helped drive the company’s loan originations to more than 5.5 million short-term loans adding up to $1.7 billion.

“We’re on track to profitably expand into new consumer segments and geographies, launch new loan products, double new customer originations, and carry on our mission to help anyone get on a path to better financial health,” Shultes said in a statement. Former CEO and LendUp co-founder Sasha Orloff will remain with the company as a board member and advisor to Mission Lane.

Founded in 2011, LendUp demonstrated its platform at FinovateSpring 2014. A graduate of the Y Combinator accelerator program, LendUp was featured in the Wall Street Journal last August in a look at how fintechs were entering the subprime lending space. In June, the company was profiled by Center for Financial Services Innovation (CFSI) as one of its Financial Health Leaders for 2018 along with fellow Finovate alums like Finicity and Moven.

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Finovate Global: Fintech News from Around the World

By David Penn Posted on
Categories: Avaloq, Finovate Global

As Finovate goes increasingly global, so does our coverage of financial technology. Finovate Global: Fintech News from Around the World is our weekly look at fintech innovation in developing economies in Asia, Africa, the Middle East, Latin America, and Central and Eastern Europe.

Central and Eastern Europe

  • Gazprombank plans to offer crypto asset custody services later this year in collaboration with Metaco and Avaloq.
  • PYMNTS.com looks at how B2B payments companies in Russia are leveraging the successes of the country’s B2C payments industry.
  • Czech banks anticipate the availability of Apple Pay in the Czech Republic by February or March of 2019.

Middle East and Northern Africa

  • UAE-based financial product comparison portal, Yallacompare, raises $8 million in funding.
  • Central Bank of Kuwait (CBK) goes live with Tata Consultancy Services’ TCS Bancs.
  • Al Bawaba examines the reasons behind Egypt’s relatively slow adoption of fintech.

Central and South Asia

  • Telenor Microfinance Bank unveils Pakistan’s first blockchain-based cross-border remittance service with technology developed by Alipay.
  • PYMNTS.com looks back at a “huge year” for funding for Indian tech startups in 2018, including $300 million raised by mobile wallet app Paytm.
  • Commercial Bank of Ceylon teams up with Tenpay Payment Technology to launch WeChat Pay in Sri Lanka.

Latin America and the Caribbean

  • Bloomberg discusses the relationship between Chinese investment in mobile commerce and the growth of Latin America’s tech sector.
  • Brazilian energy holding company Cosan introduces digital wallet, Payly, for QR code payments and mobile transfers.
  • Chilean government considers levying a tax of up to 19% on global e-commerce companies with local operations.

Asia-Pacific

  • Seven Bank of Japan to adds face recognition functionality to its ATMs to enable “on the spot” account opening.
  • New $200 million investment to support KinerjaPay’s expansion into P2P lending and mobile payments.
  • Reuters reports that China is examining ways to provide lower cost financing, including via bonds and bank lending, to the nation’s small businesses.

Sub-Saharan Africa

  • South African government establishes crypto task force to develop a comprehensive government response to cryptocurrencies, including the taxing of crypto asset transactions.
  • Fintech Circle partners with the African Fintech Network to launch its fintech education courses for African countries.
  • Coin Idol considers the prospect of a crypto bubble developing in Africa.

Top image designed by Freepik

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Finovate Alumni News

By David Penn Posted on
Categories: Klarna, LendUp, NICE Systems, PayPal

On Finovate.com

  • New Investment for LendUp Spurs Credit Card Spin Off.

Around the web

  • Klarna announces collaboration with classic watchmaker Daniel Wellington.
  • Legal & General to deploy NICE’s robotic process automation (RPA).
  • HP forges partnership with PayPal to provide payment processing for its new POS system, Engage One Prime.

