Author: David Penn

Fundica Teams Up with Digital Commerce Bank to Help Businesses Find Funding

Fundica Teams Up with Digital Commerce Bank to Help Businesses Find Funding
By David Penn Posted on
Categories: Alumni News, Daily news, Fundica

One month after making its Finovate debut at FinovateFall in New York, AI-powered funding search engine Fundica has partnered with Digital Commerce Bank. The Bank will host Fundica’s online funding search solution on its website for free, making it easier for businesses to search for and secure information on a wide variety of funding sources, including grants, tax credits, government loans, loan guarantees, and accelerators and incubators.

Users of the search engine can personalize results quickly and choose from among 35+ different search criteria. The solution is updated in real time, helping ensure that companies and business owners have access to the most up-to-date, accurate information on funding opportunities that are relevant to them.

“Digital Commerce Bank is proud to offer Fundica’s funding search technology as part of our commitment to support and promote business in Canada,” Digital Commerce Bank President and CEO Jeffrey Smith said. A privately held, Schedule 1 Canadian chartered bank headquartered in Calgary, Alberta, Digital Commerce Bank offers payment and banking experiences, as well as card services, digital wallets, and loan origination and management tools.

The institution is regulated by OSFI (the Office of the Superintendent of Financial Institutions of Canada), is a member of Payments Canada, and is a principle member of Interac, Visa, and Mastercard. Digital Commerce Bank changed its name from DirectCash Bank in November of last year in a move Smith said would allow the institution to “unify (its) branding, technology, and offering. The firm reported total assets of $94 million (C$117 million) this summer.

“We are delighted to partner with an innovative group like DCBank who shares our mutual commitment to make finding and applying for funding easier for entrepreneurs across Canada,” Fundica President and co-founder Mike Lee said.

Founded in 2017 and headquartered in Montreal, Quebec, Fundica leverages machine learning, crowdsourcing, web crawlers, and its own data science team to offer business owners and entrepreneurs dynamic, relevant funding data. In addition to Fundica’s funding search engine for businesses, the company’s white label and API-based solutions enhance the ability of its partners to help its customers better navigate the funding landscape. Companies have successfully leveraged Fundica’s technology to drive traffic to their websites and capture leads in search of funding, better engage customers with a “one-stop-shop” for current and relevant funding information, as well as generate data-driven insights.

In addition to its online white label service, Fundica also offers two other licensed services: AdvisorPro and Automated Funding Alerts. AdvisorPro is designed for financial advisors to use the Fundica database directly to better serve their clients. Automated Funding Alerts service sends funding opportunities to a mailing list of businesses provided by the subscribing firm. For its role in playing “matchmaker” between businesses and funding entities, Fundica has earned the nickname “the eHarmony of the funding world.”

“Fundica is the most useful tool entrepreneurs can use when it comes to funding,” former, eight-year Intuit Canada President and CEO Jeff Cates said. “Having their white-label solution on our website increased signups to Intuit’s products tremendously.”

An award-winning innovator that has earned recognition from the Claudine and Stephen Bronfman Family Foundation, Startup Canada, and CFO Canada, Fundica also organizes and runs the Fundica Roadshow. The annual event is held in cities across both Canada and the U.S., and is geared toward helping business owners understand the range of funding opportunities available to them, as well as help make connections between entrepreneurs seeking funding and the funding sources themselves.

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Mastercard, Fiserv Team Up with Bakkt to Bring Digital Assets to Loyalty Programs

Mastercard, Fiserv Team Up with Bakkt to Bring Digital Assets to Loyalty Programs
By David Penn Posted on
Categories: Daily news, Fiserv, MasterCard

A partnership between cryptocurrency exchange Bakkt and Mastercard is being heralded as a major breakthrough in bringing digital assets into the mainstream.

“Mastercard is committed to offering a wide range of payment solutions that deliver more choice, value, and impact every day,” Mastercard EVP of Digital Payments Sherri Haymond. “Together with Bakkt and grounded by our principled approach to innovation, we’ll not only empower our partners to offer a dynamic mix of digital assets options, but also deliver differentiated and relevant consumer experiences.”

