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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
MoneyGram, a pre-digital P2P payments player, announced a collaboration this week that will send funds faster and offer consumers more options.
The Texas-based money transfer company is partnering with Stellar Development Foundation, a non-profit that supports the development and growth of the Stellar blockchain network, and Circle, an online platform that enables users to send money. The partnerships will enable consumers using Circle’s USDC stablecoin to receive cash funding and payout in local currency, and will facilitate near-instant backend settlement.
As Stellar Development Foundation CEO Denelle Dixon explained, the partnership combines the reach of MoneyGram’s services with the speed and low cost of transactions on Stellar. As a result, “a new segment of cash users will be able to convert their cash into and out of USDC, giving them access to fast and affordable digital asset services that may have previously been out of reach,” Dixon said.
Once the partnership goes live, end consumers will be able to use MoneyGram to convert USDC to cash, or cash to USDC. United Texas Bank will serve as a settlement bank between Circle and MoneyGram. Thanks to Circle’s USDC, consumers will also see their funds settle in near-real-time, resulting in accelerated money movement, improved efficiency, and reduced risk.
“At MoneyGram, one of our top strategic priorities is to pioneer cross-border payment innovation and blockchain-enabled settlement, and we’re thrilled to now work with the Stellar Development Foundation to further our efforts,” said MoneyGram Chairman and CEO Alex Holmes. “As crypto and digital currencies rise in prominence, we’re especially optimistic about the potential of stablecoins as a method to streamline cross-border payments. Given our expertise in global payments, blockchain, and compliance, we are extremely well-positioned to continue to be the leader in building bridges to connect digital currencies with local fiat currencies.”
This isn’t the first time we’ve seen MoneyGram using blockchain technology. The money transfer giant partnered with Ripple in 2019 to leverage XRP for cross-border payment and foreign exchange settlement. That partnership has since ended, but MoneyGram has gone on to initiate other partnerships that provide broad consumer access to digital currencies.
U.K. bank NatWestacquired children’s allowance-tracking app RoosterMoney this week. Financial terms of the deal are undisclosed.
NatWest plans to integrate RoosterMoney’s Star Chart, Virtual Money Tracker, and Chore Manager into its own offerings in order to provide tools for families and children to learn to manage their allowance money and other funds.
“We want NatWest to be the easiest and most useful bank for families and young people,” said Head of Youth, Retail Banking at NatWest Group Simon Watson. “We know that the world of money is changing, and we want to help parents, carers, and young people feel confident and capable – Rooster helps us do just that.”
Rooster was founded in 2016 and helps its 130,000 U.K. users to learn the basics about money– earning, spending, saving, and giving. In addition to a digital chore chart, RoosterMoney offers a debit card that pairs with the app to offer parental control such as turning the card on and off, blocking certain merchants, and real-time spending notifications.
“At RoosterMoney we believe that if you build financial capability early on, you’re better prepared to take on the challenges that life throws at you,” said RoosterMoney CEO Will Carmichael. “That’s totally aligned with the bank’s purpose and we’re very excited about working together to help more parents and kids to build their financial confidence.”
NatWet said that it will allow RoosterMoney’s existing customers to continue to use the app as usual.
This isn’t NatWest’s first entrance into the youth banking products market. The bank has offered its MoneySense financial education program, that targets kids ages five to 18, for 25 years. Additionally, NatWest recently launched HouseMate, a bill-splitting app for renters, and Island Saver, a game to help young customers learn about money management.
Non-fungible tokens, better known as NFTs, have been making their way into mainstream culture this year. From “breeding” digital kitties to collecting NBA trading cards, the possibilities of buying and selling digital media are endless.
If you’re NFT-curious, one of the best ways to discover more is to create or purchase your very own NFT. If you already have a crypto wallet, it is fairly simple. Create your own by uploading a photo to OpenSea or check out the OpenSea marketplace to browse media. It only took me around five minutes to create my first NFT:
As a quick-fire way to help you sort the ins and outs of NFT trading, here’s a quick list of seven things you need to know about the NFT craze.
