This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
A new partnership between credit underwriting software provider Zest AI and Wyoming’s largest credit union, Blue Federal Credit Union, will enable the institution to provide faster and more accurate loan decisioning across its auto, credit card, and personal loan portfolios.
Blue Federal Credit Union Chief Credit and Risk Officer Jason Buchanan called the partnership with Zest AI “a big win for our members.” He added that “Zest will also allow Blue to reach underserved borrowers across the credit spectrum while maintaining our standards of compliance and credit risk management. The granularity we have access to through Zest is broad and provides all of the features and details we need to explain our credit decisions.”
Zest AI leverages more data and better math to enable banks and credit unions to move beyond the limitations of their legacy credit scoring methods. The company claims that its models use 10x more variables to provide a more accurate picture of borrower risk and empower its financial institution partners to approve more borrowers safely. Blue FCU expects to deploy Zest AI’s technology early next year, and anticipates a 30% boost in loan approval rates as well as the ability to make loan decisions in less than five seconds.
“A Zest-built model gives them transparency, control, and a faster and more accurate decision that approves more members,” Zest AI CEO Mike de Vere said. “Blue’s investment in Zest is really an investment in its community.”
Headquartered in Los Angeles, California, and founded in 2009, Zest AI is a registered Credit Union Service Organization (CUSO) whose credit union customers represent $56 billion in assets and four million members. Named one of Fast Company’s “Next Big Things in Tech” last month, Zest AI won the 2021 Finovate Award for “Best Use of AI/ML” in September. This year, the company forged a partnership with student payment platform Climb Credit, and collaborated with Florida’s largest credit union Suncoast Credit Union. Over the summer, Zest AI secured $18 million in funding in a round led by strategic investors VyStar Credit Union and First National Bank of Omaha. The investment took the company’s total capital raised to $250 million.
With more than 100,000 members in communities across Wyoming and Colorado and beyond, Blue FCU was launched as Warren Federal Credit Union in 1951. The institution merged with Community Federal Credit Union in 2016, and rebranded as Blue FCU. The credit union moved its headquarters to Cheyenne earlier this year, and currently has more than $1.4 billion in assets. Stephanie Teubner is CEO and President.
An investment of $35 million will enable Solutions by Text (SBT), a compliant text messaging platform for consumer finance companies, to power broader adoption of its solution across the consumer finance lifecycle. The growth financing round was led by Edison Partners, and featured the participation of Stifel Venture Bank, a division of Stifel Bank.
In addition to the funding news, Solutions by Text also announced the appointment of former ACI Worldwide executive David Baxter as its new Chief Executive Officer
“Now more than ever, consumer finance organizations are taking a hard look at how to strengthen digital consumer relationships while maintaining compliance with national standards,” Baxter said. “Our opportunity to capture market share through existing and expanded platform capabilities is immense and we’ve assembled an exceptional team and board to turbo-charge this next chapter of growth.”
As part of the investment, co-founder Mike Cantrell and Edison Director Network members Ron Hynes and Nick Manolis will join the Solutions by Text board of directors.
Headquartered in Dallas, Texas, and maintaining remote teams and offices throughout the U.S. as well as in Bangalore, India, Solutions by Text was founded in 2008. The company’s technology is used by more than 1,400 consumer finance companies – ranging from auto finance and lending to banking – who use SBT’s compliant texting solutions to support origination, servicing, and collection operations. Solutions by Text helps ensure that communication policies and practices are compliant with key regulations such as the Consumer Finance Protection Bureau’s Fair Debt Collection Practices Act (FDCPA), including a new Regulation F which went into effect today. The revision clarifies the ability of consumers to stop collection calls and/or text messages and is intended to respond to the rise of new communications methods.
Solutions by Text offers two-way texting to ensure seamless communication with customers, as well as a pay-by-text product, Text Pay, and a customizable URL shortening tool called SmartURL. SBT’s technology can be integrated via the company’s API, which enables access to the full range of the company’s text messaging tools including budgeting, reporting, file imports, message templates, and distribution lists.
“(SBT) is uniquely positioned to scale growth in the fintech market with a team of deep regulatory compliance, messaging, and payments expertise, not to mention a sizable loyal customer and partner base with significant embedded opportunity,” Edison Partners General Partner Kelly Ford said. “Eight in ten U.S. adults use text messaging on a regular basis,” Ford noted. “With Solutions by Text, financial institutions are meeting these consumers where and how they want to be met, and doing so with peace of mind.”
