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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
PNC and TCW have partnered to deliver a private credit solution.
The solution will leverage TCW’s loan origination, underwriting, and portfolio management expertise and will tap PNC’s extensive client relationships.
The two will offer directly originated, secured cash-flow and asset-based loans to middle market companies.
Financial services company PNC and TCW, a leading global asset manager have teamed up this week to deliver a private credit solution to middle market companies.
The two will leverage TCW’s loan origination, underwriting, and portfolio management expertise and will tap PNC’s extensive client relationships. “We are very excited to announce this new business strategy, which represents a natural extension of TCW’s existing Direct Lending and Rescue Fund strategies with an opportunity to offer investors access to a broader segment of the middle market,” said CIO of TCW Private Credit and chair of the new joint private credit partnership Rick Miller.
The two will offer directly originated, secured cash-flow and asset-based loans to middle market companies, whether or not they have private equity or venture capital backing. Together, PNC and TCW will manage the strategy’s investment activities, which range from origination to underwriting, and portfolio management.
“We are thrilled to partner with PNC to expand our direct lending capabilities and provide financing to a critical segment of U.S. companies, as well as offer a differentiated investment solution for clients,” said TCW President and CEO Katie Koch. “PNC and TCW have a long history of developing creative solutions across a number of joint financings, and this partnership represents an exciting opportunity to capture significant market share of the expanding private credit market by leveraging the strengths of both our firms.”
During their first year, PNC and TCW aim to have $2.5 billion in investor equity capital available to invest. Supporting this fund are investments from PNC and Nippon Life, one of TCW’s strategic partners and shareholders.
Since interest rates have risen and credit has become more expensive, small businesses have become particularly vulnerable to the credit crunch. This vulnerability stems from traditional banks tightening their lending standards to mitigate risk and reduce losses. Delivering a new private credit solution should help address this gap in financing options for small businesses, providing them with much-needed access to capital to support their growth and operations.
Robinhood has received a Wells Notice from the U.S. SEC.
In the Wells Notice, the SEC staff alleged Robinhood violated Sections 15(a) and 17A of the Securities Exchange Act of 1934.
Robinhood Markets Chief Legal, Compliance, and Corporate Affairs Officer Dan Gallagher said that he is “disappointed” with the Wells Notice. “We firmly believe that the assets listed on our platform are not securities,” he said.
Stock brokerage app Robinhood is feeling the heat from the U.S. Securities and Exchange Commission (SEC) today. The California-based company revealed in a blog post over the weekend that it received a Wells Notice from the SEC.
In the Wells Notice, staff at the SEC filed an enforcement action against Robinhood, alleging the company violated Sections 15(a) and 17A of the Securities Exchange Act of 1934. The former section requires broker-dealers to register with the SEC and become a member of a self-regulatory organization (SRO), such as FINRA. The section aims to ensure that broker-dealers adhere to standards and practices to protect investors. The latter, 17A, establishes the framework for the National Securities Clearing Corporation (NSCC). This section also requires transfer agents to register with the SEC and sets standards to ensure securities transactions are efficiently processed.
According to Robinhood’s 8-K filing, “The potential action may involve a civil injunctive action, public administrative proceeding, and/or a cease-and-desist proceeding and may seek remedies that include an injunction, a cease-and-desist order, disgorgement, pre-judgment interest, civil money penalties, and censure, revocation, and limitations on activities.”
Robinhood has made it clear that it is making efforts to comply with the SEC to resolve the issue. The company originally launched Robinhood Crypto, its crypto trading arm, in early 2018. Robinhood Crypto currently allows customers in 48 states and Washington D.C. to buy, sell, store, and in many cases transfer up to 18 cryptocurrencies.
Robinhood Markets Chief Legal, Compliance, and Corporate Affairs Officer Dan Gallagher said that the company uses a “rigorous review process designed to ensure that it does not list digital asset securities.” The company said it has always been careful not to list certain tokens that the SEC has deemed securities in public actions against other platforms. Robinhood has also steered clear of products, including lending and staking, that may be considered securities.
“After years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells Notice related to our U.S. crypto business,” said Gallagher.“We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law.”
Robinhood has not disclosed any specific actions it plans to take to respond to the SEC’s notice. The company can take action to respond to the allegations before the SEC makes a move to sue or settle with Robinhood to resolve the issue. The company said that the development will impact neither the services it provides nor its end customers’ accounts.
