Author: David Penn

Six Tech Startups You Need to Know: Meet FinovateFall’s Sustainability Scholarship Winners

Six Tech Startups You Need to Know: Meet FinovateFall’s Sustainability Scholarship Winners
By David Penn Posted on
Categories: Alumni News, FinovateFall 2022

Earlier this year, we unveiled our Sustainability Scholarship Program for demoing companies. Our new initiative supports startups that are embracing environmental sustainability, social equity, and responsible governance (ESG).

With FinovateFall just weeks away, we are excited to share the names of the six demoing companies to win Sustainability Scholarships for our upcoming autumn event, September 12 through 14, in New York.

Remember that early-bird savings for FinovateFall end after September 2nd. Register today and save your seat!

Daizy – Winner of the Sustainability category

Headquartered in the U.K and founded in 2019, Daizy helps users become more conscious investors with an AI that gives them the data-driven stories behind America’s biggest companies.

Deborah Yang is co-founder and CEO. Follow Daizy on Twitter. Connect on LinkedIn.

Debbie – Winner of the Female Founded/Owned category

Based in Miami, Florida and founded in 2021, Debbie is the Noom for debt loss. The company leverages behavioral psychology and rewards to help users pay off 3x more debt and help lenders recession-proof members.

Co-founder Frida Leibowitz is CEO. Follow Debbie on Twitter. Connect on LinkedIn.

Deposits – Winner of the Person of Color Founded/Owned category

Founded in 2019 and headquartered in Dallas, Texas, Deposits is a cloud-based fintech platform that gives banks and brands an easy-to-use turnkey solution to build best-in-class financial experiences from payments to lending.

Joseph Akintolayo is CEO. Follow Deposits on Twitter. Connect on LinkedIn.

Energy Shares – Winner of the Environmental category

Headquartered in Pasadena, California and founded in 2020, Energy Shares is a FINRA registered broker-dealer and equity crowdfunding platform for utility scale renewable energy projects in the U.S.

Follow Energy Shares on Twitter. Connect on LinkedIn.

Investii – Winner of the Social category

Based in Milwaukee, Wisconsin, and founded in 2020, Investii is an actionable, wealth-building app empowering healthy savings habits, financial confidence, and alternative credit data.

Nishant Deshpande is co-founder and CEO. Connect with Investii on LinkedIn.

MinervaAI – Winner of the Governance category

Founded in 2018 and headquartered in Toronto, Canada, MinervaAI is an AI-driven platform that provides simple and effective sanctions, KYC, KYB, IDV, and enhanced due diligence to help businesses grow.

Co-founder Jennifer Arnold is CEO. Follow MinervaAI on Twitter. Connect on LinkedIn

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Two from Down Under: Hello Clever Raises Seed Funding; Heritage Bank Launches International Payments Solution

Two from Down Under: Hello Clever Raises Seed Funding; Heritage Bank Launches International Payments Solution
By David Penn Posted on
Categories: Daily news, Funding
  • Australia’s Heritage Bank teamed up with Convera to launch its new online international payments solution.
  • Convera was formerly known as Western Union Business Solutions (WUBS) and was acquired for $910 million in 2021 and subsequently established as a standalone company.
  • Hello Clever raised $3.1 million (A$4.5 million) in seed funding in a round led by Vectr Fintech Partners. The company enables shoppers to get real-time cash back from participating merchants.

A pair of fintech headlines out of Australia have caught our eye at mid-week. First up, Heritage Bank, a financial institution based in Queensland and serving customers across the country, announced the launch of its new online international payments offering, courtesy of a partnership with Convera. The new service will enable Heritage Bank customers to send and receive money to locations around the world directly from their online and mobile bank accounts. The service will be available 24 hours a day, regardless of where the banking customer lives, and operates in near real-time.

“With the explosion of online purchases now taking place across international marketplaces, our new international payments service provides a seamless facility for our members,” Heritage Bank CEO Peter Lock said. “This fantastic new service allows our members to send and receive money internationally, direct from our online and mobile banking system, in close to real time and around the clock no matter where they are.”

The new service is made possible thanks to a partnership with Convera, a payments technology solution provider known up until recently as Western Union Business Solutions (WUBS). Western Union sold WUBS to Goldfinch Partners and The Baupost Group for $910 million last year, and the company subsequently was set up as a standalone entity – Convera. Processing more than $110 billion in total payments volume in 2020 and more than $170 billion in 2021, WUBS represented 7% of Western Union’s revenues in 2021.

On its own, Convera is the largest non-bank fintech in the international B2B payments industry with capabilities in more than 140 currencies across 200+ countries and territories, and more than 60 international banking partners. The company also has more than 30,000 SMBs, financial and educational institutions, law firms, and NGOs among its customers.