In a round led by Nyca Partners, cloud native core banking technology platform Thought Machine has secured $200 million in new funding. The Series C investment gives the London-based fintech a valuation of more than $1 billion, giving the company so-called “unicorn status.”
Thought Machine will use the new capital to continue development and evolution of its flagship solution, Vault, and its Universal Product Engine. Vault leverages APIs and a microservice architecture to provide institutions with all of the functionality necessary to offer both retail and small business banking services. A system of smart contracts enables companies to configure Vault to support a variety of retail bank products including current and savings accounts, loans, credit cards, and mortgages. And as a cloud-based solution, Vault offers institutions security, flexibility, scalability, high availability, and an absence of friction.
Vault also enables institutions to better manage run and change costs so that banks only pay for the hardware they actually use and benefit from the ability to launch new products quickly and deploy upgrades to existing solutions with zero downtime.
“We set out to eradicate legacy technology from the industry and ensure that banks deployed on Vault can succeed and deliver on their ambitions,” Thought Machine founder and CEO Paul Taylor said. “These new funds will accelerate the delivery of Vault into banks around the world who wish to implement their future vision of financial services.”
Also participating in the Series C were new investors ING Ventures, JPMorgan Chase Strategic Investments, and Standard Chartered Ventures. Existing investors Lloyds Banking Group, British Patient Capital, Eurazeo, SEB, Molten Ventures, Backed, and IQ Capital also contributed. Thought Machine has raised more than $348 million in equity funding to date.
Thought Machine demonstrated its core banking solution, Vault, in its Finovate debut at FinovateEurope in 2018. More recently, in September of this year, the company announced that JP Morgan Chase would replace its core banking suite with Thought Machine’s Vault. Also joining Chase in transitioning to Vault this fall was Arvest Bank, which operates a cohort of small, U.S.-based community banks. In April, Thought Machine announced an integration with fellow Finovate alum Wise (formerly Transferwise) to enable companies using Vault to access low-cost international fund transfers.
Founded in 2014, Thought Machine was named “B2B Fintech of the Year” by AltFiNews earlier this month.
Regardless of where you stand on the Revolut/Yoppie partnership “intention versus execution” debate, it is nevertheless remarkable how fintechs and financial institutions are reaching out beyond their traditional collaboration competencies to reach new markets and promote an ever-widening array of causes.
This week’s Finovate List Series looks at three ways that banks and fintechs are helping pave the way in terms of greater financial inclusion for underrepresented groups and deeper understanding of how everyday behaviors can have a significant impact on the environment.
Gender
The first digital banking platform in the U.S. dedicated to serving the LGBT+ community, Daylight, launched earlier this month. The platform is built to help LGBT+ financial services consumers to manage their finances and save for future expenses ranging from emergency funds to gender transition surgery and related medical expenses. The company notes that with an estimated 30 million people in the United States who identify as LGBT+, the community remains significantly underserved in financial services.
“This country is at a critical turning point where we have recognized companies and services have been performatively suporting the LGBT+ community versus serving its unique needs,” Daylight co-founder and CEO Rob Curtis told Retail Banker International earlier this month. “Despite our community’s combined $1 trillion in buying power, we are still ignored – roughly 20% of LGBT+ people are unbanked or underbanked.”
Daylight will offer Visa-branded cards in the customer’s preferred name, rather than the customer’s legal name, as well as financial tools to help prioritize spending decisions and meet financial goals. The platform will also provide expert financial advice and access to a network of financial management “coaches” that specialize in responding to the unique financial needs of those in the LGBT+ community. A member of Visa’s Fintech Fast Track program – and the program’s first LGBT+-based fintech – Daylight is also supported by card issuing platform and Finovate alum Marqeta.
Daylight has announced that it will begin operations in the middle of next month, starting with an invite-only, beta period involving “a few hundred people.” The company will focus first on markets in California and New York.
Ethnicity
In the wake of the George Floyd-inspired, Black Lives Matter protests of 2020, a spotlight has been shown on the rising number of financial institutions catering to African Americans.
Among the newer entries to this cohort is Adelphi Bank, which announced earlier this month that it has filed paperwork with the FDIC to become the first black-owned, depository institution in Ohio.
