Author: Jim Bruene

Feature Friday: “Combine Usernames” from Capital One

Feature Friday: “Combine Usernames” from Capital One
By Jim Bruene Posted on
Categories: Capital One, Mobile Banking, UX

Capital One just updated its Wallet iPhone app to include gift cards. That seemed like a good candidate for this week’s Feature Friday.

capital_one_combine_usernamesBut on the way to checking out the gift card feature, I ran into another new Capital One feature I love. It’s called Combine Usernames and it does just that. The option appeared automatically on the first screen when I first logged into the latest issuer’s standard mobile banking app (not the newer Wallet app) (see inset). The card giant noticed I had two usernames registered and offered to automatically combine them. It’s not something I’ve run into before, and it’s super convenient for those of us who can’t keep their digital life in sync. After selecting Combine Usernames near the bottom of the main screen, you are directed to a new screen with instructions to swipe to combine. I swiped and it worked immediately, although the page warned it could take up to 72 hours. I wasn’t sure what was lurking under my other username, but it turns out it was my old ING Direct (now Capital One 360) account. Now, everything’s visible on the app, and I’m in sync at Capital One. ———– I’ll cover the gift card function after I test it at Starbucks. Enjoy your weekend.

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Fintech Fundings: 24 Companies Raise $1.3 Billion Week Ending 2 Oct 2015

Fintech Fundings: 24 Companies Raise $1.3 Billion Week Ending 2 Oct 2015
By Jim Bruene Posted on
Categories: Fundings

dollar_arrowFintech circles were abuzz this week as four massive fundings pushing several companies higher up the billion-dollar valuation ladder (yep, I can avoid the U-word if I really try).

SoFi’s $1 billion received wide coverage this week, but we’d already covered it a month ago, so it’s not included in this week’s total. But even without that massive inflow earmarked for U.S. student loans, the worldwide fintech total surpassed one billion ($1.265 billion to be precise) thanks to Paytm, $675 million; Avant, $325 million; and 22 others. And every known round, not including Blooom’s grant, was seven figures or more.

Finovate alum fundings included: Kreditech, $92 million; Cloud Lending, $8 million; InForcePRO, $4 million; MX, $4 million from CheckFree founder Pete Kight; Blooom, $50,000 grant; and Elevest, an alum-by-proxy given its co-founder’s (Charlie Kroll’s) CV as founder of charter alum Andera, as well as an acquirer of many Best of Show wins by oFLows.

So far this year, we’ve tracked $14.5 billion flowing to fintech companies worldwide including a whopping $6.3 billion this past quarter.

Funding rounds by size from 26 Sep to 1 Oct 2015:

Paytm
mCommerce and bill payment platform
HQ: Noida, India
Latest round: $675 million; $4 billion valuation
Total raised: $875 million
Tags: Mobile, commerce, payments, shopping, billpay, Alibaba (investor)
Source: Crunchbase, VentureBeat

Avant
Consumer alt-lender
HQ: Chicago, Illinois
Latest round: $325 million; $1+ billion valuation
Total raised: $1.73 billion, includes $1.05 billion in debt
Tags: Consumer, credit, loans, lending, underwriting, near-prime
Source: Crunchbase

Kreditech
Consumer alt-lender
HQ: Hamburg, Germany
Latest round: $92 million Series C
Total raised: $355 million; $140 million equity, $215 million debt
Tags: Credit scoring, lending, underwriting, lending, loans, consumer, Finovate alum
Source: Finovate

Elevate
Consumer alt-lender
HQ: Texas City, Texas
Latest round: $70 million debt
Total raised: Unknown
Tags: Consumer, credit, underwriting, installment loans, line of credit
Source: Crunchbase

PushPay
Mobile payments platform
HQ: Auckland, New Zealand
Latest round: $18.7 million
Total raised: $35.5 million
Tags: Payments, consumer, acquiring, merchants, processing, SMB
Source: FT Partners

Ellevest
Investing platform for women
HQ: New York City, New York
Latest round: $10 million
Total raised: $10 million
Tags: Investing, asset management, wealth management, Charlie Kroll (co-founder and Finovate alum)
Source: Finovate

Credible
Alt-student lender
HQ: San Francisco, California
Latest round: $10 million
Total raised: $12.7 million
Tags: Consumer, credit, lending, loans, students, youth, underwriting
Source: Crunchbase

Zameen
Pakiston real estate hub
HQ: Lahore, Pakistan
Latest round: $9 million Series A
Total raised: $9 million
Tags: Mortgage, home buying, properties
Source: Crunchbase

Cloud Lending Solutions
Enterprise lending platform
HQ: San Mateo, California
Latest round: $8 million Series A
Total raised: $10.25 million
Tags: Lending, enterprise, loans, credit, Finovate/FinDEVr alum
Source: Finovate

Qualpay
Payment processor
HQ: San Mateo, California
Latest round: $8 million Series A
Total raised: $8 million
Tags: Payments, merchants, SMB, acquiring, credit/debit cards
Source: FT Partners

QuanTemplate
Reinsurance platform
HQ: Gibraltar
Latest round: $7.6 million
Total raised: $9.8 million
Tags: Insurance, enterprise
Source: Crunchbase