“Our research forecasts that one-third of post-COVID economic recovery in Australia will come from modern, digital, deliverable services which is why we’re committed to supporting and implementing the digital transformation of financial institutions and providing the tools and solutions to do so,” Convera Regional Vice President and Head of APAC Sam Fitzpatrick said.

Second up: Hello Clever, an Australia-based fintech that gives consumer’s real-time cash back, has raised $3.1 million (A$4.5 million) in seed funding. The round was led by Vectr Fintech Partners and featured participation from CrossFund, Yolo Investments, Magnivia Ventures, Son Tech Ventures, Boston Ventures, and others.

“2022 has been an exciting year,” Hello Clever co-founder and CEO Caroline Tran wrote on the company’s blog this week. “We have been working diligently to launch our full suite of products and now we have achieved a significant milestone – being the first company to pioneer ‘Buy to Earn’ or a new category in payments that democratizes rewards in a different way.”

Hello Clever’s “buy-to-earn” ecosystem connects shoppers and businesses to make shopping and payments an easier, more seamless process for all involved. Offering itself as an alternative to Buy Now, Pay Later platforms, Hello Clever leverages open banking, fast payments, and AI to help consumers locate the best merchants for their shopping preferences and then provides cash back in real time when consumers shop at participating retailers. Hello Clever also gives consumers the ability to track their spending in real-time across bank accounts. The company’s real-time payment API is powered by the New Payments Platform (NPP), PayTo, and PayID.

“We want to introduce a new ecosystem that allows consumers to be financially healthier and our merchant partners to increase sales (and) reduce operating costs,” Tran wrote. “That’s why we are not a single product – it’s a ‘Clever way’ of executing payment strategies to achieve better business outcomes. From Hello Clever as a consumer facing app, we know have evolved into building Hello Clever Business, Hello Clever Business API, and Hello Clever Yield – which is our path into financial investing for Gen Zs.”

Founded in 2021, Hello Clever is headquartered in Surry Hills, New South Wales.

Photo by Ben Mack

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Point and Shoot: Rippleshot and Flashpoint Team Up to Fight Card Fraud

Point and Shoot: Rippleshot and Flashpoint Team Up to Fight Card Fraud
By David Penn Posted on
Categories: Alumni News, Daily news, Rippleshot
  • Fraud detection and prevention specialist Rippleshot announced a partnership with risk intelligence company Flashpoint to help fight payment card fraud.
  • The partnership will combine Rippleshot’s network of more than 4,500 FIs with Flashpoint’s fraud mitigation technology to help firms detect data breaches and fraudulent activity faster.
  • A 2022 Finovate Awards finalist, Rippleshot is based in Chicago, Illinois. The company made its Finovate debut in 2014.

Fraud detection and prevention solution provider Rippleshot has teamed up with risk intelligence firm Flashpoint to help financial institutions take more proactive steps to fight payment card fraud.

Rippleshot’s technology relies on a data consortium of more than 4,500 financial institutions – as well as AI/ML, automation, and data-driven strategies – to quickly detect data breaches and determine when and where the breach occurred. Combining Rippleshot’s compromised and high-risk merchant data and insights with Flashpoint’s payment and credit card fraud mitigation solution will enable financial institutions to upgrade their fraud prevention strategies.

“Flashpoint is a market leader in delivering intelligence that provides a detailed view into what cyber criminals in illicit communities are seeing,” Rippleshot CEO and co-founder Canh Tran said. “By pairing that with Rippleshot’s compromised and high-risk merchant data, this partnership will equip the industry with unparalleled financial intelligence to react much more quickly to instances of verified card fraud and proactively stop further damage from fraudsters.”

A Finovate alum since its debut at FinovateSpring in 2014, Rippleshot was named a finalist in the Best Back-Office/Core Services Solution category of the 2022 Finovate Awards for its collaboration with fellow Finovate alum Fiserv. The international financial services technology company embraced Rippleshot’s Card Risk Office Fraud Warning product, an early breach detection solution that enables FIs to spot potentially fraudulent activity 30 to 60 days before network alerts.

“Card fraud is a complex and ever-changing problem that demands a collaborative and proactive approach to tackle it effectively, so that cardholders can feel secure about the financial information they are using, storing, or transacting with,” Tran said when the partnership was announced. “We are excited to partner with Fiserv, a fintech leader that shares our passion and expertise when it comes to fraud-fighting technologies.”

Founded in 2013 and headquartered in Chicago, Illinois, Rippleshot has raised $7.3 million in funding according to Crunchbase. The company includes Method Capital , CMFG Ventures, and Wintrust Ventures among its investors.

Photo by Pankaj Biswas

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The Conversation Continues: Greg Palmer and the Finovate Podcast’s Summer Series

The Conversation Continues: Greg Palmer and the Finovate Podcast’s Summer Series
By David Penn Posted on
Categories: David's column, Podcasting

Greg Palmer’s Finovate Podcast continues to be the source of many of fintech’s most compelling conversations.