BaaS-enabled banks have been operating in a regulatory minefield recently. Since late 2023, the U.S. FDIC and CFPB have issued multiple consent orders to banks, citing their BaaS relationships as the cause. From the perspective of an onlooker, it appeared that regulators were issuing the consent orders to make examples out of certain players in the industry, foregoing formal BaaS regulation.
This has been particularly troubling for community banks, which often rely on BaaS to adapt to modern consumer preferences by layering the newest fintech tools on top of their legacy core systems, without the need to build technology in-house or update old technology.
The agencies’ newly published document may disappoint, however. That’s because the new document does not provide formal Baas regulation by laying out rules by which community banks can abide in order to avoid consent orders. Instead, the new document lays out “potential considerations, potential sources of information, and examples” for risk management, due diligence, contract negotiation, ongoing monitoring, termination, and governance with third parties.
“This guide is intended to assist community banks when developing and implementing their third-party risk-management practices,” the new document states. “This guide is not a substitute for the TPRM Guidance. Rather, it is intended to be a resource for community banks to consider when managing the risk of third-party relationships. This guide is not a checklist and does not prescribe specific risk-management practices or establish any safe harbors for compliance with laws or regulations.”
Baas-enabled banks seeking to navigate third-party relationships may find the new resource frustrating, however. While some of the advice in the document is helpful, the agencies have built a lot of wiggle room for themselves into the document. Ultimately, however, the guidance is better than nothing.
Regardless of what it lacks, both community banks and even larger financial institutions will likely find it useful to compare the guide’s “potential considerations” to their current internal processes. And in the end, the guidance may help deter another tidal wave of consent orders.
Permira has acquired a majority stake in behavioral biometrics company BioCatch.
Existing shareholders, Sapphire Ventures and Macquarie Capital, have also increased their stake in BioCatch.
The moves have boosted BioCatch’s valuation to $1.3 billion, which is up from $1 billion last year.
Behavioral biometrics company BioCatch announced it has a new majority shareholder. Permira Growth Opportunities II, a fund advised by U.K.-based global private equity firm Permira, has acquired a majority stake in the Israel-based company by buying out shares from Bain Capital Tech Opportunities and Maverick Ventures in a secondary transaction.
Two of the company’s existing shareholders, Sapphire Ventures and Macquarie Capital, have also increased their stake in BioCatch. While specific terms of the transactions were not disclosed, the company’s valuation is now estimated at $1.3 billion.
BioCatch expects the move will help it accelerate its product roadmap and support its growth in general. The increased commitment from Permia will also aid BioCatch’s global expansion efforts. Specifically, the fraud prevention company will leverage Permia’s Continental European ties, with an aim to add new clients in that region.
“After building a strong partnership with Permira over the last year, we are delighted to welcome them as majority shareholders,” said BioCatch CEO Gadi Mazor. “The firm’s impressive experience within technology and cybersecurity, combined with their scale, global network, and our close working relationship, has been invaluable since their initial investment.”
BioCatch was founded in 2011 and has since raised around $324 million in disclosed funding. The company leverages behavioral biometric intelligence to offer account opening fraud detection, mule account detection, account takeover protection, customer authentication solutions, and more. BioCatch currently has more than 190 financial institution customers across the globe, including over 30 of the world’s largest 100 global banks.
Today’s announcement comes a year after BioCatch earned $1 billion following a $40 million investment from Permia. The move made Permia a significant minority shareholder in BioCatch, right behind Sapphire Ventures and Macquarie Capital.
“We have tracked BioCatch with enthusiasm for many years, and now having been a shareholder since early 2023, our conviction in the business, its growth potential, its technology leadership, and its management team continues to grow,” said Permia Growth Opportunities Partner and Co-Head Stefan Dziaski. “We’re excited to become the company’s majority shareholder and look forward to a continued successful partnership with Gadi and the BioCatch team as we seek to further accelerate growth and expansion in the years to come.”
Challenger bank Lunar raised $25.7 million (€24.1 million) in funding, boosting the company’s total raised to around $512 million.
Lunar plans to use today’s funds to expand on its basic package offered to Swedish residents to become a more full-service bank.
In 2023, Lunar reached 850,000 customers, marking an increase from 700,000 customers the year prior.