Chillr
Mobile person-to-person payments
HQ: Cochin, India
Latest round: $6 million
Total raised: $6.5 million
Tags: Consumer, mobile payments, P2P
Source: Crunchbase

MMKT Exchange
Middle market loan-syndication platform
HQ: New York City, New York
Latest round: $5.9 million
Total raised: Unknown
Tags: Commercial lending, loans, secondary market, enterprise
Source: FT Partners

Coinplug
Bitcoin services
HQ: South Korea
Latest round: $5 million Series B
Total raised: $8.3 million
Tags: Virtual currency, cryptocurrency, blockchain, bitcoin
Source: Coindesk

InForcePRO
Insurance policy-holder analytics
HQ: Austin, Texas
Latest round: $4 million Series A
Total raised: $6.55 million
Tags: Insurance, enterprise, metrics, big data, analytics, Finovate alum
Source: Finovate

MX (formerly MoneyDesktop)
Digital banking platform
HQ: Utah
Latest round: $4 million
Total raised: $54 million
Tags: Digital banking, mobile banking, B2B2C, consumer, Pete Kight (investor), Finovate/FinDEVr alum,
Meet them 6/7 Oct at FinDEVr San Francisco
Source: Finovate

AboutLife
Retirement planning
HQ: San Francisco, California
Latest round: $3 million Series A
Total raised: $3 million
Tags: Wealth management, investing, financial planning, consumer, PFM
Source: Crunchbase

Orb (formerly Coinpass)
Digital payments platform
HQ: Tokyo, Japan
Latest round: $2.3 million
Total raised: $2.8 million
Tags: Blockchain, payments, bitcoin, cryptocurrency, digital currency
Source: Crunchbase

Safe Cash Payment Technologies
Blockchain-based payments
HQ: San Francisco, California
Latest round: $1.2 million Seed
Total raised: $1.2 million
Tags: Payments, bitcoin, blockchain, consumer, Naveen Jain (investor)
Source: Coindesk

Blooom
401(k) management
HQ: Kansas City, Kansas
Latest round: $50,000 Grant
Total raised: $300,000
Tags: Retirement planning, consumer, 401(k), investing, LaunchKC Accelerator, Finovate alum
Source: Finovate

Adyen
International payments platform
HQ: Amsterdam, Netherlands
Latest round: Undisclosed; $2.3 billion valuation
Total raised: $266+ million
Tags: Payments, SMB, enterprise, remittances, payment processing
Source: Crunchbase

DwellExchange
Crowdfunding home-equity loans
HQ: New York City, New York
Latest round: Undisclosed
Total raised: Unknown
Tags: Lending, P2P loans, mortgage, real estate, consumer
Source: Crunchbase

WorldCover
P2P platform providing insurance for the unbanked
HQ: New York City, New York
Latest round: Undisclosed
Total raised: Unknown
Tags: Underbanked, insurance, investing, peer-to-peer
Source: Crunchbase

Transaction Mobility International
White-label payment processing
HQ: Singapore
Latest round: Undisclosed Series A; $33 million valuation
Total raised: $550,000+
Tags: Payments, mobile, acquiring, merchants, SMB
Source: Crunchbase

—–

Graphic licensed from 123rf.com

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Success in Financial Services Starts with Trust

Success in Financial Services Starts with Trust
By Jim Bruene Posted on
Categories: Credit/Debit Cards, Security

bank_vault

There is a reason why startups have captured approximately 0% of bank deposits a full two decades into the internet era. TRUST. Anyone hoping to get consumers to transfer thousands of dollars their way, must first win the trust battle. That means a killer combination of brand name, convenience, service, transparency, performance guarantees or measurable price/performance advantage.

I’m not saying you need to max out on all those variables, that’s not sustainable cost-wise. But you need to get to minimum levels on all and excel in one or two.

This isn’t news to anyone who’s been involved in the financial services space for more than a few months. But I was reminded of how newcomers are their own worst enemy sometimes when I got the following message from Coin today.

Now don’t get me wrong. I am a huge fan of the space (Dynamics is the pioneer in advanced cards, taking home yet another Best of Show award at Finovate two weeks ago, and we watched Stratos unveil their card at FinovateSpring). And I can understand that there will be delays when 400,000 people preorder your new hardware when you were expecting a tenth of that. But if you want me to entrust my cards to you, be forthcoming in all your communications.

Apparently, I’ll be getting my Coin in October, the last of the original 2013 preorders to ship (Coin’s website says new orders will begin shipping in November). The good news after the long wait is that I’m getting the next-gen EMV version, an important improvement over what I paid $50 for 22 months ago.

But I don’t think the company is doing itself any favors with the disingenuous FAQ on the email:

Q. Why am I receiving Coin 2.0 if I never received Coin 1.0?
(My translation: Why has it taken almost two years to get this thing?)

A. Your first generation Coin was scheduled to arrive next month. But as we just announced, Coin 2.0, we have given you a free upgrade!
(My translation: It took so long to manufacture this thing, the world moved to a new standard, so we had to ship you the new one even though it cost us a bunch more to make.)

Bottom line: Coin has had a tough two years dealing with unprecedented demand (as far as new fintech is concerned) and not uncommon hardware delays. Now, they need to get back on track by telling their mostly patient customers the whole truth and nothing but the truth.