The collaboration will enable Mastercard partners to leverage the company’s network and Bakkt’s trusted digital asset platform to enable consumers to buy, sell, and hold digital assets using custodial wallets powered by Bakkt’s platform. Additionally, consumers will benefit from streamlined issuance of branded crypto debit and credit cards.

Mastercard will also make cryptocurrencies a bigger part of its loyalty programs. Mastercard partners will be able to offer cryptocurrency as rewards and enable consumers to transfer value between loyalty points and digital assets. This will allow users to effectively use cryptocurrencies for everyday transactions and, perhaps even more significantly, marry cryptocurrencies to their preferred purchases.

“We’re incredibly excited to partner with Mastercard to bring crypto loyalty services to millions of consumers,” Bakkt EVP for Loyalty, Rewards, & Payments Nancy Gordon said. “As brands and merchants look to appeal to younger consumers and their transaction preferences, these new offerings represent a unique opportunity to satisfy increasing demand for crypto, payment, and rewards flexibility.”

In addition to its partnership with Mastercard, Bakkt also announced that it had entered a strategic relationship with Fiserv that will also help support mainstream adoption and use of cryptocurrencies. A major feature of the collaboration will be the integration of Bakkt into Fiserv’s Carat omnichannel ecosystem. This will enable businesses to offer both B2B and B2C cryptocurrency payouts, loyalty programs, and transactions. Fiserv and Bakkt also announced plans to introduce Bakkt technology that enables customers to store and transact with digital assets to Fiserv’s financial institution clients.

Founded in 2018 and based in Alpharetta, Georgia, Bakkt became a publicly traded company only a few days ago, launching on the New York Stock Exchange under the ticker symbol BKKT. The listing came courtesy of a SPAC sponsored by Chicago investment firm Victory Park Capital. In the weeks leading up to the company’s debut as a public company, Bakkt had announced partnerships with other Finovate alums including Finastra, Google, and, earlier this year, Blackhawk Network.

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Denim Social Secures $5 Million to Help Regulated Industries Boost Customer Engagement

Denim Social Secures $5 Million to Help Regulated Industries Boost Customer Engagement
By David Penn Posted on
Categories: Daily news, Funding, Gremln

One of the most interesting missions in fintech has been the effort to bring the benefits of 21st century communications – from instant messaging to social media – to regulated businesses. In a world in which consumers expect to be able to leverage the familiarity and convenience of WhatsApp and Facebook in their everyday activities, the challenge of incorporating these technologies into industries like finance has been daunting.

Denim Social is one of the many companies that has dedicated itself to solving this problem for consumers and regulated businesses alike. Headquartered in St. Louis, Missouri, the company offers a suite of built-in compliance and publishing tools to help financial, insurance, wealth management and other compliance-conscious enterprises run and scale conversion-optimized campaigns across all social media channels.

More than 250 institutions in banking, insurance, wealth management, and real estate have leveraged Denim Social’s technology. And today, the company announced that it has raised $5 million in Series B funding to help support product development and fuel expansion in its marketing and sales efforts. The investment, courtesy of FINTOP Capital and JAM FINTOP BankTech, gives the startup a valuation of $30 million.

“Financial institutions are rapidly accelerating their digital strategies in today’s environment and Denim Social can help them humanize their brand on social media, while staying compliant,” Denim Social CEO Douglas Wilber said. “With increasing demand for our solution, FINTOP’s and JAM FINTOP’s partnership will help us grow to meet the needs of future clients.”

Founded in 2020, Denim Social merged with Finovate alum Gremln Social later that year. Making its Finovate debut in 2013, Gremln was among those companies that, early on, recognized the value in enabling regulated companies to leverage social media to enhance customer engagement in a compliant way. “During times like today, it’s more important than ever for brands to use social media to build deeper, more meaningful relationships with consumers and their communities,” Denim Social noted in a blog post announcing the merger. “But we also recognize that compliance remains a significant barrier in many regulated industries. By merging our technology and expertise, we are providing an industry-leading, all-in-one solution.” The merger announcement was accompanied by a $4 million Series A investment led by Hermann Companies.

