Author: David Penn

$680 Million Raised by 29 Alums in Q1 2015

$680 Million Raised by 29 Alums in Q1 2015
By David Penn Posted on
Categories: Advanced Merchant Payments, AdviceGames, Aire, App Annie, Ayasdi, Betterment, Bill.com, BlueVine, Bolstr, Coinbase, CoverHound, Finsphere, Funding, Fundings, Global Debt Registry, Kofax, LendingRobot, Lendio, Linkable Networks, Micronotes, Motif Investing, peerTransfer, Pindrop Security, Q2, Ripple, SimplyTapp, Spreedly, Taulia, TransferWise, TrueLink Financial, Xero

cartoonmoneystackThe biggest surprise in our look at first-quarter funding is that the $677 million amassed by 29 Finovate alums was more than 20% of the $3.2 billion invested in the entire worldwide fintech sector.

The $677 million raised was $85 million (+14%) above the same quarter a year ago, and more than triple the first quarter of 2013.

Q1 2015 was also $133 million above the $544 million mark set in the fourth quarter of 2014.

It will be worth watching to see if this record-setting first quarter for Finovate alum fundraising will be a sign of more great things to come for capital-raising in 2015.

Top 10 Overall Investments

  1. Xero: $111 million in February
  2. Coinbase: $75 million in January
  3. Betterment: $60 million in February
  4. TransferWise: $58 million in January
  5. App Annie: $55 million in January
  6. Ayasdi: $55 million in March
  7. Motif Investing: $40 million in January
  8. Ripple Labs: $30 million in January
  9. Bill.com: $50 million in February
  10. Pindrop Security: $35 in February

Previous Quarterly Comparisons

  • Q1 2015: More than $676 million raised by 29 alums
  • Q4 2014: More than $544 million raised by 25 alums
  • Q1 2014: More than $600 million raised by 8 alums
  • Q1 2013: More than $155 million raised by 14 alums

January: More than $275 million raised by 14 alums

February: More than $264 million raised by 8 alums

March: More than $136 million raised by 7 alums

If you are an alum that raised money in the first quarter of 2015, and do not see your company listed, please drop us a note at research@finovate.com. We would love to share the good news! Funding received prior to becoming an alum not included.

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Edo Interactive Completes $20 Million Series E Round; Names Badran CEO

Edo Interactive Completes $20 Million Series E Round; Names Badran CEO
By David Penn Posted on
Categories: edo Interactive

edointeractive_homepage_May2015

In a round led by Baird Capital, VantagePoint Capital Partners, and Nashville, Tennessee-area investors, edo Interactive has raised $20 million in new funding. The Series E round takes the company’s total capital to more than $93 million.

In addition to the funding, edo Interactive announced a new president and CEO. Souheil Badran will take the helm from Ed Braswell, who founded the company in 2007; Badran remains with edo Interactive as executive vice chairman.

The new funding will be used to speed up development of edo Interactive’ s technology and products, expand sales and marketing, and explore business development and strategic partnerships, such as with Visa Europe, announced October 2014.

Badran previously worked as senior vice president and general manager for World Payments, and SMB of commerce for Digital River. He also served as SVP and general manager at First Data Corporation, VP and GM at VeriSign, and director of commercial banking at Digital Insight. Braswell pointed to this experience in welcoming Badran to the company he founded: ” Souheil has successfully developed global payment solutions and built businesses in the payments and commerce space,” Braswell said. “This expertise, combined with a proven track record of increasing revenues and profits, makes him an ideal match for edo.”

edo Interactive specializes in helping merchants provide personalized offers that are readily available via credit, debit, or mobile device. The company’s card-linked offers platform gives merchants insight into customer behavior and helps make future offers and rewards ever more in line with shopping habits. Edo has more than 200 banks enrolled on its platform, with a total cardholder reach of more than 200 million customers. The company’s more than 500 merchant partners include Whole Foods Market, Crate & Barrel, and The Body Shop.

edo Interactive last appeared on the Finovate stage as part of FinovateSpring 2012 in San Francisco. The company demonstrated its GeoCommerce Offers technology that enables a purchase at one merchant to trigger an offer or reward at another nearby merchant in real-time.