1. NFTs are not just for fintech nerds
The fact that NFTs leverage the Ethereum blockchain doesn’t scare off creators nor buyers. Multiple marketplaces, including the aforementioned OpenSea, Binance, and Rarible make it very simple to upload, buy, and sell NFTs. As Time reports, teenagers as young as 15 are already making millions of dollars by creating, buying, and selling NFTs.
2. NFTs are good for creators
Instead of sacrificing commissions to art houses, publishing companies, and other middlemen, creators can keep the majority of the purchase price for their work. OpenSea, for example, charges only a 2.5% fee. Additionally, some NFTs enable the artist to receive a royalty payment each time the NFT is sold or changes hands.
3. NFTs benefit buyers
The value of buying and owning NFTs is a bit less clear than the value for creators. Aside from exercising bragging rights, NFT owners can use the NFT as a speculative tool by buying and selling NFTs, or they could use their purchase as a way to more directly follow and support artists.
4. Anyone can create an NFT
As long as a user has a crypto wallet and is able to upload media, they can create their own NFT. My NFT is proof of this– while I am certainly not an artist (I failed art in the fifth grade), I was able to upload a photo I already had to quickly create my own.
5. NFTs are one-of-a-kind
As the name suggests, NFTs are non-fungible, meaning they cannot be exchanged with assets of the same type. In other words, unlike currency which can generally be exchanged one-for-one (I can pay you a dollar for your dollar), each NFT is completely unique.
6. Yes, NFTs can be copied or downloaded
Because NFTs are digital media, they can easily be reproduced. Anyone can take a screenshot of an original NFT or download a copy of a video. The value, however, is in owning the original NFT. As an example, there are many copies of Van Gogh’s Starry Night, but none are as valuable as the original.
7. NFTs can potentially bridge the digital/ physical divide
While NFTs are restricted to digital assets, it is possible to use NFTs as a type of verification method for the purchase of an original, physical item. For example, Nike has patented a way for sneaker collectors to track ownership and verify the authenticity of sneakers.
Holvi began a new chapter earlier this year after company founder Tuomas Toivonen purchased the startup back from BBVA in February.
Holvi, which provides banking tools for self-employed entreprenuers, was founded in 2011 and debuted on the Finovate stage in 2012. In 2018 the company sold to BBVA, which later launched Holvi’s banking services in the U.K. Nine months after the U.K. launch, the Spanish bank decided to pull out of the region, citing concerns over Brexit.
Sifted reported this week that after Toivonen purchased Holvi from BBVA earlier this year, the startup lost 60% of its customers and saw its staff drop by 50% from 150 employees to just 75. Now, it is more profitable than ever. The company increased monthly revenues by 40% by charging a monthly fee of $7 to $14 for an account.
The reason for the recent success hinges on Holvi’s newfound dexterity as a smaller company. As Toivonen told Sifted, “When you’re an independent company, you of course have more flexibility. And when you’re team-owned and run there is no inertia in decision making. You can make big decisions fast.”
What will those “big decisions” look like in Holvi’s future?
The company tells Sifted it plans to launch a credit card offering to complement its current debit card product. Holvi also disclosed it will launch a receivables financing tool to help entrepreneurs smooth out cash flow when they receive invoice payments late.
Holvi, which was founded in Helsinki, Finland and operates in Germany, Finland, and Austria, doesn’t plan to enter new geographies at the moment. The company may, however, consider re-entry into the U.K. market.
The renewed focus will likely prove successful for Holvi. When the company first launched in 2011, neobanking was a relatively new concept, especially in the commercial banking space. In today’s environment, however, digital neobanks are commonplace. Not only are consumers accustomed to opening a new bank account with a digital-only bank, regulators are also more comfortable with how they operate.
Southeast Asia’s super app Grab is moving even further into the payment solutions space this week. The company has more than doubled its stake in e-wallet app OVO.
Grab’s stake in Bumi Cakrawala Perkasa, OVO’s parent company, has gone from 39% to 90%. Currently, the remaining 10% of OVO is split equally between two firms, IDE Teknologi Indonesia and Cakra Finansindo Investama, which both claim a 5% stake.