From discussions with innovation experts to deep dives with veterans of the VC world, the Finovate Podcast is a great way to learn about the trends that fintech enthusiasts are most enthusiastic about.

Here’s a rundown of recent episodes you might have missed over the summer.

Find the Finovate podcast at Soundcloud and follow Greg Palmer on Twitter for the latest in programming news and updates.

Michael Butler, President and CEO, Grasshopper Bank

Finovate Podcast host Greg Palmer talks with Grasshopper Bank President and CEO Michael Butler on surviving and thriving as a neobank, and lessons for the broader fintech ecosystem. Episode 142.

“(Grasshopper) is a company that is focused on providing digital financial solutions to the business and innovation economy, mainly SMBs that are focused on technology and are technophiles by nature. We think there’s a big demand pull that has been coming for some time in the business side, and we think it’s the next great place for disruption from a digital banking perspective.”

Tony Ulwick, Creator, the Outcome-Driven Innovation Process

Greg Palmer introduces Tony Ulwick, founder and CEO of Strategn and creator of the Outcome Driven Innovation process, to Finovate audiences in this podcast conversation. Ulwick explains the importance of focusing on innovation that matters and successfully bringing new ideas to the market. Episode 141.

“I thought: if we just knew the metrics they were going to use to judge the value of our product a year and a half ago when we started developing it, we could just design the product to meet those metrics and we’d win in the marketplace. It sounds simple enough. But the (next) thought was: what are those metrics? How can we capture them? Do they exist?”

Tiffani Montez, Principal Analyst, Insider Intelligence

Podcast host Greg Palmer talks with Tiffani Montez, Principal Analyst with Insider Intelligence. In their conversation, Montez discusses strategies for keeping customers happy in times of economic uncertainty – and finding opportunity in challenging times. Episode 140.

“How do you safeguard consumer trust? We know that digital trust is the confidence that consumers place in their bank’s digital channels. And they have a prime opportunity to build this up as a commodity. We know over the last year the largest U.S. banks have come to aid in a time of pandemic related crisis. And customers have repaid that flexibility with greater trust in their primary financial institutions.”

Zach Noorani, Partner, Foundation Capital

Greg Palmer and Zack Noorani, Partner with Foundation Capital, talk about neobanks – the what, the why, and the what happens next. Episode 139.

“I would be remiss not to say that I struggle with startup nomenclature like this (neobank). These organisms evolve so quickly. Terms like “neobank” – at first they seem grandiose, way beyond what the businesses actually are. And then, before you know it, the end up feeling overly narrow and constricting.”

Photo by Pixaba

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Currencycloud and Future FinTech Labs Team Up to Launch Remittance App Tempo

Currencycloud and Future FinTech Labs Team Up to Launch Remittance App Tempo
By David Penn Posted on
Categories: Alumni News, Currency Cloud, Daily news
  • Currencycloud teamed up with Future FinTech Labs (FTFT Labs) to help the New York City-based fintech launch its Tempo app.
  • Tempo is designed to make it easier, more secure and more effective for U.S. immigrants to send money overseas.
  • Acquired by Visa in 2021, Currencycloud has processed more than $100 billion in cross-border money transfers since inception in 2012.

Global payments solutions and infrastructure company Currencycloud has partnered with Future FinTech Labs (FTFT Labs) to help the NYC-based fintech launch a new remittance solution for U.S.-based immigrants. The new offering, an app called Tempo, will help immigrants living in the U.S. send money securely to North America, Italy, Spain, France, Germany, the United Kingdom, India, and the Philippines.

Tempo will gives FTFT Labs customers access to a multi-currency wallet that makes sending money internationally easier and more cost-effective compared to other high-fee remittance services. Tempo app users will be able to leverage both FTFT Labs’ Conversion Tool to buy and trade currencies and use FTFT Labs’ Funds feature to top off their digital wallet.

“Tempo represents an easy, fast, and secure way to transfer money cross-border,” FTFT Labs CEO Sean Liu said. “Working with Currencycloud and using the breadth of services it allows us to offer our customers a seamless process from start to finish. We are confident we will be able to continue to make remittance a seamless process for our end users.”

Tempo users pay a fee of $2.99 pre-transaction – although the company is currently offering customers fee-free transactions when they sign up. Transfers via Tempo take place instantly rather than over the three business days typical of other money transfer apps, and users can send as little as $20 or as much as $1,500. Tempo sees its transfer amount limit as an advantage compared to other money transfer apps that do not have a limit, seeing the limit as a way to help ensure “a high level of security, by design, for users.” The Tempo app is available for both Android and iOs devices.