Challenger bank Lunarannounced this week it has raised $25.7 million (€24.1 million) in a supplementary funding round. According to Crunchbase, the new investment boosts Lunar’s total raised to just shy of $512 million, around $54 million of which was brought in over the past four months.
Lunar was founded in 2015 and currently offers retail and commercial digital banking services. The company received its banking license in 2019 and on the retail side offers personal checking accounts with debit cards, youth accounts, in-app PFM tools, a BNPL tool that can be retroactively applied to purchases already made, as well as an investing platform that allows users to invest in stocks, ETFs, and crypto. On the commercial side, Lunar offers business bank accounts, automated bookkeeping, cash flow analytics, expense management tools, loans, insurance, and more.
“Securing €50.9 million in such a challenging market reflects strong confidence in our growth strategies,” said Lunar Founder and CEO Ken Villum Klausen. “We’re seeing robust growth in our newly launched business area Banking Services, where we’re extending our in-house developed Nordic infrastructure to external partners.”
Lunar plans to use today’s funds to expand on its basic package offered to Swedish residents to become a more full-service bank. The company’s banking services are currently available to users in Denmark, Norway, and Sweden.
Approaching its 10th year of operation, Lunar reached 850,000 customers in 2023– including 20,000 business users. This total user number marks an increase from 700,000 customers in 2022. Concurrently, customer activity, as measured by transactions, nearly doubled during this period.
“Our journey doesn’t stop here, “Villum Klausen added. “We’re not just broadening Lunar’s basic banking services, but we’re also evolving into a full-service bank. Our aim is to cater to both private customers and businesses in Sweden, demonstrating our commitment to growth and our vision for the future.”
Upstart launched a new capability, Recognized Customer Personalization (RCP), that allows banks to present customized loan offers to their clients searching for a loan on Upstart.com.
Banks can tailor the offer to each prospective borrower based on their risk tolerance, return target, preferred loan size and terms, and geographic focus.
Currently, more than 20 lenders within Upstart’s network are already using the new tool.
Lending marketplace Upstart recently unveiled a feature it calls Recognized Customer Personalization (RCP). This new personalization tool enables banks using Upstart’s Referral Network to present a customized loan offer to their customers who use Upstart.com to look for a loan.
The new capability offers lenders on the Upstart Referral Network insight into which of their customers are in the market for a loan and enables banks to send an immediate and automated branded credit offer to the customer. Banks can tailor the offer to each prospective borrower based on their risk tolerance, return target, preferred loan size and terms, and geographic focus. RCP also allows lenders to use their own, in-house underwriting model, or leverage Upstart’s AI-enabled credit decisioning tool.
“In the current economic environment, lenders are laser focused on retaining their customers and increasing the lifetime value of those relationships,” said Michael Lock, SVP of Lending Partnerships, Upstart. “RCP enables them to reach their existing customers in a new way, provide more value, and build loyalty.”
RCP is currently available for personal loans and Upstart plans to expand the program to auto loans and home equity lines of credit in the future. Currently, more than 20 lenders within Upstart’s network are already using RCP.
Charles Eads, Chief Lending Officer of one such lender, Abound Credit Union, noted RCP’s potential to help the credit union serve members outside of its typical geographic boundary. “RCP will enable us to retain and better serve our existing members,” said Eads. “This innovative program will allow us to continue to meet the financial needs of our members in the communities we serve, as well as those members who have moved outside of the area.”
California-based Upstart was founded in 2012 to leverage AI and machine learning to price credit and automate the borrowing process. The company closed its IPO in 2020 and is currently traded on the NASDAQ under the ticker UPST with a market capitalization of $2.02 billion.
This week brings May Day, a day to celebrate the halfway point between spring and summer, and in the world of fintech, there are also exciting developments to mark the start of a new month. Check back for real-time updates on how the fintech landscape evolves this week.
UniWyo Credit Union tapsJack Henry to help with merger with Reliant Federal Credit Union.
Digital Banking
Core banking platform provider Finxact and SaaS core modernization and transformation solution provider for banks Zafinannounced a new collaboration.
Expense Management
Financial management superapp for expenses and corporate cards Expensifyunveils its New Expensify platform geared toward the global self-employed market.