“We are pleased to complete the first part of a wider exercise to restructure our ownership. We welcome a greater commitment from Grab,” said an OVO spokesperson. “We’re working in close consultation with the regulators to complete the ownership restructuring process, and are confident this will allow us to better serve the financial services needs of Indonesians.”
OVO was launched as a corporate rewards system for Lippo Group and in 2017 expanded to e-payments. According to data released last year from Bank Indonesia, OVO processed 37% of all digital wallet transactions in Indonesia, marking the largest share in the nation.
According to Nikkei Asia, Grab will likely bring more Indonesia-based investors to acquire stakes in OVO. That is because the region’s central bank, Bank Indonesia, stipulates that at least 15% of e-payment operators needs to be locally owned. Nikkei Asia cited local media conglomerate Elang Mahkota Teknologi as a potential candidate for the purchase.
To date, Grab has acquired three companies, including B2B2C wealthtech provider Bento, mobile payments solutions provider iKaaz, and ecommerce solutions company Kudo.
After launching as a ride-hailing company, Grab has expanded to offer a wide variety of products and services (hence its classification as a super app). The Southeast Asia-based company now serves consumers, merchants, and drivers with deliveries, financial services, a hotel-booking tool, payment processing and rewards, business financing, and more.
Two Canadian fintechs have struck a deal this week. Payments network and digital ID provider Interac has agreed to acquire rights to digital ID and authentication provider SecureKey’s digital ID services for Canada.
Interac, which is building a network to help Canadians digitally share and verify their identity credentials, will leverage SecureKey’s digital ID services, along with its operations, technology, and innovation. Ultimately, Interac seeks to accelerate secure online service delivery and offer strong privacy and fraud protections for the digital economy in Canada.
“At Interac, we believe that digital ID is the key to empowering all Canadians to participate equally and safely in the future of the digital economy,” said Interac CEO Mark O’Connell. “Through this acquisition, we are proud to increase our investment in leading identification and authentication capabilities as we work to support businesses and governments across Canada in delivering secure and convenient digital ID experiences for Canadians.”
Both companies will continue to operate as separate entities. Interac will implement Verified.Me, a digital ID verification network built on distributed ledger technology, and Government Sign-In by Verified.Me, a secure sign-in tool to access 280+ government services.
“As the pandemic has made abundantly clear, the way Canadians use their identity documents and how they prioritize accessing services digitally has changed forever,” said Chief Officer of Innovation Labs & New Ventures at Interac Debbie Gamble. “The need to accelerate innovation to provide secure and convenient options for people to transact with their identities is critical.”
This announcement follows Interac’s acquisition of Ottawa-based 2Keys, a company focused on creating secure digital experiences, in 2019.
Founded in 2008, SecureKey has made a couple of key partnerships recently. The company partnered with Onfido in March of 2020 to offer real-time photo ID verification and teamed up with Simplii Financial in May of 2020 to offer Simplii clients with secure access to government services.
After finalizing the deal with special purpose acquisition company (SPAC) Fusion Acquisition Corp. this week, MoneyLion is now publicly traded on the New York Stock Exchange under the ticker symbol ML.
For additional insight into this milestone, we spoke with MoneyLion CEO and Co-Founder Dee Choubey. Prior to co-founding MoneyLion in 2013, Choubey spent over a decade on Wall Street inside the largest banks learning about the inefficiencies that exist within banking. He built MoneyLion to create a private banking experience for everyday Americans by offering credit, banking, and investing in a single app.
Talk to us about MoneyLion’s journey so far. What has growth been like since the company was founded in 2013?
Dee Choubey: We founded MoneyLion with the goal of rewiring the consumer finance system, giving hardworking Americans access to previously exclusive private banking services. At MoneyLion, we bring consumer finance into the future by combining AI, machine-learning technology, and behavioral science to create a full-service, digital financial platform for our users. Since 2013, we have engaged with over 8.5 million Americans, empowering them with a digital banking platform that helps them better manage their finances today and build wealth for tomorrow.
