Author: Julie Muhn (@julieschicktanz)

Cinco de México: 5 of the Region’s Top Fintechs

Cinco de México: 5 of the Region’s Top Fintechs
By Julie Muhn (@julieschicktanz) Posted on
Categories: List series

Mexico is known for a lot of things. The region is blessed with a rich food and drink culture, is home to historic Mayan temples, offers beautiful cenotes, and is lined with picturesque beaches.

Typically, Mexico is not associated with being a global fintech hot spot. However, the region is prime for growth. Half of Mexico’s residents are unbanked, more than half own smartphones, and 70% have internet access. These factors, combined with the country’s relatively young population (43% of people there are under the age of 25) make Mexico fertile ground for alternative banking services.

We took a look at Mexico’s 441+ fintech startups to bring you the top five (based on website visits):

Kueski

Founded in 2012, Kueski uses big data and analytics to approve and deliver loans in minutes. Headquartered in Guadalajara, Mexico, the online lender has delivered 3.3 million loans and raised $39 million in funding.

Kubo Financiero

Headquartered in Mexico City, Mexico, Kubo Financiero is a digital alternative lending platform that offers financial products including savings, personal loans, and term deposits. The company was founded in 2012 and is aimed at serving the country’s middle class.

Konfio

A digital banking and software tool provider, Konfio was founded in 2013 by David Arana and Francisco Padilla and is headquartered in Mexico City, Mexico.

Prestadero

Founded in 2012 and with $909 million in funding, Prestadero is Mexico’s most well-known P2P lending platform. The Mexico City, Mexico-based company offers competitive rates on both loans and investments, making it a popular alternative to traditional banking services.

Conekta

Leveraging AI, Conekta processes online and offline payments to enable financial institutions to identify fraudulent purchases by analyzing transaction behavior while encrypting and protecting financial information. The company is headquartered in Mexico City, Mexico and was founded in 2011.

Photo by Hugo Entrepreneur from Pexels

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Curve Taps Cardlytics to Power Rewards Program

Curve Taps Cardlytics to Power Rewards Program
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Cardlytics, Daily news

Loyalty and rewards may seem like dated technology. After all, the conversation around loyalty and rewards peaked in 2012 when merchant-funded rewards and in-statement offers were the hottest new customer acquisition bait.

Today’s banking environment that focuses on the customer is proving that the technology isn’t all hype, however. Almost a decade after the merchant-funded rewards conversation, there’s still activity going on in the loyalty and rewards space.

As proof, banking app and smart card Curve announced today it is partnering with purchase-based marketing intelligence firm Cardlytics, which will power Curve’s new rewards program. Dubbed Curve Rewards, the app will offer Curve users a range of rewards from Cardlytics’ brand partners, including Pret a Manger, JustEat, FatFace, Harvey Nichols, and Cult Beauty. Two of the merchants piloting Curve’s new program, Harvey Nichols and Cult Beauty, will offer 20% off and 5% off respectively.

Curve Rewards leverages Cardlytics’ purchase intelligence data and will help customers earn while they spend. This data-driven approach ensures that the rewards offered to the consumer are personalized to their spending habits.

“Today’s consumers want a reward scheme that is tailored to how they shop and why they shop,” said Cardlytics’ Head of Bank Partnerships Campbell Shaw. “We’re pleased to have built a reward scheme for Curve that does just that, putting customers back in the driving seat while building loyalty and engagement for Curve.”

The partnership is especially notable for Cardlytics. In the company’s thirteen year history, the partnership with Curve is its first digital-native brand. Up until this point, Cardlytics’ partnerships were primarily with traditional financial institutions, including Lloyds Banking Group, JP Morgan Chase, Wells Fargo, and Santander.

Photo by Artem Beliaikin from Pexels

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Dwolla’s Evolution from Direct-to-Consumer

Dwolla’s Evolution from Direct-to-Consumer
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni profile, Dwolla

Founded in 2008, Dwolla is one of the fintech originals. Because of its long-standing history in the fintech space, the Iowa-based company has been through a lot of changes as it evolves with banks, fintechs, and consumer demand.

Since its start, Dwolla has focused on offering an alternative to the traditionally slow ACH money transfer system. Initially, the company tackled this objective through a direct-to-consumer (DTC) product, which allowed individual users to sign up for Dwolla to make peer-to-peer money transfers and transact with the company’s merchant partners.

As part of its DTC solution, Dwolla even offered a cardless credit product called Instant. The tool would lend users up to $5,000 for one month, with no interest, in exchange for a $3 per month subscription fee.