“We know that African Americans typically don’t have access to financial institutions to the degree that the majority community has,” former Fifth Third Central Ohio president and CEO Jordan Miller said to The Columbus Dispatch. “We know that our financial situations are not as strong in most cases. And so we want to make a difference in the community across Franklin County, to give those underserved a voice and financial services,” Miller, one of Adelphi Bank’s proposed incorporators, added.
The bank would be located in the King-Lincoln/Bronzeville neighborhood, and its backers stated that they plan to raise $20 million in equity capital upon earning FDIC approval to open. The institution takes its name from the city’s first black-owned bank, Adelphi Loan & Savings Company, which was launched in the early 1920s. The new bank will be part of a $25 million development called Adelphi Quarter, which will feature both housing and ground-floor businesses. The Columbus Dispatch reported that the original facade of Adelphi Loan & Savings has been incorporated into the new structure.
Sustainability
This week we reported on the partnership between Tink and ecolytiq to give banks, financial institutions, and fintechs the ability to offer environmental impact data to their customers. These kind of solutions, which include options like carbon footprint calculators, have been among the chief ways that many innovative companies have sought to bring their sustainability technology to the world of financial services.
Today we learn that micro-investing platform Wombat has added a new option to its impact investment offerings: a sustainable food ETF (exchange-traded fund) that enables investors to get exposure to dozens of companies that are involved in developing sustainable food production systems and products. These companies include new, but well-known brands such as plant-based food company Beyond Meat, oatmilk company Oatly, and farm-to-table business Tattooed Chef.
The fund, called The Future of Food, is the fifth impact investment offering on Wombat’s platform. The ETF was created via a partnership between thematic ETF issuer Rize and thematic research company Tematica Research. It will trade on the London Stock Exchange under the ticker “FOOD LN.”
“At Wombat we have found that some of our most popular thematic funds are those that offer impact investment opportunities, such as our Medical Cannabis and Green Machine ETFs,” Wombat co-founder and CEO Kane Harrison said. “We think this new sustainable food fund is a great addition to that range and it means we now offer a very competitive choice of impact investments when compared with other micro-investing platforms.”
Founded in 2019, Wombat currently has more than 190,000 users.
A new partnership between North Dakota-based Cornerstone Bank and Buy Now Pay Later company Credova is the latest example of how bank-BNPL partnerships are becoming increasingly common in financial services. Per the agreement, Cornerstone Bank will do business as Noka and will provide loan origination for Credova, which specializes in BNPL solutions for the outdoor recreation, farm, home, and ranch markets.
“This is the next step in our company evolution, to partner with Cornerstone Bank, a pillar in the banking community,” Credova CEO Dusty Wunderlich said. “It’s not often you find a bank with a nearly 100-year history be so nimble and forward thinking, but that’s exactly what we’ve discovered in Cornerstone Bank.”
One of the ten largest financial institutions in North Dakota, Cornerstone Holding Company, the parent company of Cornerstone Bank, is a $1 billion financial institution with 11 locations in North and South Dakota. Headquartered in Fargo, Cornerstone offers its customers access to business and personal loans, deposits and cash management services, and both online and mobile banking.
“This exclusive agreement furthers our vision of being who people turn to when they are making important decisions about their money,” Cornerstone Bank chairman Gary Petersen said. “Cornerstone Bank and Credova share very similar cultures and approaches to doing business, making this relationship a great pairing. Both organizations will benefit from each other’s areas of expertise.”
Founded in 2018, Credova recently relocated its headquarters from Nevada to Bozeman, Montana. The move, according to Wunderlich, reflected a desire to base operations in “a location that echoed our values and allowed us to continue to lead an outdoor lifestyle.” The POS financing platform offers a virtual card and extended installment financing along with its “Pay in 4” BNPL program that will allow consumers to divide their purchases into four, zero-interest payments. Available as either an on-site or an in-store integration, Credova’s financing platform has enabled merchants to realize a more than 3x increase in AOV (average order value) compared to other payment methods, a more than 51% increase in overall sales volume, and a more than 72% increase in conversion rates. Credova includes 3H Tactical, Big Tex Outdoors, Broadheads and Bullets, and Cedar Pet Supply among its most recent brand partners.
Sustainability-as-a-Service company ecolytiq has announced a partnership with Visa-owned, European open banking platform Tink that will bring personalized impact footprint calculations and other pro-sustainability solutions to banks, financial institutions, and fintechs. The technology, which helps encourage customers to shift their behavior toward more sustainable choices in terms of spending, will be available initially in the DACH region (Germany, Austria, and Switzerland) and eventually expanded to other, larger markets in Europe.