Payments
Fintech infrastructure solution for branded customer wallets, Ansa, secures $14 million in Series A funding.
TreviPayunveils new self-financing option and enhanced payment application features for B2B net terms program.
Stripedecouples payments from the rest of its products stack.
Till Financialpartners with EF Educational Tours and EF Explore America to facilitate cashless payments for traveling students.
Anti-fraud and financial crime software company Feedzaiintroduces new Chief Financial Officer David Larson.
Featurespacejoins The Knoble, an alliance of financial service professionals, law enforcement, regulators, and NGOs committed to fighting financial crime.
Paystand is acquiring Teampay. Financial terms of the agreement were not disclosed.
Following the acquisition, Paystand will serve more than one million business customers.
Teampay will continue to serve its existing customers under the same brand, and things will be business as usual “in the near term.”
Cloud-based billing and payment platform Paystandannounced this week it has agreed to acquire expense management platform Teampay. Financial terms of the agreement were not disclosed.
The strategic move marks the California-based company’s second acquisition. Paystand purchased procurement platform Yaydoo in 2022. Now, the company services more than one million companies.
Teampay was founded in 2016 to offer spend management, accounts payable automation, purchasing assistant, spend approval tools, accounting automation, and more to help small-to-mid-market businesses and enterprises automate their spending without sacrificing control.
Paystand, which leverages the blockchain and cloud technology to digitize and automate businesses’ cash lifecycle, will use Teampay to scale its services. “With the fusion of Paystand and Teampay we significantly expanded our network, which now touches over one million businesses,” Paystand said in a blog post announcement.
Logistically, Teampay will continue to serve its existing customers under the same brand, and things will be business as usual “in the near term.” The companies did not specify whether Paystand planned to dissolve the Teampay brand and bring the customers under its own platform.
Paystand was founded in 2013 to help businesses digitize receivables, automate processing, reduce time-to-cash, eliminate transaction fees, and enable new revenue. In addition to its B2B payments and billing capabilities, the company also helps businesses leverage the blockchain to securely record their payment history by certifying and notarizing payments on the blockchain. Paystand has raised a total of $98 million. Jeremy Almond is Co-Founder and CEO.
Salesforce launched two new capabilities within its Einstein 1 platform, Transaction Dispute Management and Einstein Copilot Banking Actions.
Transaction Dispute Management helps service agents streamline dispute management, while Einstein Copilot Banking Actions serves as a chatbot and AI assistant for bank service agents.
Salesforce launched Einstein 1 in 2023 to enable customers to infuse AI, automation, and analytics into customer experiences.
Salesforce announced today it has launched new capabilities to help banks resolve transaction disputes. The new, AI-powered tools streamline the entire dispute process to resolve customer inquiries and requests more efficiently.
The new tools include Transaction Dispute Management and Einstein Copilot Banking Actions. These capabilities are available within one of Salesforce’s tool suites, Einstein 1, which the company launched in 2023 to enable customers to infuse AI, automation, and analytics into customer experiences. The two transaction dispute resolution tools help banks combine consumer transaction data with customer data from Salesforce to automate manual tasks, reduce errors, resolve issues, and improve customer communications.
The Transaction Dispute Management tool is an AI-powered solution that helps service agents at banks streamline dispute management. Like many dispute management tools on the market, Salesforce’s offering works for the entire dispute process– from the time a dispute is submitted until it is resolved. The tool helps banks maintain communication channels with customers, card networks, merchants, and issuing banks. One of Salesforce’s differentiating factors with the tool, however, is that it allows bank agents to use prebuilt email prompt templates and generative AI to draft personalized customer emails related to dispute activity within their workflow. Transaction Dispute Management also integrates with card networks to provide connected workflows, simplifying coordination with merchants.
The second capability Salesforce launched within Einstein 1 today, Einstein Copilot Banking Actions, is a chatbot and AI assistant for bank service agents. The tool helps agents ask questions and receive relevant responses based in metadata, then automate tasks within their workflow. For example, an agent can ask Einstein Copilot to trigger a fee reversal request for a disputed transaction, issue a provisional credit, or pull a list of recent customer transactions. Because all actions run within the Einstein Trust Layer, they do not compromise data security or privacy standards.