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WePay Closes $40 Million Series D Round Led by FTV Capital

WePay Closes $40 Million Series D Round Led by FTV Capital
By David Penn Posted on
Categories: WePay

WePay_homepage_May2015

Payment-processor WePay has just added $40 million in new funding to its investment total, courtesy of a Series D investment led by FTV Capital. Also participating in the investment was Japanese eCommerce company, Rakuten.

The Series D round takes WePay’s overall capital to more than $75 million. The funding will help WePay expand internationally, “potentially to the U.K. and Australia.”

In a statement from WePay, co-founder and CEO Bill Clerico published in the WePay blog, Clerico calls the funding “a testament to the amazing work of the nearly 100 men and women I have the privilege to work with every day.” To this point, Clerico announced plans to triple the size of his team over the next 18 months, adding another 200 workers.

WePay_FS2014_stage

April Rassa, WePay director of product marketing, and John Canfield, VP of risk management, demonstrated WePay’s Veda Risk Engine and API at FinovateSpring 2014.

WePay provides payment services for crowdfunding and e-commerce platforms, such as GoFundMe and Freshbooks, as well as brand names and public companies, such as Customlink and Constant Contact. The company has 1,000 partners using its API, with more than 500,000 merchants using WePay’s platform. The company has processed more than $1.5 billion in transaction volume since inception, and earlier this year announced a deal with Google Wallet that will put the former’s Instant Buy API in 200,000 e-commerce sites.

FTV Capital partner Chris Kinship will join WePay’s board as part of the deal. He noted the investing in WePay was a matter of the company “finally (getting) to the right size and scale and metrics. He added that his firm had considered investments in other fintech companies in the past, but had held back because the market “didn’t seem quite ready.”

“The reason we didn’t invest in Square and other businesses in the space is that we didn’t see something in their business model that could grow up at scale. WePay can,” Kinship said.

Founded in 2009 and headquartered in Palo Alto, Calif., WePay made its Finovate debut last year at FinovateSpring 2014 in San Jose, Calif., presenting its Veda Risk Engine and Risk API.

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Misys Launches FusionBanking Essence Islamic

Misys Launches FusionBanking Essence Islamic
By David Penn Posted on
Categories: Misys

MisysFusionIslamic_homepage_May2015

When you think of the underbanked, the Islamic world may not immediately come to mind. But the launch of Misys FusionBanking Essence Islamic banking solution suggests that the Finovate Best of Show winning banking innovator has been thinking about the sector for awhile.

Calling Islamic banking ripe for disruption, Mahmoud Tallat—product manager, FusionBanking Essence Islamic—pointed to the sector’s growth of more than 17% a year compared to its poor return on equity (12.6%) compared to the rest of the industry (25%). He also highlighted the importance of getting both Sharia-compliance and superior service right: A survey by PricewaterhouseCooper showed only 52% of Islamic banking customers believe their bank to be “truly Islamic.”

With regard to service, this means both providing the unique tools and resources required for Islamic banking, as well as increasing the number and quality of products available to customers. Misys notes that the average products per customer in conventional banking is more than twice that in Islamic banking (4.9 compared to 2.1).

Decades ago, Misys brought online the first Islamic bank in the United Kingdom, Al Rayan Bank, formerly the Islamic Bank of Britain. Misys believes that its platform experience—embrace of technology, 24/7 response, and social aspect—put it in the unique position to help “ambitious Islamic banks … accumulate new customers and increase their share of wallet.”

FusionBanking Essence Islamic features pre-configured, Sharia-compliant products, including Murabaha and Finance Ijara instruments. The platform uses these “pre-defined micro workflows” to give banks more control over individual elements of an Islamic banking product: In other words, it has already streamlined those regulatory elements that traditionally have made Islamic banking more complex and costly.

Founded in 1979 and headquartered in London, Misys has made three appearances on the Finovate stage, most recently in February at FinovateEurope 2015. Nadeem Syed is CEO.