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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Meniga Acquires Swedish Rewards Platform Wrapp

Meniga Acquires Swedish Rewards Platform Wrapp
By David Penn Posted on
Categories: Meniga

Multiple-time Finovate Best of Show winner Meniga is starting off 2019 with an acquisition: purchasing Swedish rewards platform Wrapp for an undisclosed sum. Meniga CEO and co-founder Georg Ludviksson told Reuters that the acquisition would contributed directly to the company’s top line, “adding just over €3 million in annual recurring revenues from rewards,” as well as providing growth opportunities for Meniga in the Nordic region.

Both companies are active in the transaction-driven rewards space – Meniga in Iceland, Wrapp in Sweden and Finland. Together, they will offer a singular solution under the Meniga brand, and operate out of Stockholm, Sweden. Wrapp CEO Aage Reerslev will become Meniga’s VP of Rewards.

“We believe the merger brings us to a tipping point given the strong commitment we have from existing platform partners,” Reerslev said. “This is the right time to invest in transaction-driven marketing technology and create a more intelligent user-centric service which basically helps people buy better and smarter, not more.” Reerslev called it “a new standard for rewarding people and digitally bringing consumer brands closer to their customers – powered and distributed by the banks.”

Founded in 2011, Wrapp raised more than $36 million in funding from investors including Greylock Partners, Qualcomm Ventures, and Atomico. The transaction-driven marketing specialist has been live with six bank partners and has provided rewards and cashbacks for more than 350 brands.

Meniga most recently demonstrated its technology on the Finovate stage at FinovateFall 2018, winning Best of Show honors. During a busy fall season, the company announced a partnership with Singapore’s United Overseas Bank to provide data enrichment and categorization tools for the company’s recently-launched digital bank. Meniga also raised $3.4 million in funding last fall, courtesy of an investment from Íslandbanki, the company’s initial and longest-standing financial backer. The November financing was the second capital infusion for the company in 2018, having picked up $3.6 million in new funding from UniCredit in June.

Meniga has enriched more than 30 billion transactions for 65 million consumers in 30 countries on four continents. The firm processes 34 million transactions a day. The company was founded in 2009.

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Euro Exim Bank Joins RippleNet

Euro Exim Bank Joins RippleNet
By David Penn Posted on
Categories: Ripple

Euro Exim Bank has signed up for Ripple’s payment network RippleNet – putting its digital currency XRP on a potential path to replace correspondent banking, reports Antony Peyton of Fintech Futures (Finovate’s sister publication).

The bank was one of the 13 new financial institutions that have signed up for RippleNet. The others comprise SendFriend, JNFX, FTCS, Ahli Bank of Kuwait, Transpaygo, BFC Bahrain, ConnectPay, GMT, WorldCom Finance, Olympia Trust Company, Pontual/USEND and Rendimento. With these additions, there are now more than 200 customers signed up for RippleNet.

JNFX, SendFriend, Transpaygo, FTCS and Euro Exim Bank will use the XRP to source liquidity on-demand when sending payments on behalf of their customers.

For Euro Exim Bank, which operates in the worlds of trade finance, corporate banking and wire transfers, it offers some interesting prospects.

Kaushik Punjani, director, Euro Exim Bank, said: “Our customers – whether big corporates or individual remitters – have historically been restricted from obtaining suitable funds or settling transactions in a cost efficient and timely manner. Working collaboratively with Ripple and selected counterparts, we have designed, tested and are implementing both xCurrent [payments processing solution] and xRapid [on-demand liquidity solution] in record time.”

Let’s not the forget the views of the others as David Lighton, founder of paytech SendFriend, described the existing correspondent banking system as “slow, inefficient and costly”.

According to Ripple, using XRP for liquidity when sending a cross-border payment helps financial institutions avoid the hassle of pre-funding accounts in destination currencies.

Ripple is doing pretty well. In 2018, CEO Brad Garlinghouse said nearly 100 financial institutions joined RippleNet, and it also saw a 350% increase last year in customers sending live payments.

Meanwhile, its rival Swift has been thinking about correspondent banking as well.

Working alongside 34 banks, including Deutsche Bank, Swift completed a proof of concept (PoC) for nostro reconciliation using distributed ledger technology (DLT).