This has been a historic year for the company. Since announcing we were going public via a SPAC in February, to listing on the NYSE on September 23rd, we’ve continued to see consistent growth and a validation of our business plan. Entering the public markets will enable us to scale our capabilities and reach even more hardworking Americans. Since the start of 2021, we’re up across all key financial and operating metrics, including 100%+ year over year growth in net revenue. Our user growth has also accelerated this year, with total customers increasing almost 60% in the first half of 2021 to 2.3 million.
Earlier this month, we raised our annual revenue guidance for fiscal years 2021, 2022, and 2023 to reflect higher projected user growth, along with expected revenue contribution of planned product launches including our new crypto and Buy Now Pay Later offerings. As a public company, we will remain laser focused on positioning ourselves for optimal execution on our well-defined growth objectives.
How did you know that a SPAC was right for MoneyLion?
Choubey: For us, we’d spent the last eight years focusing on building proprietary technology. As we saw the product market fit of MoneyLion accelerating, we knew it was time to take MoneyLion’s innovative products to more Americans, and a SPAC provided us with an entry point to enhance our public presence as well as capitalize the business. As with everything we do at MoneyLion, it ties back to our mission: to provide top-notch financial access and bespoke advice to every hardworking American.
Listing via a SPAC was the best option for us due to its efficiency in allowing us to strengthen our balance sheet. With the capital we raised through this transaction, we are now able to accelerate the execution of our growth strategy, deliver against our mission, and provide incredible value to our customers and members.
What has been the hardest part of the SPAC process?
Choubey: If anything, our biggest challenge was timing. We announced the merger with Fusion Acquisition Corp in late February, expecting to be public somewhere in June or July. It took longer than anticipated to get through the whole process, in part due to the number of deals coming to the market.
With the merger behind us and our balance sheet fortified, we’re all very excited about this next chapter in the MoneyLion journey. For the past eight years we have been focused on building our proprietary tech stack, and we think we have one of the best platforms, not only here in the United States, but globally. We’re poised to build on that strong foundation and make MoneyLion a daily destination for all hard working Americans, combining our robust financial products and services with highly personalized content and advice to help our customers take control of their finances and achieve their life goals.
What advice would you offer other fintechs considering the SPAC route?
Choubey: Find the right partner with whom to go public. And that usually entails the sponsor’s knowledge of its investor base, their willingness to do whatever it takes to accurately position the company, as well as a specific understanding of the capital markets including the pipe market. At the end of the day, the fintech needs to have public market fit and a good sponsor can help create an efficient framework.
Will anything about MoneyLion change now that the acquisition is finalized?
Choubey: We’re no longer trading under FUSE; we’ve officially taken over the ML ticker on the New York Stock Exchange. For those that remember, ML was Merrill Lynch’s ticker, an iconic American financial institution. Today, we are immensely proud to have that ticker as we grow into our own iconic American brand. As we like to say, the ‘bull has become the lion’.
In terms of what’s happening within MoneyLion, we are going to continue to work hard and deliver against our mission: harnessing the power of technology to empower millions of hardworking Americans to take control of their finances so that they can achieve their life goals.
Wealthtech company Betterment has boosted its total funding to $435 million after closing $160 million in growth capital this week. The funds include $60 million in Series F equity and a $100 million credit facility.
The new round values Betterment at $1.3 billion. The equity portion was led by Treasury with participation from existing investors Kinnevik, Bessemer Venture Partners, Francisco Partners, Menlo Ventures, Anthemis Group, Globespan Capital Partners, Citi Ventures, and The Private Shares Fund. New investors Aflac Ventures and ID8 Investments also participated.
The $100 million credit facility comes from ORIX Corporation USA’s Growth Capital group and Runway Growth Capital.
“We are thrilled to have the support of new and existing investors who believe in our business model and are excited by the opportunity to support our growth,” said Betterment CEO Sarah Levy. “We’re using these funds to further cement our category leadership with rapid innovation on top of our already differentiated product suite and unique, multi-pronged distribution model that serves retail investors, advisors and small businesses.”