As an evolution of its credit offering, the company partnered with Alliance Data to launch Dwolla Credit. The ecommerce point of sale product worked much like PayPal in that users would select a Pay with DWOLLA button at the point of sale to complete their purchase. Funds would transfer on Dwolla’s rails to enable merchants to receive the funds instantly in their Dwolla account.

Despite the company’s numerous innovations in the consumer space, Dwolla received the most traction from its bank-focused product, FiSync, a payments protocol for real-time money transfers. The success of this tool prompted the company to exit the consumer space in 2016 to focus on creating payment APIs.

Today, Dwolla’s API helps organizations integrate payments into their application to send, collect, and facilitate payments. Earlier this year the company doubled down on its roots in faster payments to deliver real time payments in collaboration with Cross River Bank. The new, instant payment option leverages the RTP Network to send money directly to a bank account in seconds.

In a post-COVID world in which consumers have been trained to conduct more of their daily transactions online, Dwolla’s real-time payments capability will play a key role. “The immediacy of real-time payments will fundamentally change how businesses operate,” said Dwolla CEO Brady Harris. “As electronic payments continue to grow in adoption, RTP is the perfect complement to our ACH and Push-to-Debit offerings.”

Dwolla, a three-time Finovate alum, most recently demoed at FinovateSpring 2015 where it debuted FiSync. The company has raised $51.4 million from investors including Union Square Ventures, High Alpha, and Foundry Group.

Photo by Egor Myznik on Unsplash

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Expensify Planning IPO

Expensify Planning IPO
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Expensify, IPO

In an era when SPACs are the hip new way to take a company public, corporate expense management technology company Expensify is taking the old fashioned route.

The San Francisco-based fintech announced this week it has submitted an S-1 document– a key step on the road to an initial public offering to the SEC. The S-1 was submitted confidentially. Since Expensify is considered an “emerging growth company,” the contents of the filing do not need to be made public until 21 days prior to the road show for the IPO.

Expensify, which reached profitability at the end of 2018, has not yet determined the size and price range for the proposed IPO.

Founded in 2008, Expensify launched with its flagship receipt-scanning app and a simple motto, “Expense reports that don’t suck!” Since then, the company has gone on to launch a corporate payment card, offer a COVID-friendly virtual travel assistant, and expand into billpay.

Expensify’s IPO is expected to commence after the completion of the SEC review process, subject to market and other conditions. The company has raised a total of $38.2 million. David Barrett, who Finovate interviewed about the company’s launch, is CEO.

Photo by Nataliya Vaitkevich from Pexels

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Sezzle Plans to File for U.S. IPO

Sezzle Plans to File for U.S. IPO
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Sezzle

Buy now, pay later (BNPL) company Sezzle is planning to strike while the iron is hot.

The Minnesota-based firm, which is already publicly-listed on the Australian Stock Exchange (ASX), is hoping to capture U.S. investors, now that the BNPL trend has exploded in this continent. Plans for the public listing are still in early stages. Details, such as the timing, price, and use, have not been revealed.

Prompting the plan to list is the company’s recent growth. According to its latest earnings announcement, Sezzle added 400,000 customers and recruited 7,300 active merchants in the first quarter of this year. This boost brings the firm’s total users to 2.6 million and total merchants to 34,000. Not surprisingly, the surge in usage helped increase the company’s first quarter income, which was reported at $22.3 million.

Sezzle initially went public on the ASX in July of 2019, raising $30 million on its first day of trading. The company now has a market cap of over $777 million. This figure is almost 5x higher than it was at the start of 2020. Sezzle’s move to the U.S. public markets follows its competitor, Affirm, which debuted on the Nasdaq at the start of this year.

Sezzle’s BNPL technology allows customers to split their ecommerce purchases into four installments with only 25% down and no fees. The offering is currently available to shoppers in the U.S., Canada, and India, and will soon be offered to residents in Brazil.

In February, Sezzle teamed up with Discover to work with select merchants on Discover’s network to help them provide their customers with additional payment options. Last September, the company launched a virtual payments card that helps customers benefit from Sezzle’s BNPL tech when they make purchases at brick-and-mortar stores.

Sezzle was founded in 2016. Charlie Youakim is CEO. 

Photo by Ketut Subiyanto from Pexels

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Google Pay Steps Up Embedded Finance, Banking Tools

Google Pay Steps Up Embedded Finance, Banking Tools
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Google

After reviving Google Pay in November of last year, Google made an announcement today that is sure to turn some heads in the fintech space. The two most relevant elements in today’s news release are new shopping options and spending insights.