—————

Email from Coin to the last of its preorder customers (30 Sep 2015)

coin_email

Photo credit: Flickr

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Mobile Monday: Helping Customers Understand EMV & Mobil Payments

Mobile Monday: Helping Customers Understand EMV & Mobil Payments
By Jim Bruene Posted on
Categories: Apple, Capital One, Mobile Payments, Service

emv_dipThis week’s EMV “liability shift” in the United States is expected to be a boon for mobile payments. We are undergoing a massive expansion in number of NFC-enabled terminals, at a time when Apple and Android Pay are not only measurably faster than the more time-consuming “chip dip”, but also more secure. That’s a HUGE change in the “relative UX” between the two options.

Savvy issuers should seize on the negative publicity and confusion around EMV plastic cards and push NFC options, both within the native app and on desktop and mobile websites.

But from what I saw today during a tour of several dozen major bank and credit union mobile sites (using iPhone 6), very little is discussed about this change. In fact, none of the 25 largest banks address it on their mobile homepages. I finally found one mid-sized credit union that addressed EMV (First Tech Federal Credit Union) and another that mentioned Apple Pay, albeit a few screens down (Stanford Federal Credit Union), but neither of them addressed both issues (see screenshots below). Both CUs have responsive homepages, so the messaging was the same on both the desktop and mobile web.

Most issuers address basic EMV questions when sending new chip-cards to customers. But I’m guessing that:

number of cardholders who read the EMV instructions
x
the number that understood it
x
the number that remember it
=
zero

This is a good opportunity to get your cardholders on board with Apple Pay and Android Pay. And don’t forgot to help them understand how to make your card the default in the Apple Wallet (previously called Passbook). Refer to Capital One’s email explanation sent to cardholders after adding their card (screenshot below).

———–

Mobile website homepages from Stanford Federal Credit Union (left) and First Tech FCU (right)
As seen on iPhone 6 at noon, 28 Sep 2015

stanford_FCU_mobilehome 1sttech_mobilehome

———-

Capital One email sent to cardholder minutes after adding card to Apple Pay and authorizing through Capital One mobile app (28 Sep 2015)

capitalone_applepay_email2

——–

FinDEVr2015LogoV2DateWe will be addressing issues in EMV, mobile payments, and much more at Finovate’s second annual developers’ event, FinDEVr, 6/7 October in San Francisco.

 

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Fintech Fundings: 17 Companies Raise $235 Million Week Ending 25 Sep 2015

Fintech Fundings: 17 Companies Raise $235 Million Week Ending 25 Sep 2015
By Jim Bruene Posted on
Categories: Uncategorized

Money_circuitFunding to the fintech sector maintained pace this week with another quarter-billion ($234.3 million) added to the bank accounts of 17 startups worldwide. The biggest pure-equity round went to Finovate-alum CoverHound, an insurance portal gaining favor with the VC community.

There were several interesting acquisitions including French bank Credit Mutual Arkea paying a reported $56 million for a majority stake (86%) in payment processor Leetchi, aka MangoPay. But the big news in the Finovate office was the acquisition of crowd-favorite BillGuard by one of our inaugural presenters, and double-unicorn, Prosper.

So far this year, fintech companies have raised $13.2 billion.

Here are the deals announced from 19 Sep to 25 Sep 2015, by size:

Harmoney
Consumer marketplace lender
HQ: Auckland, New Zealand
Latest round: $127 million (debt and equity)
Total raised: $135 million
Tags: Consumer, p2p, lending, credit, loans, investing
Source: P2P-Banking

CoverHound
Insurance portal
HQ: San Francisco, California
Latest round: $33.3 million; $100 million valuation
Total raised: $53 million
Tags: Consumer, insurance, lead gen, quotes, Finovate alum
Source: Finovate

DriverUp
Auto lending marketplace lender
HQ: Austin, Texas
Latest round: $20 million
Total raised: $70 million
Tags: Consumer, automobiles, auto loans, P2P lending, credit, investing
Source: Crunchbase

G-Banker
Gold trading platform
HQ: Bejing, China
Latest round: $16.8 million Series B
Total raised: $16.8+ million
Tags: Gold, investing, wealth management, trading, online-to-offline
Source: Crunchbase

Leetchi
Payment processor, aka MangoPay
HQ: France
Latest round: $11.1 million; $65 million valuation
Total raised: $56 million
Tags: Consumer, peer-to-peer payments, P2P, group payments, Credit Mutual Arkea (investor, majority owner)
Source: FT Partners, TechCrunch

Steller
Public infrastructure for money
HQ: San Francisco, California
Latest round: $7 million
Total raised: $10 million
Tags: Payments, blockchain, open source, developers, bitcoin, cryptocurrency, Stripe (investor), nonprofit
Source: FT Partners

PeerNova
Distributed financial platform
HQ: San Jose, California
Latest round: $6 million
Total raised: $19 million
Tags: Blockchain, bitcoin, cryptocurrency, enterprise
Source: WhoGotFunded

Ancoa
Risk management
HQ: London, England, United Kingdom
Latest round: $4.7 million Series A
Total raised: $6.3 million
Tags: Enterprise, security, regulations, compliance, fraud protection
Source: FT Partners