More specifically, Betterment will use the funds to support its 401(k) offering for small and medium sized businesses.
Founded in 2010, Betterment manages $32 billion in assets for its nearly 700,000 clients. In addition to offering automated 401(k) and IRA options, the company also provides socially responsible investment options, retirement planning services, a checking account, and a high-yield savings account.
Today’s announcement comes after a flurry of news activity for Betterment, after the company appointed Levy as CEO in December of last year. In March, the company acquired the investment advisory business of WealthSimple, partnered with Zenefits to offer 401(k) plans on the Zenefits platform, rolled out a checking account for shared finances, unveiled a co-pilot tool for advisors, and launched pre-packaged tech stack for RIAs.
U.K. digital bank Starlingannounced plans to expand its banking-as-a-service (BaaS) solution.
Starling launched its BaaS offering, Starling as a Service, in the U.K. in 2018. The company currently has 25 BaaS customers, including Raisin, CurrencyCloud, Moneybox, and Vitesse.
Starling as a Service will expand to the European Union in the first half of this year. Specifically, Starling aims to bring the service to companies in France, Germany, The Netherlands, and Spain.
The BaaS offering will enable businesses to build their own embedded financial products. While the business client offers the financial product to its end customers, Starling handles all technical and regulatory details involved.
Starling CEO Anne Boden described the European markets as a “great fit” for Starling due to the region’s “thriving” fintech scene. “We have seen a consistent and growing demand for digital financial services, further accelerated by extended lockdowns and a shift in consumer behaviors in key European markets,” said Boden, “and it is clear that Starling can power new and exciting opportunities for businesses across Europe.”
Starling as a Service takes advantage of the embedded finance trend that has been building since last year. By leveraging third party fintech solutions, any business can itself become a fintech by offering financial services to its customers. In Starling’s case, Starling as a Service will enable businesses to provide savings and current accounts, digital wallets, data processing, and payment cards.
Today’s news comes after Starling scored $376 million in funding in March and acquired Fleet Mortgages in July of this year. Headquartered in London, and with offices in Southampton, Cardiff, and Dublin, Starling has amassed $922 million in funding since launching its digital bank in 2014.
The pandemic has not only shined a light on the inequalities of women in the workplace, it also created a larger gap, especially for working mothers. Between mandatory home schooling and a lack of childcare, the workload that women bear around the house is increasing.
There have been plenty of studies and articles stating that these demands are placed unfairly mothers, have made it difficult for them to advance in their career, and have caused many mothers to drop out of the workforce entirely.
I don’t want to minimize the headaches that moms (and truly everyone) have endured over the past 20 months. However, it’s worth pointing out a few ways that the pandemic economy has actually benefitted working mothers, specifically mothers working in fintech (myself included).
Flexible hours
The need for employees to balance work with home schooling and childcare motivated many workplaces to embrace more flexible working hours. As long as employees produce quality work, put in the necessary hours, and attend mandatory meetings, many are able to set their own schedule that works with their family.
Moms are always on call, whether to nurse a baby, help with homework, solve an argument, or change a diaper. So being able to step away from the computer to take care of pressing tasks is a huge benefit.
Remote working is the new norm
Prior to the pandemic, many workplaces were strictly against remote work, even when in-person collaboration wasn’t necessary. While commuting into an office five days a week has its benefits, it also comes with its share of difficulty. Not only does the extra time of the commute add up, but there is also more time and money spent on a professional wardrobe and makeup.
For breastfeeding mothers, long commutes are especially burdensome because the more time spent away from the baby means the more times mothers have to pump, store milk, and wash and sterilize bottles.
Meetings and conferences come to you
I included this point because of personal experience. My son was nine months old when I attended my first conference after maternity leave. Because I was still nursing, I chose to bring him with me to FinovateFall 2019 in New York. Even though I was physically at the conference, I still missed out on much of the content because I had to step out to nurse him so frequently.
In comparison, at FinovateFall 2021 last week, I was able to attend the show digitally from my home office with my newborn daughter on my lap. I was so much more present during the demos and discussions since I wasn’t running back and forth from the venue to a hotel room.