To offer new shopping options, Google has partnered with Safeway and Target to help users browse weekly deals on groceries at Safeway and Target locations from within the Google Pay app. The app will enable shoppers to save their favorite items to purchase at a later date. Soon, users will be able to turn on push notifications to see deals from 500 Safeway stores and nationwide Target stores when they are nearby (if they have location services enabled).

The additional embedded shopping tools bring added stickiness to the app. However, Google will need to offer shopping experiences at more than just two stores to truly capture users’ attention.

Google Pay’s new spending insights tool comes a bit closer to what consumers may expect to see at their traditional bank. Via the Insights tab, users can see their account balance, view upcoming bill reminders, analyze weekly spend summaries, and receive alerts when large transactions are made. Under the Insights umbrella, Google also made it easy for users to view transactions by merchant or by category.

While the new spending insights may prove to be useful to shoppers, without more robust budgeting, planning, and forecasting tools Google Pay is unlikely to win consumers over from their traditional bank.

In today’s release, Google also added two more cities in which travelers can pay for transit. Via an integration with Token Transit, users in the San Francisco Bay area and Chicago can purchase and use mobile transit tickets through the Google Pay app. The two new cities join the list of 80 cities and towns across the U.S. that already offer travelers transit purchasing capabilities via Google Pay.

Regardless of the shortcomings of today’s new features, both banks and fintechs should be wary of Google Pay’s next moves. The app’s embedded finance capabilities, including grocery shopping and added transit ticket purchasing, are a signal of what is to come. Similarly, if Google Pay continues to add more personal financial management tools, such as budgeting and retirement planning, consumers may want to spend more time within the Google Pay environment and less time in their traditional banks’ app.

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Personalizing the Digital Divide at FinovateSpring

Personalizing the Digital Divide at FinovateSpring
By Julie Muhn (@julieschicktanz) Posted on
Categories: FinovateSpring 2021

We may still be enduring the absence of in-person networking, but there are a handful of ways to stimulate casual banter among conference participants.

At FinovateSpring, taking place digitally May 10 through May 13, we are making it as easy as possible for attendees and speakers to engage with each other through interactive roundtable sessions, networking “rooms” and a digital cafe.

One avenue we’ve found particularly useful to bring a personal element to the demo presentations is our curated set of 25-in-5 videos. In these videos, our team asks 25 rapid-fire questions in under five minutes to the demo companies at FinovateSpring.

My favorite part of these videos is that they bring a human element to each demo company. That’s because we ask the presenters off-beat questions that help you get to know them on a more personal level.

All of the 25-in-5 interview videos will be available as exclusive, on-demand content within the FinovateSpring Digital event platform. If you’re registered, keep an eye out for early access to schedule meetings and curate your event-day agenda with the sessions that most interest you.

And don’t worry about missing out. There’s still time to register, and with no need to buy a plane ticket and book a hotel room, FinovateSpring is more accessible than ever.

See you in the networking hall!

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Fiserv Launches QR Code Payments at the Point of Sale

Fiserv Launches QR Code Payments at the Point of Sale
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Fiserv

Today brings yet another indication that QR codes are back in style. Fiserv announced it is partnering with PayPal to enable businesses to use QR codes to offer touch-free payments at the point of sale.

Through the partnership, small and mid-sized businesses using Fiserv’s Clover point of sale and large enterprises leveraging the company’s Carat commerce ecosystem will be able to accept payment via PayPal and Venmo through QR codes at the point of sale.

“With consumer preference shifting towards touch-free interactions, it’s critical that businesses are able to connect physical and digital commerce,” said Fiserv’s Head of Global Business Solutions Devin McGranahan. “By enabling consumers to pay digitally via a QR code and popular digital wallets like PayPal and Venmo, businesses are providing added convenience and choice as in-person shopping, dining and entertainment experiences resume.”

As shown in the video above, the QR codes make the touch-free payment process relatively frictionless. Nonetheless, there is one catch– users must have a PayPal or Venmo account and mobile app.

Consumers may be willing to endure the extra friction, however, as people have become more likely to try out new digital technologies in the wake of the pandemic.

Fiserv’s announcement comes about a month after the company agreed to acquire payment processing and payment acceptance startup Pineapple Payments.

Founded in 1984 and headquartered in Wisconsin, Fiserv’s technologies serve nearly six million merchants across the globe. Frank Bisignano is president and CEO.