BestDealFinance
Financial services comparison portal
HQ: India
Latest round: $3 million Series A
Total raised: $3 million
Tags: Consumer, banking, loans, insurance, credit, lead gen
Source: Crunchbase

ModernAdvisor
Online investment advisory
HQ: Vancouver, British Columbia, Canada
Latest round: $2.2 million
Total raised: $2.2 million
Tags: Consumer, wealth management, investing, asset management
Source: Crunchbase

Novicap
Online invoice marketplace
HQ: London, England, United Kingdom
Latest round: $1.7 million
Total raised: $3.4 million
Tags: SMB, accounts receivables financing, factoring, trade finance
Source: Crunchbase

Ledge
Mobile P2P lending platform
HQ: Santa Monica, California
Latest round: $900,000 Seed
Total raised: $900,000
Tags: Consumer, loans, peer-to-peer, mobile
Source: Crunchbase

PaySur
Funds-transfer platform
HQ: Leon, Mexico
Latest round: $250,000
Total raised: $275,000
Tags: Consumer, payments, remittances, electronic transfers
Source: Crunchbase

Neotrade Analytics
Trading data provider
HQ: Bangalore, India
Latest round: $230,000
Total raised: $230,000
Tags: Trading, investing, enterprise, securities, data, analytics
Source: FT Partners

Crowdway (stealth website)
Financial markets analysis
HQ: Milan, Italy
Latest round: $170,000 Seed
Total raised: $170,000
Tags: Investing, information, trading, analytics, investors, wealth management
Source: Crunchbase

ConnectAbank
Financial services comparison portal
HQ: Mumbai, India
Latest round: Undisclosed
Total raised: Unknown
Tags: Consumer, banking, loans, insurance, credit, lead gen
Source: Crunchbase

Stockbit
Financial markets analysis
HQ: Jakarta, Indonesia
Latest round: Unknown
Total raised: Unknown
Tags: Investing, information, trading, analytics, investors, wealth management
Source: Crunchbase

StockRadar
Mobile stock trading information
HQ: Bejing, China
Latest round: Undisclosed
Total raised: Unknown
Tags: Consumer, trading, investing, stocks, analytics, Microsoft (investor)
Source: Crunchbase

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Commentary: Prosper Signals Move into PFM with $30 Million Acquisition of BillGuard

Commentary: Prosper Signals Move into PFM with $30 Million Acquisition of BillGuard
By Jim Bruene Posted on
Categories: BillGuard, Credit Reports & ID Theft Protection, Loans & Credit, Prosper

billguard_prosperIt’s a little bittersweet when two of my favorite fintech companies combine. I am happy for both, but will miss seeing what BillGuard could have done as a stand-alone financial transaction watchdog (see note 1). After raising $16.5 million, the $30 million in cash—plus undisclosed amount of Prosper stock (note 2)—should provide a decent payday for investors, founders and employees. Caveat: without knowing the liquidation preferences of later investors, or the stock piece, we don’t really know how all the stakeholders fared.

From the sounds of it, though, it’s no acqui-hire. BillGuard said it’s tripling its dev team to 75 and will be heading full-speed-ahead on its product roadmap. That sounds good for BillGuard.

The more difficult question is why Prosper is spending 20% of the $165 million it raised in April on an ancillary service? The company says it is looking to move into broader financial management. And with 1 million visitors per month—the vast majority of which are likely to be unqualified for a Prosper loan—marketing PFM and credit-monitoring services have some appeal. But it seems like it could be a distraction (note 3).

But at least from the outside, I’m not seeing BillGuard as a significant value-add at this point. Even if Prosper were to convert 1% of its 1-million/mo traffic (optimistic) into BillGuard’s $5 to $10/mo credit-monitoring services with a margin of 50%, that would only add $75,000/month to the bottom line or about $900,000 in the first year—assuming 50/50 mix at the two price levels. Depending on attrition rates, that would grow over time, but it’s still not a great return on $30+ million. And if Prosper is looking to mine BillGuard’s 1.7 million customers for new loans, the lender could have done it much cheaper via partnership.

Peter Renton, writing at LendAcademy, has the best justification for the deal I’ve seen. Prosper needs something to stay engaged with loan customers—and presumably denied loan customers—since there is little reason for them to log back in once the loan has been made and automatic payments established.

All those reasons are part of the valuation. But my guess is that Prosper has something grander cooking, and BillGuard is just a piece of that puzzle. Perhaps they seek to take on Credit Karma in the broader credit-reporting/lead-gen space. I look forward to more news down the road.

——

Notes:

1: Chris Larsen showcased Prosper at our initial multi-unicorn-producing Finovate in NYC in 2007, winning our very first Best of Show trophy (along with Mint and MortgageBot).
BillGuard was named Best of Show at its two Finovate appearances, 2011 and 2012.

2: The terms of the deal were not disclosed in the official announcement. VentureBeat appears to be the widely cited source of the “$30 million plus stock” terms.

3: I bet Prosper’s FI investors—BBVA, Suntrust, Chase, USAA—like the deal. They not only have an inside peek at BillGuard’s metrics, but also a ringside seat to see how a lending specialist can or cannot expand into broader banking/PFM services.