More recently, Denim Social launched the first-ever compliant Instagram publishing and advertising solution. In a statement, the company noted that Instagram bested other social networks in terms of both engagement and the ability to influence purchase decisions. The new platform enhancement helps marketers at regulated businesses manage and publish from multiple Instagram business accounts; schedule and publish organic content; maximize reach and lead generation with paid, targeted advertising; review and improve marketing strategies using performance analytics; and monitor all activity via a single streamlined feed. SVP of Goldwater Bank’s mortgage division, Christine Madrid Overbeck, called the new offering “a game changer.”

“A robust social media monitoring platform is a must in the mortgage and banking industry,” Overbeck said. “Denim Social has not only allowed us to remain compliant, their platform allows our sales team to successfully post, utilize a library of approved content, and monitor their engagement.”

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A Look at the Fintech Unicorns of Southeast Asia

A Look at the Fintech Unicorns of Southeast Asia
By David Penn Posted on
Categories: Finovate Global

This week’s Finovate Global List Series feature takes a look at the roster of Southeastern Asia-based technology unicorns compiled by Credit Suisse’s ASEAN research team in a recent report to see how many of these 35 billion-plus valuation companies are fintech firms.

“The number of unicorns in ASEAN has continued to increase over the last two to three years, now adding up to 35 unicorns,” the report authors noted. Scaling New Heights: ASEAN’s 35 Unicorns reveals that Singapore and Indonesia are home to the lion’s share of the region’s unicorns and that fintech represents the most common sector, followed by e-commerce.

In terms of factors fueling the growth of these firms, the report highlights the role of private equity/venture capital funding, strong demographics – particularly populations with a high number of citizens under the age of 34 – and supportive regulations. The report also underscored the role of COVID-19 in stimulating innovation: “Fintech is still relatively nascent given that 25% to 50% of the region’s adult population remains underbanked or unbanked, but the COVID-19 pandemic has accelerated the adoption of digital financial services.”

Read the full report here. In the meanwhile, here is our look at the fintech unicorns from Credit Suisse’s ASEAN unicorn roundup.

Indonesia

  • Akulaku: a banking and digital finance platform providing digital banking, consumer credit, digital investment, and insurance brokerage services to underserved consumers in Indonesia, the Philippines, Vietnam, and Malaysia.
  • OVO: a digital payment service, headquartered in Jakarta, that offers one of the biggest e-wallets in Indonesia.
  • Xendit: an end-to-end digital payments solution provider for small businesses and large enterprises alike.

The Philippines

  • Mynt: a fintech partnership between Globe Telecom, the Ayala Corporation, and Ant Financial focused on payments, remittances, loans, business solutions, and platforms.

Singapore

  • Advance Intelligence Group: an AI-driven technology parent company offering buy now pay later services, digital lending, and e-commerce products and services.
  • Matrixport: a digital assets and financial services platform that supports investing and trading in cryptocurrencies.
  • NIUM: an international payments platform for cross-border payments, local accounts, and card issuance.

Thailand

  • Ascend Money: a digital payments and financial services company providing wealth management, lending, and insurance products to 50 million users in six countries in Southeast Asia.

Vietnam

  • Vietnam Payment Solution (VNPAY): a Hanoi-based electronic payments solution provider offering mobile banking, phone recharge, and billpay for banks, e-commerce businesses, and telecoms.

Not included in our round-up are a handful of companies characterized by Credit Suisse ASEAN Research as “e-commerce” or “real estate tech.” These firms include Blibli and JD.ID of Indonesia, Carsome of Malaysia, and Carousell, Carro, Lazada, and Moglix of Singapore among the e-commerce unicorns. The region’s real estate technology unicorns featured include Singapore’s JustCo and PropertyGuru.

Here is our look at fintech innovation around the world.

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

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Conversations from FinovateFall: The Road to Collaborative Banking with ASA Head of Fintech Relationships Ryan Ruff

Conversations from FinovateFall: The Road to Collaborative Banking with ASA Head of Fintech Relationships Ryan Ruff
By David Penn Posted on
Categories: ASA, FinovateFall 2021, Speaker series

At FinovateFall we had a number of conversations with fintech professionals on the challenges of forging successful fintech partnerships. One of the more illuminating discussions we had was with Ryan Ruff, Head of Fintech Relationships with ASA Technologies, who discussed his company’s unique approach to helping fintechs and financial institutions build more constructive collaborations.