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Planwise Raises $750,000, Nearly Doubling Total Capital

Planwise Raises $750,000, Nearly Doubling Total Capital
By David Penn Posted on
Categories: planwise

Planwise_homepage_May2015

Personal finance management specialist Planwise has raised $750,000 in new seed funding. The round was led by Homeloans Ltd., an Australia-based, listed lender, and featured participation by angel investors from Silicon Valley and Australia,

The investment brings the company’s total funding to $1.6 million.

Planwise provides consumers with a variety of tools to help with major financial milestones, from buying a car and managing personal loans to picking the right mortgage. The funding coincides with the launch of PlanwiseConnect, a home-buying/affordability browser plug-in that integrates with every property website in the United States, according to Planwise founder and CEO Vincent Turner.

PlanwiseConnect is being marketed directly to consumers. But lenders can license the technology and provide it to their potential mortgage customers, making sure to remain a part of the home search process.

Planwise was founded in 2011 and is headquartered in San Francisco, California. Planwise demoed its technology as part of FinovateFall 2011 in New York.

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Credit Sesame Raises $16 Million in New Funding

Credit Sesame Raises $16 Million in New Funding
By David Penn Posted on
Categories: Credit Sesame

CreditSesame_homepage_May2015

Q. What’s one of the few things more exciting than demoing your technology at Finovate this spring?

A. Having a $16 million investment waiting for you when you return home.

That’s the story of Credit Sesame, which combined its latest appearance at Finovate with news of $16 million in new funding.

The Series D round was led by Syncora Alternative Investments, and featured participation from IA Capital, Inventus Capital, Globespan Capital, Menlo Ventures, and other investors. IA Capital Partners served as an adviser to Syncora. The additional funding will help the company expand its credit and loan-management services; “ramp up” marketing; and open offices in San Francisco. Credit Sesame’s total capital stands at more than $35 million.

Credit Sesame specializes in helping consumers get access to and track their credit and loan data. The service provides free credit scores and monitoring, including daily alerts, identity-theft protection, and analytics tools to help consumers better manage their personal credit, or choose the right mortgage or auto loan. Credit Sesame has more than five million registered users, and monitors more than $128 billion in loans.

A five-time Finovate alum, Credit Sesame was founded in 2010 and is headquartered in Mountain View, California. The company launched its co-branded service with Siri integration at FinovateSpring 2015, featuring partner, Iontuition. The video of the demonstration will be available in our Video Archives section by the end of the week.

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P2P Lending Meets High Street Banking as Metro Bank Partners to Lend Via Zopa

P2P Lending Meets High Street Banking as Metro Bank Partners to Lend Via Zopa
By David Penn Posted on
Categories: Zopa

Zopa_homepage_May2015

Great Britain’s first P2P lender Zopa has teamed up with Metro Bank to combine P2P lending with “high street banking.” The first-of-its-kind deal makes Metro Bank the first bank in Great Britain to lend via a P2P platform.

Metro Bank will lend customer deposits through the platform. The bank has £3 billion in deposits and typically lends half that amount. Zopa currently provides £45 million in consumer loans a month, and has lent more than £850 million since inception.

A few metrics on Zopa:

  • More than £50m in interest earned by Zopa investors
  • More than 170,000 borrowers and more than 50,000 active lenders
  • Average loan size £7,500
  • Average historical return to lenders: 5%
  • Historical bad debt: 0.25% since 2010

The deal will make it possible for Zopa to expand significantly the loans it provides. Zopa co-founder and CEO Giles Andrews underscored the point in a statement, noting that the arrangement is a “clear sign that Zopa is a trusted platform not only for consumers, but also institutions to deploy their funds.”

Closer relationships between institutions and P2P platforms has drawn criticism from some who say that institutional participation will crowd out individual investors. Against this, Zopa notes that loans are allocated at random between institutions and individuals, and that both investors earn the same rates of interest based on loan length.

Founded in 2005 and headquartered in London, Zopa demoed its technology as part of FinovateStartup 2008.