“ecolytiq’s solution was created with the ability to quickly scale, because we know that global warming needs exponential climate action enablers,” ecolytiq CEO and co-founder Ulrich Pietsch said. “Tink is a strategic partner with a proven track record for enabling banks and fintechs to deliver the data-driven digital solutions their customers want and need. ecolytiq is the next-generation of these products.”
Ecolytiq’s products include ecoAware, which uses country-specific calculations to determine a customer’s personal environmental impact based on their bank transactions; ecoEngage, which helps bank customers determine ways to reduce their environmental impact via feedback loops, footprint analytics, and peer group comparisons; and ecoAction, which enables bank customers to offset their environmental impact via donations to ecolytiq’s certified offsetting partners. ecoAction allows individuals to compensate 100% or more of their carbon footprint, and ecolytiq plans to soon add ESG investment funds as a donation destination as well as the ability to select a green energy provider with its ecoSwitch solution.
An alum of Finovate’s developers conference, ecolytiq demonstrated its technology at FinDEVr 2021 earlier this year. Founded in 2020 and headquartered in Berlin, Germany, ecolytiq has already forged partnerships with Visa, FinTecSystems, challenger bank Tomorrow, and Worldline. Over the summer, the company won recognition in the Impact Shakers Awards in the “Education” category.
Two-time Best of Show winner Tink, based in Stockholm, Sweden, most recently demonstrated its technology on the Finovate stage at our European conference in 2019. The company’s open banking platform handles more than one billion API calls a month; supports more than 3,400 bank and financial institution integration partners; and reaches more than 250 million bank customers across Europe. Tink’s products help institutions confirm account ownership and verify income; provide up-to-date, standardized and categorized transaction data; offer a fully embedded payments experience to boost engagement and conversion, and enable firms to build smart, intuitive personal finance management solutions. In addition to its partnership with ecolytiq, Tink has also recently embarked upon collaborations with French payments service provider Lemonway and German PFM app Placons.
“The combination of Tink’s transactions product and ecolytiq’s sustainability expertise creates a valuable proposition for financial institutions and fintechs across the DACH region to offer services that better measure and help reduce carbon footprint,” Tink Regional Director for the DACH region Cyrosch Kalateh said. “We look forward to extending this partnership in the future, helping ecolytiq to expand at speed across Europe on our open banking platform.”
“Open banking empowers consumers and small businesses to use their financial data to expand access to financial services, such as demonstrating their financial wellness to increase access to credit, aggregating financial data to improve personal financial management, and to more seamlessly set up and manage payments,” Mastercard Chief Product Officer Craig Vosburg explained. “Together, we’ll continue to build up on our API connectivity and our multi-rail strategy to enable greater consumer access, control, and choice around the world.”
Aiia is the company known formerly as Nordic API Gateway, the leading open banking platform in Northern Europe. More than 40 financial institutions, as well as a number of enterprises, rely on the platform to integrate financial data and offer A2A (account-to-account) payments. Via a simple API, the solution supports a wide variety of payment services ranging from one-off, e-commerce payments to bulk payments for SMEs. The company demonstrated the technology at its Finovate debut at FinovateEurope earlier this year.
Founded in 2017, Aiia includes Danske Bank, OP Bank, Lunar, DNB, and Santander Consumer Bank among its partners. A licensed Payment Initiation Service Provider (PISP) and Account Information Service Provider (AISP), Aiia has raised more than $15 million (€13.5 million) in funding to date. This includes a $5 million investment from DNB and Danske Bank in April of last year.
“For the past decade, we have worked to build Aiia into a leading and quality-driven open banking platform, which has onboarded hundreds of banks and fintechs onto safe and secure open banking rails,” Aiia founder and CEO Rune Mai said when the acquisition news first broke in September. “We have worked closely alongside banks, customers, and local authorities to ensure that our APIs show the true effect of open banking. We’re excited to become a part of Mastercard and progress our journey of empowering people to bring their financial data and accounts into play – safely and transparently.”
Aiia is the latest fintech acquisition by Mastercard. The purchase comes a year after the completion of its acquisition of real-time financial data and insights company Finicity.
Supporting more than 30,000 advisors, representing more than three million end-investors, and servicing more than $1 trillion in assets across its platforms, intelliflo has delivered SaaS-based solutions for the financial advisory industry since its founding in 2004.