In an interview, Andreas Hauser (from Deutsche Bank) said the mandate for Swift to explore DLT usage in the correspondent banking space originated from the global payments innovation (gpi) community with the aim of fostering collaborative innovation.

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Finovate Alumni News

By David Penn Posted on
Categories: Capsilon, Entrust Datacard, Featurespace, HackerOne, Meniga, TransferWise, Tyro

On Finovate.com

  • Meniga Acquires Swedish Rewards Platform Wrapp.

Around the web

  • Featurespace partners with everis to help the business consultancy’s bank clients fight payment and account fraud.
  • TransferWise opens office in Belgium and applies for money transfer license as insurance against a no-deal Brexit outcome.
  • Hyatt launches bug bounty program with ethical hacker platform HackerOne.
  • Australian business bank Tyro unveils latest Alipay integration with  Sydney Airport retailer Heinemann Australia.
  • Entrust Datacard announces a pair of new board members, Val Rahmani and Cheri McGuire.
  • Capsilon reports that its core technology, Capsilon IQ, helped its clients’ customers save more than five million people hours collectively in 2018.

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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Enveil, Unbound Tech Bring Data Security Triad to the Enterprise

Enveil, Unbound Tech Bring Data Security Triad to the Enterprise
By David Penn Posted on
Categories: Enveil

Cybersecurity specialist Enveil has partnered with Unbound Tech to bring nation-state level data security to business customers. Together, by securing data-at-rest, data-in-transit, as well as data-in-use, the two companies will offer enterprise clients what it calls “the Data Security Triad” for cybersecurity protection.

“Partnering with innovative leaders like Unbound Tech allows us to push beyond current technology limitations to provide integrated solutions that truly represent the market-rattling, leading edge in data security,” said Ellison Anne Williams, founder and CEO of Enveil. “We recognize the importance of working seamlessly alongside other leading technologies to ensure sensitive data and encryption keys are secure at all times.”

The new solution secures sensitive data at all points in its lifecycle. Enveil’s technology leverages homomorphic encryption to close the data-in-use “exposure gap” that is created when sensitive data is decrypted for use or processing. Williams referred to this gap as the “point of least resistance” for cyberattacks.

Unbound Tech manages cryptographic keys, credentials, and other data to ensure that they never exist anywhere in their complete form. The combination of homomorphic data security and MPC-based encryption key protection, explained Unbound Tech CEO Avner Mor, relieves companies of the burden of needing multiple strategies to deal with data in different states. The solution also helps businesses save money, Mor said, calling the lower administrative and resource overhead an “added bonus.”

Unbound Tech is a Tel Aviv, Israel-based firm founded in 2013. Funded by investors including Citi Ventures, Innovation Endeavors, and Goldman Sachs Principal Strategic Investments, the company won the Prime Minister’s Award for Israeli Innovation for its digital security technology in November.

Enveil demonstrated its data encryption platform at FinovateFall 2017. Founded in 2016 and headquartered in Washington, D.C., Enveil announced in December that its ZeroReveal Compute Fabric, introduced last summer, would be accessible in the Microsoft Azure Marketplace. ZeroReveal Compute Fabric is a two-party platform that supports access to the company’s ZeroReveal solutions to protect data-in-use.

In September, Enveil won a spot on SINET’s 16 Innovators roster for 2018, the same month the company earned international Common Criteria security certification for its ZeroReveal solution. Enveil announced a technology integration with digital security firm Gemalto in August,

Learn more about the company and its founder in our profile from October 2017.

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Fiserv Welcomes A Trio of New Bank Partners

Fiserv Welcomes A Trio of New Bank Partners
By David Penn Posted on
Categories: Fiserv

Fiserv is living the fintech dream as more than 80 of its bank clients have completed a migration to outsourced core processing in the past 24 months.