Making its Finovate debut in 2012, Currencycloud most recently demonstrated its technology at FinovateSpring 2018. The London-based company serves banks, fintechs, and foreign exchange brokerages, helping them and their customers make seamless and secure cross-border transactions in multiple currencies. Since inception, Currencycloud has processed more than $100 billion transferred between more than 180 countries. Acquired by Visa in 2021, the company includes fellow Finovate alums Dwolla and Mambu among its partners. Currencycloud maintains offices in New York, Amsterdam, Cardiff, and Singapore.

“Migrants in the U.S. should be able to send money cross-border without friction and without prohibitive costs,” Currencycloud VP of Sales Lewis Nurcombe said. “A fintech like Future FinTech Labs understands the needs of working people wanting to send money to family and friends, and as such is successfully reimagining how money flows for this huge market.”

Future FinTech Labs is a subsidiary and research and development center for FTFT Group. FTFT Labs is dedicated to designing, developing, and providing operational support for FTFT’s digital banking and payment services offerings.

Photo by Francesco Ungaro

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Finovate Global Latin America: Geopagos Raises $35 Million; Paystand Acquires Mexico’s Yaydoo

Finovate Global Latin America: Geopagos Raises $35 Million; Paystand Acquires Mexico’s Yaydoo
By David Penn Posted on
Categories: ACI Worldwide, Finovate Global, PayStand, Ripple

Active in 15 countries in Latin America, payments infrastructure provider Geopagos has secured an investment of $35 million. The equity funding round was led by Riverwood Capital and featured participation from Endeavor Catalyst. The sum represents the company’s first institutional financing and will be used to fuel the development of new embedded payments solutions and help the firm expand throughout Latin America.

Geopagos provides financial institutions, fintechs, retailers, software companies and other organizations with end-to-end digital solutions to help them launch or grow their payment acceptance businesses in the area. These solutions include terminals that enable mobile phones to operate as point of sale devices as well as technology that turns websites into e-commerce platforms.

With clients including Santander, BBVA, Banco Estado de Chile, and Finovate alum Fiserv, Geopagos processes more than 150 million transactions and more than $5 billion in volume a year. The Buenos Aires-based company was founded in 2013 by Sebastián Núñez Castro, Julián Lisenberg, Fernando Tauscher, Raúl Oyarzun and Damián Harburguer.

“Latin America is a market with very low card penetration and Geopagos is well positioned as a software enabler and infrastructure provider to boost card acceptance and digital payments across the region,” Riverwood Capital co-founder and managing partner Francisco Álvarez-Demalde said.

Speaking of payments in Latin America, blockchain-enabled accounts receivable and B2B payments company PayStand has acquired Yaydoo, an accounts payable, cash flow management, and liquidity solution provider based in Mexico. Yaydoo is one of the fastest-growing startups in Mexico, with more than 150 employees working in more than six different countries. Founded in 2017 and operating throughout Latin America Yaydoo raised $20.4 million in Series A funding last year and this year was named a “Súper Empresa 2022” and a “Súper Empresas para Mujeres 2022” by Expansión Top Companies México.

“Together, PayStand and Yaydoo will redefine the boundaries of B2B fintech across the continent,” PayStand CEO Jeremy Almond said. “The combined company will be one of the first global B2B blockchain platforms at a significant scale. The resulting company will have processed over $5 billion in payments, added 300 additional employees, and built a network of over 500,000 connected businesses, the largest of any commercial B2B blockchain in the world.”

Founded in 2013, PayStand made its Finovate debut at our developers conference, FinDEVr Silicon Valley, one year later in 2014. The company leverages blockchain and cloud technology to digitize receivables, automate processing, lower time-to-cash, remove transaction fees, and drive new revenue. A member of the 2021 CB Insights Fintech 250 and named to the Inc. 5000 for a second year in a row in 2021, PayStand has secured $86 million in funding, most recently raising $50 million in a Series C investment led by NewView Capital and featuring participation from SoftBank’s SB Opportunity Fund and King River Capital.

Here is our look at fintech innovation around the world.

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Photo by Nikita Ananjevs

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More from the Masters: A Sneak Peek at FinovateFall’s Top Keynote Speakers

More from the Masters: A Sneak Peek at FinovateFall’s Top Keynote Speakers
By David Penn Posted on
Categories: FinovateFall 2022, Speaker series

Earlier this month we highlighted a handful of the Mastermind Keynotes scheduled for FinovateFall 2022 in New York, September 12 through 14.

This week, we take a look at more of the fintech entrepreneurs, analysts, and experts who will share their knowledge and insights into the fintech industry at FinovateFall next month.

Day One will feature Joe Lichtenberg, Global Head of Product and Industry Marketing for Intersystems, with his Mastermind Keynote address: How Next Generation Architectures Empower Financial Services Firms with Trusted Business Insights. Lichtenberg’s morning presentation will introduce a new architectural approach that is providing business decision makers with a consolidated, accurate, and real-time view of their business.