Headquartered in the U.K. and recognized as one of the leading technology platforms for financial advisors in the country, intelliflo announced earlier this year that it had successfully integrated five advisory solution businesses – Jemstep, Portfolio Pathway, RedBlack, i4C, and intelliflo U.K. – under the Intelliflo brand. The move to consolidate its advisory services was designed to enable the company to better compete with rivals like Finovate alum Envestment.
We chatted with Jennifer Valdez, intelliflo’s President of the Americas, to discuss the company’s rebrand and how the wave of digital transformation has impacted the financial advisory space. We also talked about the role of women in financial services and the importance of changing mindsets as a key step on the path toward positive change.
What was the driving force behind intelliflo’s recent rebrand?
Jennifer Valdez: Earlier this year, Invesco brought together its five separate software businesses to form the new intelliflo, a single, API-driven platform to run the end-to-end advisory experience. intelliflo’s technology is comprehensive, representing a broad spectrum of capabilities including financial planning, practice management, digital account opening, reporting, as well as trading and rebalancing capabilities. The open architecture drives new levels of flexibility, efficiencies, and personalization across financial advice, empowering organizations of all sizes with digital tools to better serve modern investors and widen access to financial advice. intelliflo supports over 30,000 financial advisors worldwide, representing more than three million end-investors and over $1 trillion in assets serviced on the platform.
What tips do you have for clients beginning to embark on digital transformation projects?
Valdez: Before starting any major digital or business transformation project, it’s critical to pause and really think through the pain points you’re trying to solve. This includes listening to your internal team members, advisors, and clients. Technology simply for technology’s sake won’t be effective or productive; you must be solving a true business problem that will move the needle and better position your organization for meaningful change and success. Once that direction is clearly defined, then it’s time to engage your technology partner(s) to ensure you are fully maximizing technology to support your future vision.
Why is it so important for women to have a seat at the table? What steps can individual organizations and the industry as a whole take to ensure greater representation?
Valdez: Representation matters, and in order for organizations to accurately and comprehensively represent all audiences, these groups must have a voice (and vote) when making decisions. This doesn’t mean just women, but all traditionally underrepresented groups such as people of color and those in LGBTQ+ community.
As a collective industry, we can all choose to do more to raise awareness against bias and stand up for equality, giving everyone an opportunity to thrive. Challenging current mindsets is the pathway to driving positive change.
How have the last 18 months changed the industry?
Valdez: The past year and a half have significantly impacted the financial advice space. Financial advisors are not regularly sitting across the desk from their clients, which challenges them to determine how to continue to meet investors’ needs and help improve their overall financial health. At the same time, investors are increasingly wanting tailored advice, so financial advice professionals are being challenged to deliver a high level of service in a new digital way.
While this has been difficult, it’s also created an opportunity for the industry to embrace modern technology in new ways, digitizing workflows and back-office capabilities to help increase efficiencies and reduce costs. Streamlining the advisory experience in this way is not only beneficial for the financial advice professionals, but also the end investors – it enables quicker, more transparent communication and collaboration all around, while also driving greater personalization.
Can you share a recent professional accomplishment and/or a goal you hope to accomplish?
Valdez: Being asked to lead the Americas for intelliflo has been a significant personal milestone. I’ve always recognized the importance of financial advice and have been passionate about helping investors strengthen their financial wellness. In my role, I get to lead an amazing team that executes on our company’s mission to widen access to financial advice.
At intelliflo, we firmly believe that financial advice should be accessible to all, not just the wealthy. That’s why we’re dedicated to providing the digital technology necessary to make this a reality, helping advisors improve the financial lives of their investors. I’m excited for what’s to come.
How do you see the advisory experience evolving this year and next? What role does technology play?
Valdez: Looking toward the end of this year and into next, I expect more financial services firms to embrace a hybrid advice model, a strategic, flexible mix of digital and human advice. Such an approach enables advisory firms to meet investors whenever and wherever they want to be met, while also allowing these firms to deliver products and services more efficiently and effectively.
Another significant benefit of a hybrid advice model is the ability to close notable product gaps. Many firms have clearly defined offerings for those who want full advice and for those who are primarily self-directed, but more choice should be made available to those investors that fall somewhere in between. With a hybrid strategy, financial services firms can cost effectively provide products and services that meet the needs of every investor on the continuum – and in their engagement models and delivery channels of choice.