 

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Tuesday Tactics: The Art of Bank’s Own-Site Search

Tuesday Tactics: The Art of Bank’s Own-Site Search
By Jim Bruene Posted on
Categories: Capital One, Service

37948595_sOne area that’s long been marked “needs improvement” on most banks’ digital report cards is site search. But it’s getting much better. Five of the 10 largest U.S. banks—BofA, Wells, Citi, Capital One, PNC—now offer “autocomplete suggestions” something even Google didn’t fully implement until 2008.

That’s great progress, but even at these digital leaders the search results can fall short. Most FIs still present a laundry list of results with some sorting for relevance. For easy searches such as “checking,” all the majors deliver relevant results. But only one takes it to the next level, Capital One (also an honorable mention to BB&T for including thumbnail pictures, making results look much more interesting, and to PNC, for including product recommendations for some searches, e.g., “checking”).

capitalone_search_suggest1

Of the 10 U.S. megabanks, Capital One is by far the winner in our search for good search. They do five things in the initial search that most others do not:

  1. Since search is often related to branches/ATMs the bank includes a link to that at the top of the search page (see #1 in screenshot)
  2. The suggested search terms are well curated (see #2)
  3. Most-likely product-results are included at bottom with eye-catching graphics (see #3)
  4. The bank does not automatically assume you are a consumer. In this example, they showed links to both consumer (interestingly, only to the 360 products inherited from ING Direct) and business checking (see #4)
  5. The UI is very Google-like with lots of white space and no distractions

————–

In addition, Capital One’s search-results page is laid out in a user-friendly manner:

capitalone_search1

There are five key sections (noted above):

  1. Capital One assumes all searches are “questions,” so it provides the most likely answer in a shaded box at the top of the search results
  2. Other curated FAQs related to the search-term
  3. Full site-search results
  4. Contact Us section for more help
  5. Feedback loop

———-

Interestingly, unlike the other nine mega-banks, Capital One does not offer site-search directly on the homepage. A search icon is prominently located on the top right, but the bank takes you to a separate page to begin the search. I prefer searching directly on the homepage, but that’s not nearly important as delivering relevant and well-structured results.

———

Note: We looked at these major U.S. retail banks: Bank of America, BB&T, Capital One, Chase, Citibank, HSBC, PNC Bank, Suntrust, US Bank, Wells Fargo

———-

FinDEVr2015LogoV2DateWe’ll be delving deep into issues like this at the second annual FinDEVr event for digital bank builders on 6/7 October in San Francisco.

 

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Fintech Fundings: 24 Companies Raise $560 Million Week Ending 18 Sep 2015

Fintech Fundings: 24 Companies Raise $560 Million Week Ending 18 Sep 2015
By Jim Bruene Posted on
Categories: Fundings

39872916_sThe money-flow into fintech continued unabated this week with more than a half-billion ($557 million) raised by 24 companies. It was the eighth week this year that total fundings surpassed the $500-million mark. Year-to-date fintech firms have raised $13 billion.

The total included one new alum, Praesidio, which will be presenting its security and fraud-control integrations at next month’s FinDEVr. The Seattle-based startup raised $3 million to bring its total funding to $5.3 million. Also, long-time alum Alkami Technology picked up $11 million on Friday to further their e-banking solutions business.

Here are the fundings by size from 12 Sep to 18 Sep 2015:

AvidXchange
Automated billpay and accounts-payables solutions
HQ: Charlotte, North Carolina
Latest round: $225 million Series E
Total raised: $225+ million
Tags: Bill payment, accounting, SMB, payments, billing
Source: Crunchbase

Clover Health
Health insurance targeting seniors
HQ: San Francisco, California
Latest round: $100 million
Total raised: $100 million
Tags: Consumer, health insurance, seniors
Source: Crunchbase

LightSpeed
Point-of-sale system
HQ: Montreal, Canada
Latest round: $61 million
Total raised: $126 million
Tags: SMB, payments, POS, acquiring, merchants
Source: Crunchbase

Compass
Real estate marketplace
HQ: New York City, New York
Latest round: $50 million
Total raised: $123 million
Tags: Consumer, home buying, mortgage
Source: Crunchbase

Oscar
Health insurance
HQ: New York City, New York
Latest round: $32.5 million
Total raised: $327.5 million
Tags: Consumer, health insurance, SMB, Google (investor)
Source: Crunchbase

Aspiration
Online investment platform
HQ: Marina Del Rey, California
Latest round: $15.5 million
Total raised: $20 million
Tags: Consumer, investing, socially conscious, low-fee, wealth management
Source: FT Partners

Lumity
Health insurance selection for enterprises
HQ: San Mateo, California
Latest round: $14 million
Total raised: $14 million
Tags: Enterprise, SMB, insurance, benefits, human resources, HR
Source: Crunchbase

Fundera
Small-business loan marketplace
HQ: New York City, New York
Latest round: $11.5 million Series B
Total raised: $14.9 million
Tags: SMB, lending, commercial loans, lead gen
Source: Crunchbase

Alkami Technology
Digital banking solutions
HQ: Oklahoma City, Oklahoma
Latest round: $11 million
Total raised: $54 million
Tags: Online banking, mobile, Finovate alum
Source: FT Partners