In this post-pandemic way of work, many businesses have made a point to offer digital experiences either in place of or alongside physical meetings. Now that so many more meetings and conferences offer a digital option, women do not have to miss out in the event they need to care for a sick family member or if they have a gap in childcare.
Normalizing home life
Perhaps the biggest upside of the pandemic is that it has shed a light on the full breadth of women’s duties outside of the workplace. Not only this, but colleagues are more accepting of times when family life collides with work. I’ve worked from home for 11 years, and prior to the pandemic I would have been mortified if my two-year old was audible outside of my office door on a conference call.
In this new era, colleagues and clients are much more open to home life. In fact, I’ve videoconferenced with people who not only don’t mind seeing and hearing children in the background of calls*, but they also ask me to bring them to the computer so that they can say hello to their children on the other end of the screen.
*At least within reason. Yes, children can be quite annoying sometimes.
Royal Bank of Canada (RBC) launched two new capabilities for its NOMI financial intelligence platform. Unveiled today, NOMI Forecast shows users their future cash flow. The app also has increased its security with the launch of two-step verification upon login.
“At a time when Canadians are more conscious than ever of their daily finances, and banking digitally more frequently, they expect solutions that help them confidently manage their money and safeguard their accounts and information,” said RBC SVP Digital Peter Tilton. “With NOMI Forecast, we’re giving clients next generation cash flow advice and insights to take the stress out of balancing their accounts. Equally important, 2-Step Verification will work to provide clients added peace of mind as they navigate this rapidly evolving digital banking landscape.”
NOMI Forecast works by showing users all of the pre-authorized payments they have coming over a seven-day period. By accounting for known upcoming expenses, the forecasting capability offers users better visibility of their account activity and helps them have more control over their finances.
With the two-step verification process, users can select their mobile device as the primary channel to access the account. If they attempt to login with another device, they receive an in-app notification to verify their session. Unlike two-factor authentication, there is no security code delivered via email or text. Instead, the user presses a button to continue their session.
In a press release, RBC said that the two new features demonstrate the bank’s “commitment to add value, enhance security, and create peace of mind” for clients.
Financial document automation platform Ocroluspulled in $80 million in Series C funding today. The round was led by Fin VC and included participation from Thomvest Ventures, Mubadala Capital, Oak HC/FT, FinTech Collective, QED Investors, Bullpen Capital, ValueStream Ventures, Laconia, RiverPark Ventures, Invicta Growth, Stage II Capital, and Cross River Bank.
The New York-based company now boasts $127 million in funding and is valued at over $500 million. Ocrolus plans to use the funds to expand U.S. operations and “more aggressively” build products for banking and mortgage lending.
“Our platform helps lenders automate underwriting and intelligently leverage cash flow and income data for credit scoring,” said Ocrolus Co-founder and CEO Sam Bobley. “By enabling lenders to more quickly analyze diverse sources of financial data, Ocrolus levels the playing field for every borrower, providing expanded access to credit at a lower cost.”
Ocrolus was founded in 2014 to create a document processing automation solution that helps lenders classify, capture, detect, and analyze financial documents to make better lending decisions. To accomplish this, the company leverages AI, machine learning, and human-in-the-loop (HITL) optimization. The HITL component serves as Ocrolus’ key ingredient to differentiation because it ensures an enhanced level of accuracy when analyzing data derived from documents.
The company, which won a Best of Show award at FinovateFall last week for its document analysis technology, has benefitted from the recent acceleration of digitization brought on by COVID. In today’s lending environment, FIs need to offer online options to compete. We spoke with Ocrolus’ VP of Solutions Nicole Newlin last year on the effects of this digitalization.
Ocrolus’ client list is as impressive as it is extensive, including firms such as Brex, Enova, Lending Club, PayPal, Plaid, and SoFi. Accommodating for a recent uptick in demand, the company added more than 75 employees this year and plans to boost its hiring efforts next year, focusing specifically on machine learning and data science professionals.