As both a fintech executive and a fintech founder, Ruff has a unique understanding of the challenges that fintechs and financial institutions often face when trying to work together. In our discussion at FinovateFall, he explained what some of those pain points are and how ASA Technologies’ platform enables both parties – fintechs and financial institutions – to maximize their interaction with each other, minimize inevitable risks, and focus on core competencies.

On the challenges financial institutions and fintechs face when trying to forge meaningful partnerships.

One of the things we’ve noticed is that everyone understands banking-as-a-service. What that really (represents) is a relationship between one fintech and one financial institution. And there’s a lot of risk there. On the financial institution side, they are asking the question: is this fintech really going to succeed? Do they have the capital? Are they PCI compliant? SOC-2 compliant? There’s a lot of risk in that relationship.

What we do is (offer) a contractual agreement where one financial institution enters into a partnership with all of the fintechs (on our platform), so that if one of them fails, it’s not that big of a deal because there are more coming and there are others on the platform, so it takes away that risk of partnering.

On the other side, the fintechs, when they get on to our platform, they are now partnering with all of the financial institutions, so they can go and find the ones that are most conducive to their clients and can send all their clients to that institution.

On the importance of building understanding and trust among all parties

It’s important that the technology piece is secure, that it’s being done in a compliant way … that’s very important and we work on that. But it’s also important that the revenue models work for both parties as well. (For example) if a fintech has a lead for a banking service like a home loan or a car loan or a student loan, they can send that back to the ASA platform, where the customer is actually a client for the institution. That institution gets to do that loan and then the referral fee goes back to the fintech that provided the referral. So both sides are making money, and they are able to stay in their core competencies and really work at scaling their core value propositions.

What makes a fintech special is that it’s a niche application. It’s something that’s going to help a specific user. Ironically, when you try to go partner with a financial institution, they are looking at it and saying I don’t know if this is going to affect a big enough segment of our user base, so I don’t know if it’s worth doing the partnership. The very thing that makes your fintech special, is what makes it hard to partner.

Now in (our) model, the financial institution is not just getting this one fintech that gets one sliver, they’re getting all the fintechs (which will) hit a much wider base collectively. So it makes more sense for both parties when you’re doing it “multiple (fintechs) to multiple (financial institutions).”

On the way that the current social and economic climate has impacted the work ASA does

It’s made the need for what we do even greater. People are changing what they need out of a bank, and they’re changing what they need out of a fintech because our world is changing. We’re trying to come into a new normal right now that a lot of people don’t understand, and wonder what the future is going to look like. We’ve got a platform where people can build those user experiences really quickly, get them to scale, and get them to market quicker than ever before. So really this moment brings an opportunity for our institutions and our fintechs to be able to collaborate together quickly to build those experiences that people are going to want in this new environment that we’ve all been thrown into.

Check out the rest of our conversation with Ryan Ruff from FinovateFall 2021 on creating successful fintech partnerships – and the importance of moving beyond open banking to what he calls “collaborative banking.”

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Goldman Sachs and American Express Collaborate on a Cloud-based Corporate Payments

Goldman Sachs and American Express Collaborate on a Cloud-based Corporate Payments
By David Penn Posted on
Categories: American Express, Daily news

A partnership between Goldman Sachs and American Express will give corporate clients the ability to leverage a cloud-based payment service that supports multiple payment options and provides data and analytics in a single, integrated platform.

“A major pain point for our large commercial card clients is managing multiple platforms and myriad time-consuming, costly and complex processes to make, track, and reconcile thousands of payment transactions every day,” American Express EVP of Global Commercial Services Dean Henry explained. He said that the partnership would help drive modernization in B2B payment operations, “setting a new standard in transaction banking for big business by offering access to faster payments and real-time tracking that can increase efficiency and reduce costs.”