Technology is key to making the shift to a hybrid model successful. More firms will forgo bespoke software solutions in favor of a single platform that can support the end-to-end advisory experience, allowing them to boost efficiencies. Leveraging open architecture and sophisticated APIs will be critical in helping to optimize margins, reduce costs, and enable greater personalization across the advisory experience.
EarlyBird, a mobile investing app for children and their families, has raised $4 million in seed funding today. Alexis Ohanian’s Seven Seven Six led the round, which featured strategic participation from Gemini’s Frontier Fund, Network Ventures, Rarebreed Ventures, and other angel and VC investors. The company will use the capital to continue building its solution, add to its engineering, product, marketing, and operations teams, and introduce new features – including the ability for users to invest and gift assets other than stocks and ETFs, such as cryptocurrencies.
The investment takes the company’s total funding to more than $7 million, having secured funding previously in November and January of last year.
Using a collaborative approach to next-generation wealth building, EarlyBird enables parents to set up an investment account, select from a number of diversified portfolio options, and begin making investments on behalf of their child. The platform also empowers members of a child’s extended network of family, friends, and others to contribute to the account (“gifted capital” EarlyBird calls it). Whether celebrating birthdays, holidays, or other occasions, these contributions are not only unique gift options, they also help young people begin to learn about the importance of investing and building wealth over time. The technology also has a feature that enables contributors to add a video or photo commemorating the gift.
“EarlyBird started with the vision to create an accessible way for all families to begin building wealth for their children, and to do so with the support, love, and contributions of their broader communities,” EarlyBird co-founder and CEO Jordan Wexler said. “Since our launch, we’ve seen incredible growth, adoption, and excitement from families with a wide range of financial knowledge and backgrounds. Seven Seven Six and all of our new partners recognize the importance of financial access and approachability in investing, and we’re thrilled to have them on board as we continue to take flight.”
Headquartered in Chicago, Illinois, and founded in 2019, EarlyBird recently announced a partnership with Benjamin Talks, a youth-oriented financial education platform launched by co-founders Nikki Boulukos and Carissa Jordan last fall. The collaboration will bring Benjamin Talks content to EarlyBird’s newsletter series “The Weekend Worm” which offers stock market news in an approachable way that parents can share with their children. This spring, EarlyBird introduced its Gifts for Good program. Starting this April, EarlyBird selected up to three “extraordinary kids between the ages of 3 and 12 years old to support and invest in.” With an eye toward young people showing achievement in areas such as music and the arts, athletics, academics, and “special acts of kindness,” EarlyBird will provide a gift investment of $250 to each child selected to seed their investment accounts.
“Investing tools are only available to families with investing knowledge and experience building generational wealth,” EarlyBird COO Caleb Frankel said in a statement accompanying today’s investment news. “We have a bold vision to make investing available for everybody. We are driving wealth creation not within the system of today, but for the world of tomorrow.”
Ozow, a payment gateway based in South Africa, has secured $48 million in Series B investment in a round led by Chinese fintech Tencent. The funding boosts the company’s total capital raised to more than $51 million. The company said the funding will be used to promote fintech regulation – particularly open banking – to help more people gain access to payment services. The new capital will also enable the seven-year old fintech to enter new markets throughout sub-Saharan Africa and add employees. Namibia, Ghana, Kenya, and Nigeria are among the countries Ozow is currently targeting for expansion.
Co-founded by current CEO Thomas Pays, Ozow enables consumers to pay for transactions directly from their bank accounts. This kind of service has special potential in a country like South Africa where only 20% of those who have bank accounts have and use credit cards. Ozow has six million users of its technology and Pays claims that the company is adding 140,000 users and processing $100 million in transactions every month.
Also participating in Ozow’s latest round were Endeavor Catalyst and Endeavor Harvest Fund.
Using Ozow is straightforward. Consumers choose Ozow as a payment option when making purchases either online or in-person. Then they select their bank, log in with their online banking credentials, and allow Ozow to automate the actual payment process. Free to use for individual consumers, merchants are able to use Ozow’s platform for free for the first 12 months – or a maximum of $65,000 in processing value each month. In order to receive payments, merchants only need a bank account and a smartphone or similar device. Ozow includes Vodacom, MTN, Takealot, and Uber among its enterprise clients.
Pays said that his team had been “engaging with Tencent” since the spring, and that the company understood “the scale and opportunity” available in investing in a company like Ozow.