Personetics President of the Americas Jody Bhagat will deliver a Mastermind Keynote: How Mid-Market Banks Can Find Their Sweet Spot with Digital Plus Human Interactions in the afternoon of Day One. Bhagat will discuss how mid-market banks can evolve their relationship models to do more of what they do best: supporting customers with advanced money management capabilities and Digital Plus Human interactions.

VantageScore EVP and Chief Product Officer Rikard Bandebo will deliver a Mastermind Keynote in the afternoon of Day Two of FinovateFall. In a presentation titled Leveraging Data Analytics to Drive Financial Inclusion, Bandebo will talk about new tools and analytic strategies to discover not just newly scoreable consumers, but newly lendable consumers, as well.

Day Three of FinovateFall will feature a Mastermind Keynote during the Payments Stream. Tom Ward, Partner with Sidley Austin LLP and recent CFPB Enforcement Director, will deliver an address titled The CFPB in the Biden Administration – Enforcement and Regulatory Priorities for Fintechs in 2022 and Beyond. Ward’s presentation will explain the CFPB’s enforcement priorities as they relate to fintech and the organization’s current focus within the industry.

Co-founder and Chief Impact Officer for Symend Tiffany Kaminsky will deliver a Mastermind Keynote during the Customer Experience Stream on Day Three. Kaminsky’s presentation – Upping the Ante: Using the Science of Decision-Making for Effective Customer Engagement – will help businesses leverage behavioral science to better engage with customers and hyper-personalize customer outreach efforts.

Our Artificial Intelligence Stream on Day Three will feature a Mastermind Keynote from Kore.ai SVP of Marketing Michael Kropidlowski. In his address – Creating Extraordinary Customer and Employee Experiences for the Banking World – Kropidlowski will show how conversational AI is revolutionizing the customer experience in banking.

Visit our FinovateFall 2022 hub today and reserve your seat. Register by September 2nd and take advantage of early-bird savings!

Photo by Helena Lopes

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Teslar Software to Streamline and Automate Lending for Missouri-Based The Seymour Bank

Teslar Software to Streamline and Automate Lending for Missouri-Based The Seymour Bank
By David Penn Posted on
Categories: Alumni News, Daily news, Teslar
  • Teslar Software announced a partnership with Missouri-based community bank, The Seymour Bank.
  • Courtesy of the deal, The Seymour Bank will use Teslar’s lending process automation platform to modernize and streamline its commercial lending business.
  • Teslar Software made its Finovate debut at FinovateSpring 2015 in San Francisco.

The Seymour Bank, a Missouri-based financial institution with more than $137 million in assets, has selected Teslar Software to enhance its commercial lending strategy. The bank will use Teslar’s lending process automation platform to reduce reliance on manual processes and boost efficiencies..

“With Teslar, we will become more accessible to our customers, delivering a portal that allows them to easily and quickly monitor the status of their loans and securely communicate with us,” The Seymour Bank vice president Heather Johns said. “Plus, Teslar’s automated workflows will save time for our employees, resulting in a better, more efficient experience.”

In addition to the digital customer portal, designed to improve convenience, The Seymour Bank will also leverage Teslar’s technology to improve its ability to track documentation and monitor exceptions. The institution, founded in 1939 and headquartered in Seymour, MIssouri, outside of Springfield, prides itself in its commitment to local involvement and customer service. But, in the words of Johns, the bank “also want(s) to be recognized for modern technology and seamless experiences.” The partnership with Teslar will bring the benefits of modern, automated technology to both the bank’s customer-facing and back office operations.

“The Seymour Bank is a locally owned bank that has prioritized serving its customers and community for more than 80 years,” Teslar Software founder and CEO Joe Ehrhardt said. “We look forward to supporting the bank as (it provides) more digitized, seamless interactions to enhance both the customer and employee experience.”

Teslar’s partnership with The Seymour Bank comes just weeks after the firm announced that it had teamed up with National Bank & Trust to streamline the Texas-based financial institution’s lending process with a new suite of automated workflow and portfolio management tools. Chartered in 1888 as The First National and headquartered in La Grange, Texas, National Bank & Trust is a full-service bank dedicated to providing customized service, “lightning fast lending”, and future-focused technology.

Winner of the 2020 Finovate Award for Best Fintech Partnership for its PPP.bank initiative – a free website developed in collaboration with Citizens Bank of Edmonds and Mark Cuban – Teslar Software was founded in 2008 and made its Finovate debut at FinovateSpring in 2015. Since then, the company has grown into a robust, portfolio management system provider and strategic partner to help community and regional banks compete in an increasingly tough and crowded environment for lending services.

Teslar is making its return to the Finovate stage next month for FinovateFall 2022 in New York. Visit our FinovateFall 2022 event hub to learn more.