The partnership will embed AMEX’s virtual cards into Goldman Sachs’ Transaction Banking platform, TxB, which currently offers ACH, wire, and foreign currency payments. Additionally, the integrated solution will include:

  • A simple “one flow” process that combines both virtual card and non-card payment activity into a holistic set of B2B payment instructions
  • An intelligent payments engine that routes payments into specific payment channels to optimize buyer preferences based on speed and cost
  • Access to spend data and analytics via a dashboard accessible to both buyers and suppliers, including real-time updates on payment status
  • Actionable insights to enable corporate CFOs to make better, more informed decisions

Goldman Sachs launched its Transaction Banking platform in June 2020 in the United States, and extended the service to the U.K. a year later. Since its stateside launch over a year ago, Goldman Sachs has bagged more than 250 clients, realized more than $35 billion in deposits, and processed trillions of dollars through its systems. The TxB platform leverages a set of RESTful APIs to empower clients to create virtual accounts, originate payments and track account activity, as well as review and manage payments from third parties. The technology is geared principally for direct users, such as corporate treasurers, and also serves as a payments and banking-as-a-service platform for Goldman Sachs’ clients to offer their end users.

“As we surveyed our clients we heard consistent feedback that there was scope to improve the cash management and payment processing set of services,” Goldman Sachs Global Co-Head of the Investment Banking Division Jim Esposito said this summer when the technology was launched in the U.K. He underscored the firm’s 150-year track record in financial and risk management experience, adding “we see huge potential to grow this business in the U.K. and globally.”

The new payment service is already available to select clients. General availability is expected in early 2022.

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Fintech’s First Quantum Computing Startup Secures Seed Funding

Fintech’s First Quantum Computing Startup Secures Seed Funding
By David Penn Posted on
Categories: Daily news, Funding

In a world in which a new enabling technology seems to capture the fintech imagination at least every other year, quantum computing remains relatively elusive. The promise of being able to leverage quantum computations to accomplish tasks that challenge if not overwhelm current, classical computing technologies is one that, in the area of fintech, has yet to be realized.

Is this about to change? Multiverse Computing, which bills itself as the first quantum computing startup focused on finance, announced this week that it has secured $11.55 million (€10 million) in seed funding. The round was led by JME Ventures and featured participation from a sizable number of investors including Quantonation, EASO Ventures, Inveready, CLAVE Capital, Ikerlan, LKS, Penja Strategy, Seed Gipuzkoa, and Ezten Venture Capital Fund.

“We are a unique company in the quantum computing field,” Multiverse Computing co-founder and CEO Enrique Lizaso said. “While other firms are focused on improving the fundamental hardware and software components of quantum computers, we are keenly focused on leveraging the most advanced quantum devices available now to deliver near-term value for the financial sector.”

Multiverse Computing enables financial professionals to manage complex financial problems such as portfolio optimization and fraud detection. Using the company’s solution, Singularity, users can leverage a simple spreadsheet to run quantum algorithms on any quantum computer without requiring any expertise or experience in programming or working with quantum computers.

Founded in 2019 and headquartered in Basque Country’s San Sebastián, Multiverse Computing enjoys the support of not only its native government, local startup accelerators, and technology centers; but also of institutions like Toronto’s Creative Destruction Lab (CDL). MultiVerse Computing also has forged partnerships with a wide range of technology companies, including IBM, Microsoft, Amazon AWS, Fujitsu, and Quantum Technologies, and said it is collaborating with a number of financial institutions, as well.

“We believe Multiverse Computing will be a global leader in the quantum computing industry,” Lizaso said. “We expect to have annual revenue close to €100 million by 2027 with a staff of 100 people.”

The company plans to use the funding to support its expansion into markets like energy, mobility, and smart manufacturing. The capital will also help fuel Multiverse Computing’s international growth including an office in Toronto and new offices in Paris, France, and Munich, Germany.

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Facebook Launches Novi Digital Payment App Pilot with Pax Dollar Rather Than Diem

Facebook Launches Novi Digital Payment App Pilot with Pax Dollar Rather Than Diem
By David Penn Posted on
Categories: Daily news, Facebook

Facebook has launched a pilot project for its digital payments app Novi and, courtesy of partnerships with Paxos and Coinbase, will use USDP (Pax Dollar) rather than its Diem stablecoin. The pilot will involve users in Guatemala and the U.S., enabling them to send money to their contacts internationally via the Novi app. The fund transfers are instant, secure, and fee-free.