“The current process for managing transaction disputes is complex and cumbersome, leading to decreased productivity for bank service agents,” said Salesforce SVP & GM for Financial Services Eran Agrios. “These new capabilities simplify and streamline the entire transaction dispute cycle, enabling banks to deliver exceptional customer experiences and drive innovation across their business.”
Salesforce was founded in 1999, and in the company’s 25 years of operations, it has expanded well beyond a simple CRM solution. The California-based company currently provides a host of sales and marketing tools, digital storefronts and commerce solutions, data analytics and visualization offerings, collaboration software, and more.
Finovate is best known for showcasing seven-minute fintech demos, and for this year’s FinovateSpring event (taking place May 21 through 23 in San Francisco), we have a lineup of fresh faces. Of the 40+ companies that will showcase their new technology during the conference, 33 companies have never set foot on the demo stage before.
That’s 33 companies that are new to us– and may very likely be new to you, too. Here’s an overview of the new-to-Finovate demo companies currently on the roster:
APIMatic APIMatic helps banks and fintechs generate ROI from their API investments via automation and AI solutions. The company is headquartered in Auckland, New Zealand and was founded in 2014.
Ascent Platform Ascent streamlines multiple new product experiences with less cost, less disruption, and less risk. The company simplifies and speeds integration of new point-of-sale experiences into a financial institution’s infrastructure, future-proofs the organization to launch new products and adopt the latest and greatest approach, collects and reuses customer data across all product lines in real-time, reduces due diligence and vendor management overhead, and provides greater control and security over point-of-sale data.
BaaSFlow With BaaSFlow, users can achieve higher growth and better consumer experiences at a fraction of the cost of a legacy core, which is often not performant, flexible, or modern enough to scale in the digital age.
Blee Blee helps organizations move to market quicker while increasing revenue and minimizing compliance risk. The company is headquartered in New York and was founded in 2022.
Bloom Credit Bloom Credit helps banks and credit unions offer a deposit retention and credit building tool to their client base. The company is headquartered in New York, NY and was founded in 2016.
Borealis Global Analytics Borealis Global Analytics’ virtual portfolio manager platform, powered by generative AI, aims to boost global equity portfolio returns by cutting costs associated with global equity data and research and increasing the efficiency of portfolio managers.
Candour Oy Candour Oy provides secure, quick identity verification that improves reliability and consumer convenience for financial institutions. The company is headquartered in Oulu, Finland and was founded in 2020.
Cardlay Payment Systems Cardlay Payment Solutions helps organizations with the growth and retention of their existing portfolios. The company is headquartered in Odense, Denmark and was founded in 2020.
Deeployalty Deeployalty assists banks in creating new value for customers and acquiring new data that will help create offers to increase transaction activity. Merchants gain the ability to stop printing paper receipts and receive a tool to attract new customers through bank partners already connected to Deeployalty.
DYNATREK DYNATREK looks to improve the timing and pricing of proposals, such as loans for customers, and enhance the administrative workflows centered on spreadsheets. The company is headquartered in Tokyo, Japan and was founded in 1999.
Endaoment Endaoment enables nonprofit organizations to facilitate crypto and stock donations without having to accept the asset directly. The company’s platform modernizes donation practices, connecting organizations with new funding sources and a new, diverse donor base.
Eqvista Eqvista’s cap table management tools enable companies, large and small, to optimize equity management and share values.
Foresight Foresight helps organizations find the right private company to do business with, research everything about them, and learn how they can impact a portfolio once they are involved with it.
Hapax Hapax uses technology to bridge the information access gaps between big banks and smaller banks. The company offers smaller FIs ubiquitous and immediate access to accurate and validated information to help them mitigate risk and stay compliant.
Instarails With Instarails, organizations and banks can offer instant, inexpensive, and inclusive payments that will increase revenue, generate growth, and provide entry into new markets.
LiquidTrust LiquidTrust helps banks and credit unions offer their business customers an improved customer experience (digital, self-serve), and helps them reduce the risk for buyers and sellers, grow their SMB customer-base, grow non-interest bearing deposits, and generate additional revenue (e.g. transaction and lending).
Lloyd Tevis Investments Lloyd Tevis Investments offers a smarter way to invest and a more intuitive, higher value-add way to engage with clients. The company is headquartered in Lafayette, CA and was founded in 2015.