Photo by Afif Kusuma

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Building Financial Inclusion: Elizabeth McCluskey, Director of the Discovery Fund at CMFG Ventures

Building Financial Inclusion: Elizabeth McCluskey, Director of the Discovery Fund at CMFG Ventures
By David Penn Posted on
Categories: Diversity in Fintech, Interview, Speaker series, Women in Fintech

What is venture capital doing to help promote fintech innovators who come from underrepresented groups and communities?

We caught up with Elizabeth McCluskey, Director of The Discovery Fund at CMFG Ventures, to talk about her work in supporting underrepresented entrepreneurs that are building solutions to drive financial inclusion.

We discussed her own extensive experience in financial services, working in both investment banking and wealth management before moving to venture capital. We also learned why she believes it is important to invest in female founders and founders from communities that are underserved by traditional financial institutions.

Why did you decide to transition from investment banking and wealth management to venture capital? What do you enjoy about working at a venture capital firm?

Elizabeth McCluskey: Investment banking is transactional. I enjoyed being part of transformational deals for companies but missed being there for the long-term impact. When I pivoted to wealth management, I was able to develop more longevity in client relationships, but the investments were focused on public equities with which I had minimal connection. These experiences led me to find the ideal balance in venture capital. Now I can build more intimate relationships with portfolio companies and invest in people and ideas that are meaningful and important to me. It brings joy and satisfaction to support their long-term growth and success.

Tell me more about your current role at CMFG Ventures and the Discovery Fund.

McCluskey: CMFG Ventures is the venture capital arm of CUNA Mutual Group. CMFG Ventures invests in fintechs to help financial institutions grow and provide a brighter financial future for all. The firm adds value to fintechs by leveraging its well-established network of over 6,000 financial institutions and suite of complimentary technology solutions. Since 2016, CMFG Ventures has invested in nearly 50 fintech companies and its Discovery Fund has invested in 14 additional early-stage companies led by BIPOC, LGBTQ+, and women founders.

I am the director of the Discovery Fund. The Discovery Fund was created to support underrepresented entrepreneurs who are building solutions for financial inclusion. We plan to invest $15 million over the next three years in early-stage fintech companies. Through my role, I’m able to see the full scope of venture capital investing, including but not limited to:

  • Sourcing deals and meeting entrepreneurs
    • Conducting due diligence
    • Negotiating the terms of the deal
    • Providing long-term support for entrepreneurs’ journeys by helping them scale, network, and find the resources they need to continue to succeed.

Why is it important to invest in diverse founders, especially women-led businesses? And what qualities you look for when investing in these companies?

McCluskey: Women entrepreneurs receive less than 3% of venture capital funding. This staggering number demands that we take a step back and focus on supporting diverse founders, especially women-led businesses, to improve equity in the venture capital space. This is not just the right thing to do – it’s good business. A 2018 BCG study concluded that women-founded businesses yielded two times as much revenue per dollar invested as those founded by men.

Women and diverse founders who have been historically underserved by traditional financial services are working hard to create the financial inclusion they wish they had. We are investing in entrepreneurs like them who are deeply connected to the problems they’re solving. Empowering underrepresented leaders is already creating new opportunities for liquidity management, wealth management, credit access, asset protection, and more.

Can you share more about the women-led businesses that CMFG Ventures invests in and supports? How are they helping make the financial services industry more inclusive?

McCluskey: CMFG Ventures has made investments in multiple women-led companies, such as The Beans, Climb, Caribou, and Frich to help the financial services industry become more inclusive.

  • The Beans simplifies the path to financial balance through evidence-based design and cutting-edge technology, so consumers stress less about money and focus on what they love.
  • Climb is a student lending and payments platform intended to make career education more affordable and accessible.
  • Caribou enables financial advisers to engage their clients in healthcare planning to support life transitions and build stronger financial futures.
  • Frich makes money social. It helps Gen Z develop better financial habits leveraging the power of community and benchmarking.

These female-driven fintechs are transforming the financial services space and improving the financial lives of everyday Americans.

What advice do you typically share with women founders? What about those looking to break into the VC space?

McCluskey: I would give the same advice to women founders as I do with men: always ask for feedback, especially to better understand why someone is telling them “no”. Founders who send updates over time allow me to track their progress, including growth and consistency of their business plans. In several cases, I’ve ended up investing in companies that I passed on in earlier rounds. And even if someone says “no” to doing business together, they can still be a valuable ally. Attempt to stay in touch and leverage their networks. People are often willing to share their connections and provide valuable guidance.

As for those looking to break into the VC space, I believe it is slowly becoming more inclusive and representative, yet it is still a very network-based profession. Similar to my advice for entrepreneurs, start with one person you know (or cold outreach via alumni networks, common interest groups, etc.). From there, ask every person you talk to for an introduction to at least one other person. Focus on growing your network with the goal of building genuine relationships, not necessarily getting a job right away. This is a long-term investment in your career.

We’re more than halfway through the 2022, what do you predict for the rest of the year?