“It’s an honor to bring on board Tencent, Endeavor Catalyst, and Endeavor Harvest Fund,” Pays said in a statement. “This is a validation of our role in transforming the banking industry through the development of innovative, convenient, and more inclusive payment solutions for everyone.”
Here is our look at fintech innovation around the world.
The Finovate Team was saddened to hear of the passing of Brandon Dewitt, co-founder and Chief Technology Officer of MX. He was 38.
In a letter to company employees, MX CEO Ryan Caldwell, who co-founded the firm with Dewitt in 2010, wrote of his colleague’s “brilliance, boundless positivity, wonderful wit, and ability to be joyous and grateful, regardless of what challenges he faced.”
Diagnosed with Stage IV cancer in 2016, Dewitt was a staple of MX’s participation at Finovate events, including leading the company’s most recent Best of Show winning demo at FinovateFall in 2019. But it may have been his presentation at Finovate’s developers’ conference, FinDEVr Silicon Valley 2016, that left the most indelible impression on so many of us. After a discussion of the company’s latest innovation, Dewitt retold the story of his battle with cancer, the way his teammates at MX rallied in support, and why he wanted to discuss this topic with our Finovate/FinDEVr audience.
What I want to say to every developer that’s here today, every entrepreneur that’s here to today, every builder that’s here today is about the seemingly impossible, certainly improbable, but necessary. I want you to know that we wake up every single day and say ‘but necessary.’ We know as an organization what our task is: to be ‘but necessary’. And I want to challenge every developer out there in saying, ‘are you working on something that is necessary?’
You may be thinking, ‘man he went from talking software to talking cancer and scared it me’ …” Dewitt conceded. “But if you look at the leading causes of death of humans, in the top ten is suicide … And if you look at the leading causes of suicide, one of the leading causes of suicide is financial stress. The World Health Organization considers financial stress one of the most significant problems facing mankind.
So what we’re doing here today and what you wake up and do on a daily basis, can be part of the solution to a very, very solvable problem. And so I want to challenge you not only as organizations, not only as builders, but as humans. Are you waking up every single day and doing something that is necessary? And if you’re not, there’s tons of organizations that are out in that hallway that have a booth set up that are doing something that is necessary, that is finding a way to change the world that is necessary for the future of humanity, and I would encourage you to check them out.
Our thoughts and deepest condolences are with Brandon Dewitt’s fiancé, Kara, as well as his family, friends, and his teammates at MX.
In an extension of its $200 million Series E financing round, digital payments company Airwallex has secured an additional $100 million in funding. The extension came from Lone Pine Capital and featured the participation of existing investors such as 1835i Ventures and Sequoia Capital China. Now standing at $300 million, Airwallex’s latest funding gives the company a valuation of $5.5 billion. The company has raised a total of $802 million.
“As we approach our sixth anniversary, we want to continue to connect entrepreneurs, business builders, and makers with opportunities in every corner of the world,” co-founder and CEO of Airwallex Jack Zhang said. “This new capital injection will allow us to do just that, fueling M&A opportunities that will accelerate our global expansion plans, pursuing our mission to empower businesses to grow without borders.”
Headquartered in Australia, Airwallex offers a financial infrastructure and platform that enables businesses to manage payments online. The company’s business accounts allow businesses to transfers funds worldwide to more than 130 countries in 31 currencies, at a cost of 0.4% to 1.0% above the interbank FX rate. Airwallex’s business accounts connect seamlessly with online stores such as eBay, Shopify, and PayPal, as well as with accounting packages like Xero, and enable firms to issue virtual “borderless” payment cards to their employees.
Airwallex’s funding comes as the company reports a 1.6x year-over-year revenue increase for Q3, along with annualized revenue of more than $100 million. Launching its virtual employee cards in Hong Kong and the U.K. this past quarter, Airwallex also secured licenses to operate in both Singapore and Malaysia.
“Receiving this approval reflects our robust policies, compliance framework and risk management systems we have put in place,” Zhang said when Airwallex received its Major Payment Institution License by the Monetary Authority of Singapore (MAS) earlier this month. “We will continue to work closely with regulators and partners to ensure we facilitate a safe, effective, and transparent way to manage their cross-border financial transaction needs.”
Founded in 2015, Airwallex has recently announced partnerships with Australian digital brokerage company Stake and travel lifestyle brand Cathay. In October, the company was named to the 2021 CB Insights Fintech 250 list for the fourth consecutive year.