The decision to use USDP, according to Novi head David Marcus, was not intended as a negative change-of-heart toward Diem. “Our support for Diem has not changed,” Marcus said. “We intend to migrate Novi to the Diem payment network once it (receives) regulatory approval.” He added that using USDP for the pilot project would enable the team to test the technology with a stablecoin that had both a track record of successful operation, as well as “important regulatory and consumer protection attributes.”

First introduced two years ago (as Libra), Diem was initially planned for a 2020 release. However, regulatory concerns emerged almost immediately. For some, the issue was Facebook’s role itself and the potential problems of a for-profit corporation issuing currencies. Others worried about how to classify the technology, as well as how to effectively regulate the Libra platform – especially if the technology was used to help Facebook expand into banking and lending services. These concerns, and Facebook’s apparent inability to respond to them thoroughly, led to a number of high-profile withdrawals from the project, as Mastercard, PayPal, Stripe, and Visa all elected to exit the Libra Association, an organization established to oversee the development of the technology. In November 2020, the project was revised so that Libra would be backed by a single currency, the U.S. dollar, on a one-to-one basis rather than backed by a basket of multiple currencies as previously planned. The project was also rebranded “Diem.”

In the current project, Novi will use the USDP for transactions, and Coinbase will serve as the custody partner. But as far as Facebook is concerned, the selection of the Pax Dollar over Diem at this point is more of a tactical retreat than a strategic withdrawal. “We believe a purpose-built blockchain for payments, like Diem, is critical to deliver solutions to the problems that people experience with the current payment system,” Marcus explained.

That said, even the new project continues to face criticism, with a handful of senators – including Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts – urging Facebook to suspend the project immediately. “Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risk and keep consumers safe has proven wholly insufficient,” the senators said in a statement.

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More Than $1.1 Billion Raised by 14 Alums Q3 2021

More Than $1.1 Billion Raised by 14 Alums Q3 2021
By David Penn Posted on
Categories: Alumni News, David's column, Funding, Fundings, Quarterly Funding

For the third Q3 in a row, Finovate alums have raised at least $1 billion in equity funding. This year’s third quarter is consistent with both the amounts raised ($1.1 billion) and the number of alums securing investment (14) from the same quarter last year.

Interestingly, August continues to be a strong month for alum funding during the third quarter; for a third consecutive year, August investment has exceeded that of both July and September for our Finovate alums.

Previous Quarterly Comparisons

  • Q3 2020: More than $1.2 billion raised by 14 alums
  • Q3 2019: More than $1 billion raised by 21 alums
  • Q3 2018: More than $400 million raised by 19 alums
  • Q3 2017: More than $1 billion raised by 31 alums
  • Q3 2016: More than $500 million raised by 30 alums

The third quarter of 2021 also saw one company, DriveWealth, become far and away the biggest recipient of investment dollars, topping the second biggest fundraiser by 3x. Three companies, M1 Finance, Alloy, and AuthenticID, secured triple-digit investments of at least $100 million.

The top ten equity investments, in a quarter with fourteen total alum fundraisings, represented the lion’s share of Q3’s investment total. Approximately 90% of the quarter’s total funding was represented by Q3’s top ten investments.

Top Ten Equity Investments for Q3 2021

  • DriveWealth: $450 million
  • M1 Finance: $150 million
  • Alloy: $100 million
  • AuthenticID: $100 million
  • Ocrolus: $80 million
  • Paystand: $50 million
  • Sezzle: $30 million
  • Dwolla: $21 million
  • Moneyhub: $18 million
  • Capitalise.com: $13.8 million

Here is our detailed alum funding report for Q3 2021.