This heightened state of happiness is set to continue as the company says nearly 60 more are scheduled to make the move in 2019, reports Antony Peyton of Fintech Futures (Finovate’s sister publication).

Three banks in the US have been wheeled out to offer some praise.

“After we moved to outsourced core processing, we asked ourselves what other services we should outsource to ensure customer information was held in a secure data centre. This led us to choose hosted infrastructure as a service and managed services from Fiserv,” said Yvette Hamm, vice-president, information security officer, First State Bank of Uvalde in Texas.

Robert Palmer, president and CEO of Missouri-based Bloomsdale Bank, is addicted to outsourcing love as the decision to move was due in part to the difficulty of finding qualified staff to manage technology in-house.

While for JD Bank in Louisiana, it considered doing it for more than two years before making the decision.

Bavo Gall, JD Bank’s EVP and chief information officer, said: “By outsourcing with Fiserv, we have maintained the flexibility to do what needs to get done.”

The bank moved its core processing, item processing and online banking systems to an outsourced environment over a single weekend in late 2017.

In other news, last week, Mi Bank in Michigan announced it was set to debut early this year. The new financial institution says it will use technology from Fiserv, including the DNA core banking system, to power its launch.

Headquartered in Brookfield, Wisconsin and founded in 1984, Fiserv demonstrated its Commercial Center: Security platform – in partnership with Samsung SDS – at FinovateFall 2017.

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Finovate Alumni News

By David Penn Posted on
Categories: Accenture, BankBazaar, CardFlight, Compass Plus, Enveil

On Finovate.com

  • Enveil, Unbound Tech Bring Data Security Triad to the Enterprise.

Around the web

  • CardFlight teams up with JetPay to give U.S. SMEs broader payment acceptance options.
  • Bahrain-based third-party PSP, SINNAD, launches a new processing platform built on Compass Plus’ TranzWare and TranzAxis.
  • Accenture to acquire management consultancy and technology services provider, Orbium.
  • BankBazaar adds business cards to its online marketplace for financial products courtesy of a partnership with Yes Bank.

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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Braintri Drives Insurtech Innovation in Europe

Braintri Drives Insurtech Innovation in Europe
By David Penn Posted on
Categories: Braintri

Braintri announced this week that its insurance subscription platform, hiPRO Connector, is going live as part of a new agreement with Benefia, a division of Vienna Insurance Group. The launch follows a successful deployment of the platform with Allianz, and builds on the Polish company’s recent partnerships with PKO Bank Polski and fellow Finovate alum, mBank.

The platform, developed in collaboration with Polish fintech hiPRO, enables customers to pay for their car insurance in monthly installments – a relatively new option in the industry. Customers provide information such as earnings, employment type, and number of dependents. The Connector randomly selects a participating bank which then reviews the customer’s credit in real-time.

The loans are financed by a bank, rather than the insurer – in this instance, Estonia’s Inbank and Poland’s Alior Bank. Braintri CEO Wojciech Zatorski pointed out that this means insurers are exposed to less risk, and gives banks the ability to sell micro loans. The platform launch will take place over several Benefia sales channels, including mobile.

Braintri’s announcement comes after a year of significant achievements, including the company’s merger with Finovate alum, iCompass, announced in November. Earlier in the year, the company was recognized for its contribution to PKO BP’s IKO mobile app.

“We entered 2019 with the feeling we achieved most of our goals,” Zatorski said in a statement. “Winning over new big brands proves that our efforts in providing the current customers with world-class IT services are noticed and appreciated.” With a nod toward the company’s yet-to-be completed merger, as well as planned expansion internationally, Zatorski added, “This will surely be the busiest year in Braintri’s six-year history.”

Braintri demonstrated its Jiffee payments solution at FinovateFall 2017, earning Best of Show honors. Based in Warsaw, Poland, and founded in 2013, the company returned to the Finovate stage in 2018 to demo its technology as part of FinovateEurope.

Interested in learning more about the latest fintech innovations from Europe? Join us for FinovateEurope 2019, February 12 through the 14, at London’s Tobacco Dock.