Compte Nickel
French neo-bank
HQ: France
Latest round: $11.5 million
Total raised: $11.5 million
Tags: Consumer, debit card, banking, transaction account
Source: FT Partners

MarketInvoice
Receivables financing marketplace lender
HQ: London, England, United Kingdom
Latest round: $7.7 million
Total raised: $28.1 million
Tags: SMB, lending, underwriting, P2P, peer-to-peer, investing
Source: Crunchbase

Mighty
Financing to plaintiffs awaiting legal settlments
HQ: New York City, New York
Latest round: $5.3 million Series A
Total raised: $5.3 million
Tags: Consumer, legal, lending, loans, credit
Source: Crunchbase

Auger
Open-source predictions marketplace
HQ: San Francisco, California
Latest round: $4.7 million
Total raised: $4.7 million
Tags: Cryptocurrency, blockchain, Ethereum, security, payments
Source: Crunchbase

Satispay
Mobile payments
HQ: Milan, Italy
Latest round: $3.5 million
Total raised: $11.2 million
Tags: Consumer, payments, mobile, SMB
Source: Crunchbase

Praesidio
Cloud-based security for financial institutions
HQ: Seattle, Washington
Latest round: $3 million
Total raised: $5.3 million
Tags: Enterprise, security, fraud, risk management, FinDevR 2015 presenter
Source: Crunchbase

CompareIt4Me
Financial services comparison site
HQ: Dubai
Latest round: $3 million
Total raised: $3.3 million
Tags: Consumer, personal finance, price comparison, lead generation
Source: Crunchbase

PeerIQ
Risk management for P2P lending
HQ: New York City, New York
Latest round: $2.5 million
Total raised: $8.5 million
Tags: Enterprise, lending, credit, underwriting, peer-to-peer
Source: Crunchbase

AlphaClone
Stock trading strategies
HQ: San Francisco, California
Latest round: $2.3 million Series A
Total raised: $4.6 million
Tags: Consumer, advisers, investing, trading, wealth management
Source: Crunchbase

Bux
Simple mobile-trading app
HQ: Amsterdam, Netherlands
Latest round: $1.9 million
Total raised: $3.8 million
Tags: Consumer, trading, mobile, investing
Source: Crunchbase

Advizr
Financial planning software
HQ: New York City, New York
Latest round: $1.7 million Seed
Total raised: $1.7 million
Tags: Advisers, wealth management, personal financial management
Source: Crunchbase

Besepa
Direct debit management services
HQ: Madrid, Spain
Latest round: $200,000
Total raised: $300,000
Tags: Payments, billpay, SMB, accounts receivables, invoicing, billing
Source: Crunchbase

EquityZen
Secondary market for private equity
HQ: New York City, New York
Latest round: Undisclosed
Total raised: Unknown
Tags: Investing, private companies, trading, SMB
Source: Crunchbase

Mubble
Automatic bill payment for prepaid cards
HQ: Bangalore, India
Latest round: Undisclosed
Total raised: Unknown
Tags: Consumer, prepaid, debit cards, payments, billpay
Source: Crunchbase

RateGator
Mortgage marketplace
HQ: Saratoga Springs, New York
Latest round: Undisclosed
Total raised: Unknown
Tags: Consumer, lead gen, lending, mortgage
Source: Crunchbase

—–

Graphic image licensed from 123rf.com

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Reflections on the 8-year Bull Market in Fintech

Reflections on the 8-year Bull Market in Fintech
By Jim Bruene Posted on
Categories: Fundings, Metrics & Market Research

fintech_nycAs I fly to NYC for the ninth time to host FinovateFall (the biggest ever—Thanks!), I’m in awe of how much the industry has grown since 2007. Fintech wasn’t even a thing then, we were still stuck using the entire six syllables in “financial technology.” And in Sep 2007, we didn’t have a sense of the financial debacle of 2008 we were about to witness, which has shaken things up in many unanticipated ways.

The amount of money going into the sector was a fraction of where we are today. I don’t have good data for 2007, but my guess is that the $12.4 billion raised so far this year is 6x to 8x the amount raised in 2007 (YTD). Is that sustainable? Unlikely, but when you see a single Australian bank (Westpac) spending nearly US$1 billion per year, 80% of it earmarked for new technology, you get a sense of how much pent-up demand there is to modernize financial services.

In total, Celent estimates that worldwide IT spending by banks will be $200 billion this year:

  • North America = $64 billion
  • Europe = $64 billion
  • Asia/Pacific = $70 billion

And that’s banks only. Gartner, which includes securities firms along with banks in its total, says global IT spending will top $500 billion this year.

Similar amounts are spent in the insurance industry where Celent estimates $175 billion will be spent this year:

  • North America = $79 billion
  • Europe = $55 billion
  • Asia/Pacific = $31 billion
  • Other = $11 billion

Adding it all together amounts to nearly $700 billion annually, or more than $3 trillion in the next five years. I think that explains why $12 billion has been invested by VCs and Private Equity so far this year. Granted, much of the financial institution spend is currently directed internally, but that doesn’t mean it will stay that way. The entire API ecosystem is betting otherwise, and seems to be winning in many industries.