July 2021: More than $469 million raised by seven alums

August 2021: More than $476 million raised by five alums

September 2021: More than $180 million raised by two alums

If you are a Finovate alum that raised money in the third quarter of 2021, 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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Pagaya and SoFi Team Up to Broaden Access to Financial Services for Borrowers

Pagaya and SoFi Team Up to Broaden Access to Financial Services for Borrowers
By David Penn Posted on
Categories: Alumni News, Daily news, SoFi

A newly announced collaboration between AI-powered credit and analysis technology company Pagaya and personal financial services innovator SoFi will help more eligible consumers find and secure financing. The partnership will enable SoFi members to leverage Pagaya’s AI network to access a wider range of financial solutions in what Pagaya said is the largest deployment of its technology in the fintech space to date.

“We are excited to leverage SoFi’s sophisticated tech platform, strong brand, and consumer appeal to originate loans through Pagaya’s AI network,” SoFi CEO Anthony Noto said, “extending its business to a broader audience, so more people can access credit and achieve their financial goals.”

Pagaya’s technology and infrastructure enables financial institutions, including lenders and fintechs, to offer their customers access to financial products beyond those available via traditional credit models. Using both AI and machine learning, Pagaya lowers risk for lenders and helps them make better credit decisions. The goal is to provide a better, more positive experience for borrowers, and higher conversion rates for loan providers, as well as improving the overall credit ecosystem.

“As Pagaya grows, it is imperative that we partner with companies that share our vision of providing increased efficiency through our AI network for lenders and access for its customers,” Pagaya CEO and co-founder Gal Krubiner said. “Working with a company such as SoFi, we are able to apply our artificial intelligence in a way to not only help SoFi extend capital to more people, but do so in a way to create less risk for our partner. This creates a symbiotic, win-win-win ecosystem across all parties.”

Founded in 2016 and maintaining offices in Tel Aviv, New York, and Los Angeles, Pagaya became a public company earlier this fall in a $9 billion SPAC merger with EJF Acquisition Corporation. Earlier this month, Pagaya appointed former JP Morgan CMO Leslie Gillin to the post of Chief Growth Officer. Gillin arrives at a time when the company is looking to expand into new markets including personal and auto loans, credit cards, point-of-sale financing, single-family residencies, and more.

SoFi is an alum of our developers conference FinDEVrNewYork in 2017, which the company participated in with financial data platform Quovo. In the years since, SoFi has grown into a digital financial services giant with more than $50 billion in funded loans, and more than two million members who have paid off a total of more than $22 billion in debt. Additionally, the company recently has launched solutions such as SoFi Money and SoFi Invest which offer cash management (including early payday) and brokerage services, in a major expansion beyond its roots as online loan financing and refinancing innovator.

SoFi is a publicly traded company on the NASDAQ under the ticker SOFI and has a market capitalization of more than $16 billion. SoFi is headquartered in San Francisco, California.

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Emerging Markets Lender Tala Scores $145 Million in Series E Funding

Emerging Markets Lender Tala Scores $145 Million in Series E Funding
By David Penn Posted on
Categories: Finovate Global

In a round led by Upstart, and featuring participation from DeFi network Stellar Enterprise Foundation and new investors Kindred Ventures and the J. Safra Group, emerging markets digital lender Tala has raised $145 million in funding. The Series E round takes the company’s total capital raised to more than $350 million. The investment also gives the company a valuation estimated at more than $800 million.

The new capital will help the company continue to offer lending services to both consumers and small businesses. The additional funding will also enable Tala to “accelerate the rollout” of a new offering: a financial account designed to make it easier for its customers to “grow, save, and manage” their money. Tala currently provides loans between $10 and $500 and noted in a blog post that more than six million people have used its app since inception. The company has customers in Kenya, the Philippines, Mexico, and India who have borrowed a total of $2.7 billion. Tala added that more than 12,000 new users are signing up for the service every day.

Tala is also looking to expand into the digital asset business, as well. “We’ll also work to develop one of the first mass-market crypto products for emerging markets to help make crypto solutions more affordable and equitable for those who need them most,” the company added. Tala will use its new relationship with the Stellar Network to pursue this project.