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CAN Capital Introduces New CEO Edward Siciliano

CAN Capital Introduces New CEO Edward Siciliano
By David Penn Posted on
Categories: CAN Capital, Capital Access Network

Alternative SME financing pioneer CAN Capital has a new captain: Edward Siciliano, a commercial financing veteran with more than 30 years experience, will join the company as its new Chief Executive Officer.

“CAN Capital’s experience, brand recognition, data, and partner relationships make it uniquely positioned to support the expansion of the small businesses that drive the U.S. economy,” Siciliano said. “I look forward to building a leadership team and working together to expand our offerings, invest in talent and technology, and help our customers grow.”

Siciliano comes to CAN Capital after serving as Chief Operating Officer, Interim CEO and EVP, and Chief Sales Officer for commercial financial and depository product provider Marlin Business Solutions. He previously worked at Xerox Corporation, AppliedTheory Corporation, and ALK Technologies. CAN Capital’s Executive Chairman praised Siciliano as a “proven leader” who has “served the needs of small businesses while building loyal teams that deliver innovative products and a great customer experience.”

The new CEO is the latest big headline for CAN Capital. Last fall, the company announced that it had boosted its capital capacity by up to $287 million courtesy of a transaction with Varadero Capital. Varadero played a key role in CAN Capital’s return to funding in the summer of 2017.

Siciliano’s arrival marks CAN Capital’s second C-level hire in a year; the company appointed financial services industry veteran Tom Davidson as Chief Financial Officer last spring. In December of 2017, CAN Capital added a trio of executives in technology, business development, and modeling and analytics.

CAN Capital demonstrated its Mobile Funder solution at FinovateFall 2013. Mobile Funder is a tablet-based tool that helps highly-mobile financial sales professionals sell alternative capital products to SMEs. With more than $7 billion in funds accessed and 81,000+ small businesses served, CAN Capital was founded in 1998 and is based in Kennesaw, Georgia.

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Plaid Acquires Quovo in $200 Million Deal

Plaid Acquires Quovo in $200 Million Deal
By David Penn Posted on
Categories: Plaid, Quovo

San Francisco-based fintech app provider Plaid has made its first major acquisition with the purchase of competitor Quovo for $200 million, reports Antony Peyton of Fintech Futures (Finovate’s sister publication).

Plaid hasn’t gone public on the price, but a source familiar with the deal spoke with CNBC to spill the financial beans. Plaid reckons the acquisition will make it easier for developers to build products that incorporate investment and brokerage data.

New York-based Quovo offers investment, insurance, and loan account coverage. Its platform is used by such firms as Betterment, Wealthfront and SoFi, as well as wealthtech companies like Stifel, Vanguard, Empower Retirement, and John Hancock.

Some of Plaid’s users include cryptocurrency exchange Coinbase, robo-advisors Betterment and Wealthfront (same as Quovo), trading app Robinhood and PayPal’s digital wallet Venmo.

Plaid plans to build a single platform to let users “build any financial application – from payments to lending to wealth management.”

This deal follows on from last month when Plaid enjoyed a $250 million Series C funding round. With that investment, the start-up earned an impressive valuation of $2.65 billion.

Back in October 201, Plaid linked up with JP Morgan Chase to help the bank make a move toward open banking by enabling account holders to share their financial data with third-party fintech applications.

Prior to that, in May 2018, the company expanded to Canada as its first international market.

The firm was founded in 2013 and has got the backing of some big names. These include Goldman Sachs, Amex, Citi, and Google Ventures. About two years ago Plaid got a handy $44 million in funding led by Goldman Sachs.

Plaid CEO and co-founder Zach Perret presented API for Financial Infrastructure at FinDEVr Silicon Valley 2014. Quovo is a two-time veteran of our developers conferences: sharing the stage with SoFi at FinDEVr New York 2017, and teaming up with Betterment at FinDEVr New York 2016.

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