Method Financial Method Financial’s platform helps financial institutions, fintechs, and lending institutions access liabilities held at over 15,000 institutions in the U.S., through real-time data and payment access for consumer liabilities by simply using a consumer’s PII, with no authentication required.
Modernbanc Modernbanc’s reconciliation software allows finance teams to leverage the power of AI and no-code automation to build complex reconciliation without the need for developers. This allows companies to increase leverage per employee, scale their finance and payments function, and increase profitability, without increasing their total headcount.
Nav.it Nav.it aids organizations in transforming and growing their businesses by enhancing employee financial wellness, leading to increased productivity and engagement. Its data-driven insights inform strategic decision-making, while its focus on financial health contributes to a positive organizational reputation and a culture of financial mindfulness. By integrating seamlessly with existing HR systems, Nav.it offers a scalable solution to improve overall workplace efficiency and employee satisfaction.
Parlay Protocol Parlay Protocol’s product can increase the chances that a loan applicant will gain access to small business funding while helping banks convert new customers and attract new borrowers.
PayToMe.co PayToMe.co automates and optimizes financial tasks like invoicing, payments, and compliance, allowing businesses to focus on strategic initiatives and growth. The company’s platform can be tailored to meet the specific needs of businesses at various stages of growth, ensuring they can scale effectively and efficiently. PayToMe.co ensures that businesses can offer seamless financial interactions, increasing customer satisfaction and loyalty.
Remynt Remynt can help creditors achieve higher recoveries and recapture defaulted consumers as customers when their financial position improves. The company is headquartered in San Francisco, CA and was founded in 2022.
Revelata Revelata helps analysts at investment banks, asset managers, hedge funds, PE firms and beyond, become bionic at research and analysis by using AI to automate away the grunt work of surfacing structured data from unstructured sources.
Safari SOP Safari’s built-in risk and compliance tools provide a single, auditable process to monitor served documents throughout their lifecycle. The company is headquartered in Bellevue, WA and was founded in 2019.
ScribeUp ScribeUp is a subscription management solution directly behind consumer cards and banking products that offers streamlined controls over recurring bills for users and strategic and financial value for financial institutions.
Sherpas Sherpas brings AI to the core of financial services processes to deliver efficiency and improve the quality of advice that advisors give their clients, which makes it a stickier relationship and allows advisors to charge for expanded scope of advice. Sherpas helps advisors keep clients informed and engaged in a way that still feels like a high-touch relationship, reducing the need for 1-1 meetings.
Stock Unlock Stock Unlock offers an investment software platform helps retail investors make more informed decisions in the stock market. The company is headquartered in New York, NY and was founded in 2021.
Streetbeat Streetbeat aims to deliver more information, more clarity, and more confidence to investors by leveraging AI and offering personalized investment strategies designed to align with each investor’s unique goals and risk tolerance.
Tennis Finance Tennis Finance augments the work of compliance analysts and teams. The company helps banks understand issues in their products to increase customer satisfaction, which leads to higher deposits and new customers.
Tradery Labs Tradery Labs empowers organizations to transform and grow their businesses by offering a scalable, no-code, AI-driven trading platform that democratizes advanced algorithmic trading tools.
Trice The Trice platform offers off-core infrastructure and payments orchestration for real-time account to account (A2A) transfers, powered by Real-Time Payments (RTP). The technology enables direct connectivity for banks, fintechs, digital wallets, investing apps, lenders, credit unions, and payment providers to quickly deploy money movement experiences.
Winnow Winnow is an automated compliance change management platform that empowers organizations to build accurate state and federal law surveys. The company is headquartered in Anaheim, CA and is founded in 2018.
We’re still placing the final touches on the FinovateSpring agenda, but this year’s show is shaping up to be full of the most relevant and impactful conversations you’ll have all year. If you don’t have your ticket yet, there’ still time to register.
ComplyAdvantage announced plans to acquire knowledge engine builder Golden Recursion for an undisclosed amount.
ComplyAdvantage will implement Golden’s data extraction and disambiguation methods to help financial institutions minimize their risk of financial crime.
The deal will also increase ComplyAdvantage’s footprint in the U.S. and will make Andreessen Horowitz (a16z) a top shareholder of ComplyAdvantage.
Fraud and AML risk detection platform ComplyAdvantageannounced it has agreed to acquire knowledge engine builder Golden Recursion. Financial terms of the deal were not disclosed.