McCluskey: After record levels of investments in 2021, we all knew things had to cool off. However, I believe the pace at which this has happened surprised VCs and entrepreneurs alike.

In fact, startup funding has fallen by 23% over the last 3 months, bringing us back to 2019 levels. For many, it probably feels like the sky is falling, but there is still a significant amount of money in circulation. Venture capitalists today, and by extension founders, are more focused on “real” metrics versus vanity metrics when deciding which companies to fund. The companies that will do well in the second half of the year will have measurable revenues, not just wait lists, and will be managing costs and runway to drive profitability, not endless cash burn.

Photo by Dom J

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Get Gatsby: Social Investment Platform eToro Acquires Option Trading App for $50 Million

Get Gatsby: Social Investment Platform eToro Acquires Option Trading App for $50 Million
By David Penn Posted on
Categories: Alumni News, Daily news, eToro, Mergers & Acquisitions
  • Social investment platform eToro inked a definitive agreement to acquire stock and options trading app Gatsby for $50 million.
  • U.S.-based Gatsby offers a commission-free, stock and options trading solution geared toward Millennial and Gen Z investors and traders.
  • Making its first Finovate appearance in 2011, eToro has won Best of Show in every one of its six appearances on the Finovate stage.

Social investment platform eToro has agreed to acquire Gatsby, a U.S.-based, commission-free, stock and options trading app. The Israel-based company, which has won Best of Show awards in every one of its six appearances on the Finovate stage since 2011, will pay approximately $50 million for the trading company.

As part of the transaction, Gatsby’s co-CEOs and co-founders Jeff Myers and Ryan Belanger-Saleh – along with other senior Gatsby staffers – will join the eToro team. The acquisition of Gatsby will enable eToro to diversify its offering to investors and traders in the U.S., a factor that eToro CEO Yoni Assia called “a strategic focus” for his company.

“Through Gatsby we can provide U.S. users with access to a safe and simple way to trade options,” Assia said, “which we know are particularly attractive in challenging markets.”

Geared toward younger investors and traders, Gatsby was founded in 2018 as a way to bring commission-free options and stock trading to a demographic that has been overlooked until recently. Company co-founder Belanger-Saleh credited eToro as an inspiration for launching Gatsby, calling eToro a social investing pioneer and “the cool older sibling we’d love to hang with.” Joining the eToro team will be Gatsby’s president and chief operating officer (both co-founders), as well as Gatsby’s Chief Technology Officer, Head of Product, and others.

“We are incredibly excited to welcome the Gatsby team to the eToro family,” Assia said. “We have a shared mission of empowering investors through simple, transparent tools.”

The acquisition announcement from eToro comes less than a month after the company launched its private equity portfolio that enables individual retail investors to access private markets that would be otherwise inaccessible to them. eToro’s Private Equity Smart Portfolio gives users exposure to 14 publicly listed asset management and investment companies that manage alternative assets. These firms, including Apollo Global Management, Blackstone, and The Carlyle Group, all feature strong ROIs and get their revenues via a combination of management fees for asset allocation and performance fees based on realized profits.

“Our goal is to open the global markets so that everyone can trade and invest in a simple and transparent way,” eToro Head of Investment Portfolios Dani Brinker said. “With this portfolio we want to leverage the wave of private equity company listings and offer our users a new solution to diversify their portfolio and gain exposure to the revenues generated in private markets.”

Founded in 2007, eToro currently has more than 28 million registered users who share their investment strategies and make it easy for market newcomers to buy, hold, and sell assets ranging from stocks to cryptocurrencies.

Photo by Haley Black

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Card Transaction Data Provider Facteus Earns Plaudits for Pulse

Card Transaction Data Provider Facteus Earns Plaudits for Pulse
By David Penn Posted on
Categories: Alumni News, Alumni profile, Facteus

A year ago, an Oregon-based fintech called Facteus made its debut at FinovateFall 2021.

“Finovate was started with the idea of showcasing new and exciting innovation in financial services,” Facteus VP Steve Shaw said as he began his company’s demo. “And we’ve seen a lot of great ideas in technology over the past couple of days.”

“But what’s that one thing that ties all of this innovation together and really makes it work?” he asked. “It’s the data behind all this innovation. If you don’t have access to the right data, a lot of this innovation is just for show.”

Founded in 2010, Facteus leverages a massive debit and credit card transaction data set to offer hedge funds, researchers, marketing professionals and others unique insights into the consumer economy. With more than eight years of historical data and 42 billion transactions processed – representing $1.3 trillion in consumer spending – Facteus provides insights into consumer segments, such as youth and the underbanked, whose financial behavior is often overlooked or underappreciated by other data sets.

At FinovateFall 2021, Facteus demoed its MIMIC synthetic data engine, which leverages machine learning to create an artificial copy of sensitive data, removing personally identifiable information (PII). The synthetic copy can be used for analytics, machine learning and AI, segmentation activities, and other data operations, but cannot be reverse engineered back to the original transaction or organization.