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Nutmeg Reaches $4.2 Billion AUM

Nutmeg Reaches $4.2 Billion AUM
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Alumni profile, Nutmeg

When it comes to European wealthtech companies, Nutmeg is the original gangster. The London-based company was founded in 2011 and demoed at FinovateEurope a year later in 2012.

Today, the company reached a milestone, topping almost $4.2 billion (£3 billion) in assets under management. The news comes after the company experienced a 72% year-on-year growth in assets under management in the first three months of this year.

Nutmeg has seen a 53% increase in the number of investors on its platform over the past year, and now counts 130,000 investors total.

The growth spurt can be attributed to a few things. First, the company brought on a new CEO, Neil Alexander, after taking a $30+ million loss in 2019. Another big factor in Nutmeg’s recent growth is the increased interest in investing during a low interest rate environment.

“While the last year has been financially difficult for many people, we have also seen many new and existing clients who have been fortunate enough to have more disposable income as a result of reduced expenditure on leisure, hospitality, commuting and holidays,” said Alexander. “Nutmeg has been a beneficiary of this shift, welcoming tens of thousands of seasoned investors wanting to take advantage of a digital-first wealth management service, along with first-time investors looking for the support they receive from our wealth services team in helping them to achieve their financial goals.”

Nutmeg offers ISAs, pensions, and general investment accounts. The firm offers a range of investment options including fully managed, fixed allocation, socially responsible. Earlier this year, Nutmeg partnered with J.P. Morgan Asset Management to offer a new investment option, Smart Alpha.

Smart Alpha combines Nutmeg’s core investment principles, ETF experience, and fractional investment expertise with J.P. Morgan’s in-house, multi-asset knowledge to provide investors a globally diversified, dynamic portfolio.

Photo by Alessia Cocconi on Unsplash

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Greenlight Almost Doubles Valuation in $260 Million Round

Greenlight Almost Doubles Valuation in $260 Million Round
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Greenlight, a company that provides financial services technology for kids, announced today it has landed $260 million in funding. Today’s investment nearly doubles the Georgia-based company’s valuation, boosting it up to $260 million.

The Series D round, which brings Greenlight’s total funding to more than $550 million, was led by Andreessen Horowitz with participation from existing investors TTV Capital, Canapi Ventures, Wells Fargo Strategic Capital, BOND, Fin VC, Goodwater Capital. New investors Wellington Management, Owl Ventures, and LionTree Partners also participated. Andreessen Horowitz General Partner David George will join Greenlight’s board of directors.

As for Greenlight’s valuation, the company saw an increase from $1.2 billion to $2.3 billion over the course of six months.

Greenlight will use today’s funds to add more services to its platform, increase its distribution partnerships, and expand to more geographies to ultimately reach more families. Additionally, the company will use the investment to increase its human resources, with a plan to add 300 employees over the next two years.

“Our vision at Greenlight is to create a world where every child grows up to be financially healthy and happy,” said Greenlight Co-founder and CEO Tim Sheehan. “Today’s financing will enable us to bring even more value to families as we continue to introduce new innovative products that shine a light on the world of money.”

Founded in 2014, Greenlight offers a money management platform for families that helps three million parents and kids gain skills to manage their earnings, savings, spending, giving, and learn to invest via a debit card, companion app, and educational resources.

Greenlight has struck a chord with its family-based finances approach. In the past year, the company has more than tripled its year-over-year revenue, more than doubled its users, and doubled its workforce. Earlier this year, Greenlight launched a new products, Greenlight Max, which helps kids research and invest in stocks with parental approval.

“The demand for Greenlight’s family finance solution continues to grow,” said Greenlight Co-founder and President Johnson Cook. “With the support of our investors, we look forward to empowering even more parents to raise financially-smart kids.”

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Fintech Trends Budding Up this Spring

Fintech Trends Budding Up this Spring
By Julie Muhn (@julieschicktanz) Posted on
Categories: FinovateSpring 2021, Julie's Column

We’re four and a half months into 2021, and we’re already starting to see the fintech and banking industries shake off the 2020 mindset.

That’s not to say that companies have left behind their digital agendas that took precedence last year. In fact, it’s quite the opposite. Banks and fintechs have transitioned to apply the lessons they learned amid the massive growth period last year into new initiatives.

So what new frontiers does the industry have its eye on? I took an early look at some of the trends beginning to emerge at our upcoming FinovateSpring conference, taking place digitally May 10 through 13.

Here are the top three themes from the discussion sessions:

  • Embedded finance and banking-as-a-service
    These two intertwined trends have exploded in the past year. Embedded finance and the concept’s predecessor, banking-as-a-service, are helping non-banking companies leverage fintech to offer financial services to their clients. Food delivery, ridesharing, and big tech companies have all benefitted from offering their customers a form of banking services.