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Feedzai Announces More than $17 Million in New Funding

Feedzai Announces More than $17 Million in New Funding
By David Penn Posted on
Categories: Feedzai

Feedzai_homepage_May2015

Finovate confirmed by email this morning that data science specialist Feedzai raised $17.5 million in new funding in a round led by Oak HC/FT. The capital takes Feedzai’s total to more than $22 million, and will help the company grow its engineering and sales talent to help meet demand for the company’s anti-fraud technology.

Participating along with Oak HC/FT in the Series B financing round were existing investors Espirito Santo Ventures and Sapphire Ventures (formerly SAP Ventures). Oak HC/FT will send two of its own, General Partner Patricia Kemp and Venture Partner Jonathan Weiner, to serve on Feedzai’s board of directors.

Kemp highlighted Feedzai’s big data science and machine learning background as key to her firm’s decision to invest. Feedzai’s technology analyzed more than 18 billion transactions in 2014, equaling more than $760 billion in payment volume. The company’s Fraud Prevention API for developers handled transaction growth of more than 300% “in late 2014.”

Feedzai_Sebastiao_FEU2014_stage

Feedzai CEO Nuno Sebastiao presented Feedzai Fraud Prevention at FinovateEurope 2014 in London.

Feedzai is one of a growing number of innovators leveraging big data/data science and machine learning for corporate clients. And while the Feedzai’s Fraud Prevention Suite is the company’s signature technology, its platform provides actionable, real-time business insights that go beyond risk and fraud management to give institutions the ability to tap into the “hidden value in the data to drive revenue growth.” Covering transactions and data flows across channels, Feedzai includes enterprises as diverse as First Data, Coca-Cola, and Vodafone among its customers.

Founded in 2008 and headquartered in San Mateo, Calif., Feedzai demonstrated its Fraud Prevention Suite at FinovateEurope 2014 in London. Nuno Sebastiao is CEO

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Friction is Good: Social Network for Credit Innovator, Vouch Raises $6 Million

Friction is Good: Social Network for Credit Innovator, Vouch Raises $6 Million
By David Penn Posted on
Categories: PayPal, Prosper, Vouch

Vouch_homepage

Fresh off its debut at FinovateSpring 2015 in San Jose, the world’s first social network for credit, Vouch, has raised $6 million in Series A funding from new and existing investors. Vouch’s total capital now stands at more than $9 million, and will help fuel the company’s ability to expand both the number and size of loans offered to its customers.

New investors included Cooley LLP, Data Collective, Stanford StartX Fund, and Core Innovation Capital, whose founder and managing partner, Arjan Schütte, will join the Vouch board of directors. They were joined by existing Vouch investors, AngelList, First Round Capital, Greylock, and IDG Ventures.

If you didn’t think P2P lending could get any more “P”, then you don’t know Vouch. The online lender enables borrowers to develop a “Vouch network”, including friends and family willing to “vouch” for their loans. By vouching, the friend or family member agrees to pay some increment of the loan if the borrower does not. Borrowers can take out larger loans on better terms based on the size and quality of their network. Schütte referred to the platform “simple, yet transformative.”

Vouch provides installment loans ranging from $500 to $15,000, with interest rates between 5% and 30%. Borrowers must have a minimum FICO score of 600, and they cannot be engaged in bankruptcy or foreclosure proceedings. Vouch charges a loan-origination fee between 1% and 5% of the amount borrowed.

Vouch combines the increasingly widespread tactic of leveraging social networks to learn more about an individual borrower’s creditworthiness with proven financial strategies like co-signing and sponsorship. TechCrunch reports that more than 70% of the company’s traffic is mobile (both iOS and Android), and more than half the platform’s users are female and older than 35 years of age. According to Vouch co-founder and CEO Yee Lee, a quarter of those using the technology are first-generation immigrant to the U.S., as he is. Founding the company along with Lee in 2013 were Sue Horn (formerly of Prosper) and Hugh Olliphant (formerly of PayPal). Lee is also a PayPal veteran.