“Data is really the fuel for all the innovation we are seeing,” Shaw said. “We truly believe that and we have examples to show that synthetic data is really the key to unlocking the value of your sensitive data.”

Facteus began this year teaming up with 1010data to provide enhanced transaction data insights and analytics to companies in the investment, retail, and consumer brands businesses. As part of the strategic agreement, Facteus acquired 101data’s Equity Intelligence business, enhancing its ability to provide transaction data insights and analysis to the investment services industry. In return, 1010data gained access to Facteus’ U.S. Consumer Payments data panels to help its retail and consumer brand clients.

“Facteus data provides deep insights into the drivers behind consumer spending behavior and business trends not available in other transactional data panels,” Facetus CEO Chris Marsh said. “(Facteus offers) enhanced company analysis and investment strategies for 1010data clients and the investment services industry as a whole.”

By spring, Facteus was in the fintech headlines again, this time announcing an investment of $10 million from Curql Fund, the investment arm for more than 75 credit unions in the U.S. The company said it would use the funding to support the growth of its analytics and insights platform Quantamatics, as well as fuel continued innovation on its platform and expand into new industry verticals. The company’s investment from Curql Fund also gives Facteus access to the significant data assets of Curql Collective owners, representing tens of millions of new consumer debit and credit cards.

In May, the Beaverton-based company launched Pulse, a new consumer transaction data solution it called the most comprehensive in the alternative data industry. With Pulse, Facteus is able to capture up to 5% of all U.S. consumer spending, more than 500 tickers and 1,000+ private companies, and deliver accurate company KPI forecasts with the industry’s lowest forecast errors. A month later, Facteus’ Pulse earned its first official vote of confidence: topping the latest rankings in predictive accuracy in the KPIs of more than 65 public consumer companies.

“This accomplishment is a testament to our commitment to directly acquiring transaction datasets to build the most holistic and stable view of consumer spending across income cohorts and demographics,” Facteus Head of Product and Strategy Lorn Davis said.

Photo by Amina Filkins

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Zogo Finance and MoneyLion Forge Partnership to Foster Financial Literacy

Zogo Finance and MoneyLion Forge Partnership to Foster Financial Literacy
By David Penn Posted on
Categories: Alumni News, Zogo Finance
  • MoneyLion and Zogo Finance announced a new collaboration to bring financial literacy tools to MoneyLion’s more than three million users.
  • MoneyLion will integrate Zogo’s financial education modules into the Today Feed content section of the MoneyLion app.
  • Zogo Finance won Best of Show in its Finovate debut at FinovateFall 2019 in New York.

Personalized financial content provider MoneyLion is the latest fintech to partner with financial literacy company Zogo Finance. MoneyLion will leverage the new relationship with Zogo Finance to bring enhanced financial education to its more than three million users. The collaboration represents Zogo’s largest fintech platform integration since the company was launched four years ago.

“Partnering with a premier (neobank) such as MoneyLion is a pivotal step toward Zogo’s goal to bolster investor education for consumers’ prosperous financial futures,” Zogo CEO Bolun Li said. “This is one of our biggest leaps in the fintech space, driving us closer to our overall mission of reinventing financial education than ever before.”

Courtesy of the collaboration, MoneyLion users will be able to access Zogo Finance’s financial education modules within the “Today Feed” content section of the MoneyLion app. A feature that combines community insights and experience with data and financial expertise, MoneyLion’s Today Feed educates and empowers users to find the most appropriate financial solutions to suit their needs and make better, more informed decisions about their financial lives. The integration with Zogo will enable users to improve their understanding of key financial concepts ranging from investing and saving to applying for loans and pursuing entrepreneurship.

Emphasizing the importance of financial education that is “approachable and fun,” MoneyLion Chief Product Officer Tim Hong praised the new partnership with Zogo. “Each customer will receive a unique lineup of content and information, and the tools necessary to help them achieve their money goals,” Hong said. “At the same time (they will) have the confidence to improve their financial health with a hyper-personalized in-app feed.”

Headquartered in Austin, Texas, Zogo Finance won Best of Show at FinovateFall 2019 in New York. At the conference, the company demonstrated its teen financial literacy app that uses behavioral economic insights derived from research conducted at Duke University to help teach otherwise complex financial concepts.

Zogo began 2022 with an announcement that it had forged new partnerships with eight fintechs and financial institutions. The company followed this January accomplishment with an even more impressive signing of 12 new partners in February. By June, Zogo reported that it had reached a major partnership milestone in inking deals with a total of 200 financial institutions.

“It’s been a true honor to support the building of local communities founded on the bedrock of education,” Li said when the milestone was announced. “Every new user we educate and every new partnership we build brings us one step closer to a better world.”

Photo by Magda Ehlers

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