Based on those numbers, I’m not sure if we have a bubble. VC investing is high by historical standards, but given the opportunity, it may be relatively reasonable. It will depend a lot on how much the big spenders decide to outsource. And that’s almost impossible to predict.

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Fintech Fundings: 18 Companies Raise $210 Million Week Ending 11 Sep 2015

By Jim Bruene Posted on
Categories: Uncategorized

money_treeAhead of Finovate next week, it was a lively few days with 18 companies receiving cash inflows totaling $207.6 million. The total included mega-rounds of $30+ million to three lending plays: FundBox ($50 mil); CommonBond ($35 mil); Orchard Platform ($30 million); and one financial-institution-supported blockchain startup: Chain ($35 mil).

Finovate alum Trunomi raised $3 million, while FinDEVr charter-alum Coinlytics raised an undisclosed amount.

The $208 million this week brings total 2015 YTD fintech fundings to $12.4 billion. Following are the fundings from 4 Sep to 10 Sep 2015 by size:

FundBox
Accounts receivable financing for small businesses
HQ: San Francisco, California
Latest round: $50 million Series C
Total raised: $107.5 million
Tags: SMB, credit, accounts receivables, accounting, SMB
Source: Crunchbase

CommonBond
Crowdfunded student loans
HQ: New York City, New York
Latest round: $35 million Series B
Total raised: $196 million ($150 million debt; $46 million equity)
Tags: Student loans, credit, underwriting, P2P, investing
Source: Crunchbase

Chain
Enterprise blockchain technology
HQ: San Francisco, California
Latest round: $30 million Series B
Total raised: $43.7 million
Tags: Development platform, bitcoin, blockchain technology, investors (Visa, Capital One, Fiserv, Citibank)
Source: Wall Street Journal

Orchard Platform
Powering marketplace lending
HQ: New York City, New York
Latest round: $30 million
Total raised: $44.7 million
Tags: Lending, credit, developers, APIs, P2P loans, crowdfunding debt, enterprise
Source: FT Partners

DISCERN
Investment information for professional investors
HQ: San Francisco, California
Latest round: $20 million Series A
Total raised: $20 million
Tags: Investing, SaaS, big data, analytics
Source: FT Partners

Abra
Crowdsourced remittances
HQ: Silicon Valley, California
Latest round: $12 million Series A
Total raised: $14 million
Tags: Remittances, P2P payments, person-to-person
Source: Coinbase

NEFT LLC (mPowerCredit)
Credit tools for consumers
HQ: Newport Beach, California
Latest round: $10 million
Total raised: $ million
Tags: Credit score, consumer, lending
Source: Marketwatch

Deposit Solutions
Retail deposit savings account management for FIs
HQ: Hamburg, Germany
Latest round: $6.1 million
Total raised: Unknown
Tags: Deposit, banking, real estate, core solutions, enterprise
Source: FT Partners

Trading Ticket
User-friendly consumer trading service, TradeIt
HQ: New York City, New York
Latest round: $4 million Seed
Total raised: $4 million
Tags: Investing, stocks, trading, mobile, UI, consumer, Citibank (investor)
Source: Crunchbase

Trunomi
KYC systems
HQ: Hamilton, Bermuda
Latest round: $3.0 million
Total raised: $5.3 million
Tags: Security, KYC, compliance, Finovate alum
Source: Finovate

FeeX
Fee discovery for individual investors
HQ: New York City, New York
Latest round: $2.8 million
Total raised: $12.3 million
Tags: Consumer, investing, 401(k), mutual funds, 403(b), fees, lead gen
Source: Crunchbase

Shapeshift
Cyrptocurrency exchange
HQ: Zug, Switzerland
Latest round: $1.6 million
Total raised: $2.4 million
Tags: Cryptocurrency, bitcoin, altcoin
Source: TechCrunch

PractiFI
Wealth management solutions
HQ: Sydney, Australia
Latest round: $1.1 million
Total raised: $1.1 million
Tags: Investing, asset management, advisers
Source: FT Partners

Case Wallet (aka Cryptolabs)
Bitcoin wallet (hardware)
Latest round: $1.0 million
Total raised: $3.2 million
Tags: Payments, P2P pay, remittances, hardware, consumer
Source: WhoGotFunded.com

Sindeo
Online mortgage adviser
HQ: San Francisco, California
Latest round: $550,000
Total raised: $7.05 million
Tags: Mortgage, lending, lead gen, loans
Source: WhoGotFunded

MockBank
Banking job exam preparation
HQ: Bangalore, India
Latest round: $400,000 Seed
Total raised: $400,000
Tags: Human resources, regulation, enterprise, bank management, compliance
Source: Crunchbase

Coinalytics
Blockchain intelligence
HQ: Mountain View, California
Latest round: Undisclosed Seed
Total raised: $200,000+
Tags: Bitcoin, blockchain, analytics, cryptocurrency, FinDEVr alum
Source: FT Partners

Abide Financial
Regulatory reporting solutions
HQ: London, England, United Kingdom
Latest round: Undisclosed
Total raised: Unknown
Tags: Regulations, compliance, enterprise, bank management
Source: FT Partners

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The Bank as an Operating System (bankOS)

The Bank as an Operating System (bankOS)
By Jim Bruene Posted on
Categories: API, Fidor Bank

 

fidor_os_slide

Germany’s Fidor Bank, one of the three or four most-progressive financial institutions on the planet (and a FinDEVr presenter next month) uses an interesting term when discussing its strategy with developers and third parties. They call it the FidorOS (bank as an operating system). Here’s how it’s described on the bank’s tech site:

Public APIs serve as a welcoming front door to new business clients. Fidor seeks B2B clients to do for banking what Apple did for mobile applications with iTunes. Easy to use; easy to integrate. The Fidor operating system is API-based.