Based in San Francisco, Vouch was the first company to present at FinovateSpring last week. CEO Yee Lee started off his demo and the event with a bang. Explaining how his platform likes the idea of keeping “friction intentionally high” during the onboarding process for both potential borrowers and potential vouchers, Lee offered the eyebrow-raising observation that sometimes in fintech “friction is good.”

Find out why in Vouch’s live demo at FinovateSpring 2015 available in our Video Archives later this week.

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Finovate Alumni News

By David Penn Posted on
Categories: defi Solutions, Feedzai, Financial Guard, Google Cloud Platform, Lending Club, LikeFolio, Motif Investing, Novabase, Taulia, TransferWise, Vouch, Xero

On Finovate.com

  • Feedzai Announces More than $17 Million in New Funding
  • Friction is Good: Social Network for Credit Innovator, Vouch Raises $6 Million

Around the web

  • Financial Guard launches its enhanced, fee-transparency service.
  • defi SOLUTIONS acquires OpenRule Systems APM.
  • Benzinga interviews Andy Swan, LikeFolio co-founder.
  • Wizzio by Novabase featured at IBM World of Watson event.
  • CNBC talks about P2P currency transfer with TransferWise CEO Kristo Kaarmann.
  • Motif Investing earns spot on CNBC’s Disruptor list.
  • Xero ranked #1 Forbes Most Innovative Growth Company 2015.
  • Lending Club receives Entrepreneurial Company of the Year Award from Harvard Business School Association of Northern California.
  • Xero scoops Company of the Year at annual Hi-Tech Awards.
  • Payments Source looks at how Taulia speeds up payments for businesses.
  • Google drops cloud computing prices by up to 30%.

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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FinovateSpring 2015: Twitter Talk from San Jose

FinovateSpring 2015: Twitter Talk from San Jose
By David Penn Posted on
Categories: FinovateSpring 2015

FS2015_TwitterPostArt

There are many ways to enjoy a Finovate conference. Following along with the conversation, debate, and occasional comic turns of our attendees on Twitter (@Finovate) is definitely one of them.

And the stats seems to back it up. Courtesy of seen.co and its analysis of #Finovate of the past week, we learned that more than 1,300 people created more than 6,000 posts reaching well over 3 million Twitter followers.

Still, numbers tell only half the tale of FinovateSpring 2015. For the rest of the story, enjoy this small sample of some of those 6,000 tweets.

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Finovate Alumni News

By David Penn Posted on
Categories: Acculynk, Ayasdi, Betterment, Cortera, FIS, Forte Payment Systems, IDTheft 911, LearnVest, Market Prophit, Motif Investing, PayPal, Place2Give, ProfitStars, QuantConnect, SimplyTapp, Yodlee

Around the web

  • Market Prophit unveils its social market sentiment smart beta index.
  • Silicon India takes a look at Ayasdi’s plans to use the capital raised in its latest $55 million funding.
  • Financial Advisor IQ highlights Betterment and Motif Investing in its discussion of millennials and machines.
  • QuantConnect is now integrated with Interactive Brokers.
  • ProfitStars celebrates surpassing 600 FIs using its Remote Deposit Anywhere technology.
  • FIS wins Best Core Banking, Best Outsourcing Project honors at Asian Banker Technology Implementation Awards.
  • TechCrunch: Yodlee’s Joe Polverari writes about LearnVest and its acquisition by Northwestern Mutual.
  • ABC’s 7 On Your Side quotes IDTheft 911 founder Adam Levin on protecting your driver’s license from identity theft.
  • Connect Financial Software Solutions to provide real-time, P2P payments courtesy of new partnership with Acculynk.
  • Cortera announces new releases of eCredit Software.
  • Zoho partners with Forte Payment Systems to offer electronic payments directly with Zoho Finance apps.
  • Dexterity Ventures’ Place2Give releases GIVE_api v. 2.0.
  • Pymnts interviews SimplyTapp president and co-founder Ted Fifelski.
  • PayPal to be publicly traded on NASDAQ in Q2 2015 with its original stock ticker symbol PYPL.

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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