Founded in 2017, Golden is developing a self-constructing knowledge database used to accelerate discovery and education. The San Francisco-based company combines human effort and machine intelligence to simplify the process of gathering and communicating knowledge. As a result, Golden has created one of the world’s largest knowledge graphs, a diagram that facilitates information analysis by displaying interconnected data points and their relationships.
“By combining our experienced team of AI and large language model (LLM) specialists with ComplyAdvantage’s industry-leading data science team, we are creating a global team of data experts,” said Golden Founder and CEO Jude Gomila. “Together, I’m confident we will transform financial crime risk management for businesses worldwide.” Gomila will join ComplyAdvantage as a board observer and special advisor.
Golden has raised almost $60 million, having Andreessen Horowitz (a16z) as one of its top contributors. As part of today’s deal, a16z will become a top ComplyAdvantage shareholder, joining Goldman Sachs, Index Ventures, and Balderton Capital.
“We are excited to welcome their talented team to the ComplyAdvantage family, alongside a16z, who bring powerful expertise as we embark on the next phase of our growth journey,” said ComplyAdvantage CEO Vatsa Narasimha.
U.K.-based ComplyAdvantage offers financial institutions a wide view of their vulnerability to financial crime. The company leverages AI and machine learning to sort through ComplyAdvantage’s database of entities, which is updated continuously to ensure accuracy. The company plans to implement Golden’s data extraction and disambiguation methods that use natural language processing to bring supplementary, disparate data sources into what ComplyAdvantage calls its “data ingestion layer.” These additional data points will offer ComplyAdvantage clients more comprehensive, real-time financial crime risk insights.
“Delivering AI-enriched financial crime insights to our customers through a best-in-class user experience built on the most interconnected data has been our north star at ComplyAdvantage since day one. The acquisition of Golden is a critical milestone on that journey,” saidNarasimha.
The acquisition will also help ComplyAdvantage expand its footprint in North America, specifically in the U.S. With its five offices based in New York, London, Singapore, Cluj-Napoca, and Lisbon, the company currently serves more than 1,000 organizations in 75 countries.
Betterment has agreed to acquire Goldman Sachs’ Marcus Invest.
The deal does not apply to Marcus Deposits and does not cover any of Marcus’ technology, employees, or operations.
Financial terms of the deal, as well as the number and value of Marcus Invest accounts, were undisclosed.
Automated investing service Betterment signed a deal with Goldman Sachs to acquire the digital investing accounts at Marcus Invest. Marcus Invest, which offers digitally customized investment portfolios to consumers, will transfer these accounts to Betterment in the coming months. Financial terms of the deal were undisclosed.
The acquisition does not apply to Marcus Deposits, Goldman Sachs’ neobank that currently serves over three million customers globally and has more than $100 billion in consumer deposits. Goldman Sachs plans to maintain possession of and continue to focus on growing Marcus Deposits. The deal also does not cover any of Marcus’ technology, employees, or operations. Betterment will only acquire Marcus Invest accounts and assets under management.
“As we increase our focus on our growing Marcus Deposits platform, we made the decision to transition away from our digital investment advisor offering and wanted to find a great home for those customers,” said Goldman Sachs Marcus Global Head Marcos Rosenberg. “Betterment was the obvious choice for those accounts as we share a deep commitment to customer satisfaction. We look forward to continuing to serve our Marcus Deposits customers with great products and a great experience.”
The number of Marcus Invest accounts, as well as the funds under management that will be added to Betterment are undisclosed. The clients will join Betterment’s more than 850,000 customers who hold more than $45 billion in assets in the Betterment platform.
Betterment was founded in 2008 to combine technology with personalized support to create a roboadvisor that suits a range of customer preferences. The company provides diversified portfolios, tax-smart tools, a range of account types, planning tools, educational resources, and human advisors. Betterment also offers services that compete with Marcus Deposits, including a high yield cash account, checking account, and debit card.
Under the deal, which is subject to customary closing conditions, Marcus Invest customer accounts will be transitioned to Betterment “on or about” June 29, 2024 unless they opt out of the transfer.
“This acquisition further cements our leadership in the digital investing space,” said Betterment CEO Sarah Levy. “We are excited to welcome these customers to Betterment where our scalable technology platform will continue to support them on their investing journeys.”