    Increased customer awareness and demand are tipping the scales on these tandem trends this spring, rising them to the top. Thanks to the pandemic driving much of our everyday lives into the online realm, customers have realized the convenience that comes from being able to combine banking tasks with everyday activities.
  • The ESG initiative
    Technologies and products that tackle environmental, social, and governance (or ESG) issues are nothing new. However, over the course of the first half of this year we’ve seen more fintech and banking players getting in on the action.

    Both new and incumbent players have heard consumers’ cries for a more sustainable approach to managing their financial lives. To meet this demand, companies are doing everything from making carbon neutral pledges, to offering wooden payment cards, to using customer deposits to fund sustainable initiatives and donating profits to reforestation efforts.
  • CBDCs and digital currencies
    While central bank digital currencies, or CBDCs, should have been on banks’ radars last year, the global pandemic took precedence. Today, while the industry is still working on reimagining the digital experience, there has been more space to think about operating in a future where CBDCs and other digital currencies are commonplace.

    There are currently six countries piloting CBDCs, while many others have made key developments in implementing a formal release of CBDCs. The U.S. has stated that it will not race other countries to the finish line of launching its own CBDC. The country has still signaled some progress toward its own digital currency, however, which has turned the attention of many in the fintech space.

In addition to these, experts will be discussing themes from previous years, including customer experience, AI, digital transformation, and faster payments – as well as fringe topics such as quantum computing.

Taking a look at content from the developer-focused track, FinDEVr, we’ll see an in-depth look at the technology behind open banking, customer onboarding, lending-as-a-service, and customer experience and design. FinDEVr will take place on May 13.

Check out more information on how you can save on tickets to both FinovateSpring and FinDEVr, held May 10 through 13 in Central Standard Time.

Photo by Alexandru Dinca from Pexels

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Digital Identity’s New Frontier

Digital Identity’s New Frontier
By Julie Muhn (@julieschicktanz) Posted on
Categories: Experian, Interview, Speaker series

After the world went digital last year, the digital identity crisis began taking on new life. Most fintech players are involved in digital identity in some way, and Experian is no exception.

We recently spoke with Eric Haller, Experian’s Executive Vice President and General Manager of Identity, Fraud & DataLabs, to get an idea of how digital identity is changing.

In the interview below, Haller offers his expert opinion and shares how enabling technologies such as AI and the blockchain are impacting how firms think about digital identity.

Digital identity has been on the radar of financial services firms since the dawn of online services. How has this past year of digital acceleration changed how firms approach digital identity?

Eric Haller: The pandemic has shifted segments of the population to the web that weren’t as engaged online as they were prior to the pandemic. For this segment, shopping “face to face” felt safer in many ways. But with a biological threat surfacing, the risks of shopping in the physical world traded places for online risks. All of a sudden, online services seemed much safer.

This plays out in our research where we saw a 20% increase in online shopping this past year with 43% of consumers believing they will even increase their online activity over the next year. And with this shift, 55% of consumers say security is their top priority in a digital experience.

Tell us about the role that AI plays in enhancing digital identity verification for banks.

Haller: To validate someone’s digital identity, literally hundreds of data elements are evaluated to assess whether an individual is a bot, an imposter or the person they claim to be. And all this data is collected, analyzed, and acted on in milliseconds. AI allows for these complicated links and behaviors to be tied together in a variety of ways quickly, efficiently, and accurately to assign the correct conclusion to each customer.

If everything goes well for a legitimate customer, the experience is smooth sailing and both the consumer and merchant conduct “fraud free” business. Most often, there is no fraud. It only happens a very small percentage of the time. But it’s important that if it is a bot or an imposter, that the models in place are precise.

The blockchain seems like a valuable enabling technology when it comes to proving identity. Is this an idea you’ve seen gain popularity? Or is it more of just a fad?

Haller: The portability of a trusted identity in a digital ecosystem integrated with a blockchain could serve a lot of value for consumers and businesses. But it requires quite a bit of effort to get both those that want to share their identity and those willing to invest in accepting it participating in it.

If there were a lot of businesses that would accept a particular blockchain based ID, consumers would put in the effort to have on and use it. If there were a lot of consumers with it, businesses would put in the effort to invest and accept it.

Which side grows with scale first? There are many chasing this ideal. I wouldn’t characterize it as a fad — just very ambitious and challenging to achieve.

Photo by Pablò on Unsplash

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