I’m not sure the general public will ever think of their bank as an “operating system” (ChaseOS?), but it’s a good way to describe what the most developer-friendly FI and fintech players are looking to accomplish.

fidor_tool_iconWill it work? Absolutely. Financial websites/apps will be stitched together with APIs just like every other website. Most banks already use at least one API, a third-party map to lay out bank locations. It’s just a matter of time before more behind-the-scene functions are enhanced or replaced with APIs, SaaS providers, and other integrations. It’s why Silicon Valley Bank bought API specialist Standard Treasury a few months ago.

The exciting thing about the API revolution in banking is that it doesn’t have to end in a rush to the bottom price-wise. Banks, unlike many ecommerce players, are in an enviable position of selling much-desired trust, security, risk management, convenience, service and financial connectivity. And with huge regulatory barriers to entry, they don’t have to worry about being Amazoned or Netflixed out of business, at least not for a generation or three.

Banks are more like a cable TV company, albeit without the service-dulling monopoly powers (an important distinction), bundling together a wide variety of programming/services for a fat monthly fee. I see no reason why the BankOS of the future won’t be able to collect monthly subscription fees of $20 to $25 per person in each household ($30/mo single; $50/mo couple; $75/mo family) for a highly secure, and 100% guaranteed, financial “pipe” that brings transactions, insurance, loans, investments and payments into the home.

With the entire industry going through a down-to-the-studs rebuild, it’s a great time to be a builder—whether developer, designer, IT architect, product manager—in the financial services/fintech industry.

FinDEVrwithDate—-

Join Fidor Bank as we delve into these issues and much more at our second annual FinDEVr conference on 6/7 October in rocking Mission Bay (future home of the Golden State Warriors, maybe). And don’t miss Finovate next week as well.

—-

Notes:
(1) See just how far ahead of the pack Fidor Bank was in its 2011 FinovateEurope demo
(2) Top slide from Fidor Bank’s Munich Developer Days (2015)

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Small-business Banking Strategies: Providing Peace of Mind (for a Fee)

Small-business Banking Strategies: Providing Peace of Mind (for a Fee)
By Jim Bruene Posted on
Categories: Pricing, Small Business, Strategies

kabbage_need_cash

Business owners are optimists. It’s a job requirement. So whether or not a small business is currently seeking capital, most hope to grow down the road, so the POTENTIAL to tap more funding is a huge factor when selecting a bank. It’s why small businesses have long sought to establish quality relationships with community banks or larger FIs.

But in the aftermath of the 2008-to-2012 downturn and all the negative press about the “credit crunch” (both real and imagined), business owners are less confident that their bank will come through for them when they need it. That’s why banks should offer credit to ALL small- and micro-business customers. It doesn’t have to be a large amount, or free of fees, or at an APR that would make the CFPB happy (it’s commercial credit we are talking about). FIs just need to demonstrate they have their client’s back.

small_bus_bank_iconAlong the same lines, most banks could do better providing peace of mind. The most important factors are transaction/payment reliability, service quality and, probably most important these days, security. Again, it’s about the peace of mind knowing that your bank will run your account flawlessly while keeping thieves at bay. And failing that, reimburse the losses without a business disruption.

These things cost money. But the good news is that businesses understand that and will pay for it. Most growing businesses are price-insensitive when it comes to their transactional bank account. It’s just not a material expense, especially if you factor switching costs. In fact, I have long stated that I’d be happy to pay $500/mo for a business banking account with my ideal mix of banking, security and accounting services.

That said, it won’t be easy to get to three-figure monthly fees for SMB banking. Here’s a more normal example, a fictional starter business bank account priced at $50 to $60/month ($10/mo less if paperless):

  • Checking account/debit card
  • Small-biz-branded mobile-banking app
  • Security and transaction alerts
  • Outbound payments (billpay, P2P, mPay, ACH)
  • Inbound payments (ACH, P2P, cards, mPOS)
  • Bundled credit facility (line of credit and/or credit card) with overdraft protection
  • $10/mo discount to go paperless (no paper checks, no paper statements, no in-branch deposits)
  • Credit score with alerts (sourced through Credit Karma)
  • Account scanning for fraud and questionable charges (sourced through BillGuard)
  • Loan concierge to help the business find funding (via alt-lenders if needed)
  • Basic accounting/money-management tools (outsourced to Mint, FreshBooks, Expensify, etc.)
  • Commercial eBanker (email night and day with same person if possible)
  • Fraud-loss guarantee for first $5,000, then $x/mo per $10,000
  • Multifactor security using mobile phone/GPS
  • Basic business property insurance for first $5,000, then $y/mo per $10,000
——
Graphic from alt-lender Kabbage

 

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