Tala evolved from InVenture, a company launched by Tala founder and CEO Shivani Siroya to help micro-entrepreneurs in Africa and India build credit histories. The rebrand was an effort to move “beyond building just credit scores to become a company that will also take the first risk on our customers and lend to them directly.” Tala leverages applicant phone data and activity (such as the timeliness of bill payments) to establish creditworthiness and to determine appropriate lending amounts. Via the Tala app, borrowers can apply for funding in minutes and, once approved, can have funds deposited in their accounts or sent to a preferred cash out location in seconds.

This week’s investment also featured participation from existing investors including IVP, Revolution Group, PayPal Ventures, and Lowercase Capital. Launched in Nairobi, Kenya, Tala is currently headquartered in Santa Monica, California.

Here is our look at fintech innovation around the world.

Latin America and the Caribbean

Asia-Pacific

Sub-Saharan Africa

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

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J’rrive! Arival Bank Launches As a Fully Licensed and Regulated Bank

J’rrive! Arival Bank Launches As a Fully Licensed and Regulated Bank
By David Penn Posted on
Categories: Alumni News, Arival Bank, Daily news

Arival Bank, which won Best of Show in its FinovateAsia debut in 2018, is now a fully licensed and regulated bank. The company was granted its U.S.-based banking license in Puerto Rico and will leverage its “U.S.-based but internationally friendly” license to work with customers around the world. The license generally allows banks to offer full stack fiat banking services, upon receiving the necessary authorization from the local regulator.

Arival Bank’s primary customers are international technology firms. The bank offers these companies USD-based bank accounts, and supports both domestic and international payments for global technology companies. Arival so far has onboarded more than 100 business customers from more than 25 countries, with the biggest demand coming from firms in the U.S., Canada, the U.K., European Union, and Singapore. Arival has experienced 1.7x month-over-month growth and boasts $13 million in assets under management.

“We’re focused on providing bank accounts to customers who have been labeled as ‘abnormal’ or ‘too risky’ by traditional banks,” Arival Bank COO Jeremy Berger explained in a statement. These firms include everything from international tech startups, digital SMEs, and money service businesses, to crypto exchanges and blockchain startups. “We’ve proudly turned this market of misfits into our niche, and we strongly believe the market demand of the ‘abnormal’ will soon outgrow the demand of the traditional banking clientele,” he said.

Arival’s management team (Director of IT Security Raul Rosado, Head of Finance Vivien Fernandez, CCO Sonia Camacho, Head of Global Compliance Ana Cavallini, Co-Founders Igor Pesin and Jeremy Berger) at the Office of the Commissioner of Financial Institutions in San Juan, Puerto Rico. 

In terms of traction, Arival Bank recently was invited to FinCEN’s innovation program to showcase its compliance technology to more than 20 top U.S. regulators. FinCEN is the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury that focuses on defending the financial system against criminal and illicit activity, including money laundering. “We’ve built a compliance-first culture and like to think of ourselves as a cutting-edge compliance firm with a banking license,” Berger said. “That’s really our X factor at the end of the day.”

Additionally, Arival Bank has inked a partnership with Railsbank to launch SGD accounts and local payments as part of its borderless account opening offering. The company noted that it may leverage its relationship with Railsbank to expand its services in regions like Europe and Latin America.

“We’ve achieved significant traction since our launch – in large part thanks to our supportive group of visionary investors from our Seed and Pre-A rounds,” Arival Bank co-founder and CFO Igor Pesin said. “They’ve enabled us to invest heavily into key facets of building a digital bank fit for the 21st century: licensing, technology, infrastructure, compliance, and user experience.”

“We’re starting to gear up for our Series A round as we enter a new phase of growth driven by scaling our footprint internationally,” Pesin added. “Being live operationally is somewhat atypical for a licensed digital bank at their Series A round. In other words, our commitment to infrastructure meets our readiness to scale. And we have the license, product, and team to become the go-to digital bank for a new generation of businesses and entrepreneurs.”

Founded in 2018, Arival has 50 employees and hopes to double its workforce by 2022. The company’s investors to date include SeedInvest, Crowdcube, and Polyvalent Capital. Earlier his year, Arival Bank was nominated by Daily Finance as one of the top Fintech Companies in Singapore.

Photo by Donald Tong from Pexels

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