Author: Julie Muhn (@julieschicktanz)

TrueLayer Raises $70 Million to Build for the Next Phase of Open Banking

TrueLayer Raises $70 Million to Build for the Next Phase of Open Banking
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Open banking platform TrueLayer recently landed $70 million in Series D funding.

The investment, which brings the London-based company’s total funding to $142 million, was led by Addition, with contributions from all major existing investors, as well as new investors including Visionaries Club, Surojit Chatterjee, Zack Kanter, Daniel Graf, and David Avgi.

TrueLayer’s mission is to open up finance with its open banking network that connects payments, data, and identity to help people spend, save, and transact more freely online.

The funding comes at a time of major growth in the open banking scene in the U.K. The nation has seen more than three million open banking users and if the growth curve continues, 60% of the U.K.’s population will be using open banking by the end of 2023.

Founded in 2016, TrueLayer now processes more than half of the open banking volume in the U.K., Ireland, and Spain. Much of this growth has come over the course of the past year during which time the company has grown by 600x and expanded across 12 markets.

As for what’s next, TrueLayer will launch new open banking capabilities this year. The company will also expand its network, which will in turn add more account connectivity for consumers.

“We believe that open banking is reaching maturity in several markets and the next phase is about solving bigger, more complex problems for our customers – layering value on top of the raw infrastructure,” said TrueLayer CEO and Co-Founder Francesco Simoneschi. “You’ll see us building more and more in this direction.”

TrueLayer’s clients number in the hundreds and include fintechs such as Revolut, Nutmeg, Trading 212, Stake, and Payoneer.

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Avant Acquires Digital Bank Level

Avant Acquires Digital Bank Level
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions

Online lending platform Avant is building out the breadth of services for its underbanked clients this week. The Illinois-based company acquired Zero Financial and its neobank Level for an undisclosed amount.

Level is built on the premise of helping users attain financial freedom. To differentiate itself from traditional financial services offerings, the digital bank offers cash back rewards on debit card purchases, a competitive APY on deposits, early access to paychecks, and no hidden fees.

As a result of today’s deal, Avant will be able to offer its 1.5 million customers access to Level’s digital banking services to augment its existing personal loan and credit card products. The additional banking products will also offer Avant access to more customer data which, in the end, will help in its underwriting process.

Avant CEO James Paris describes the move as “an important element” of the company’s strategy that involves providing underbanked consumers with financial products. “Expanding our product portfolio allows us to serve even more people, offering every consumer access to innovative and rewards-based products to simplify and improve their financial journey,” he added. “We’re looking forward to building on this acquisition and continuing to bring new products to our growing customer base.”

Current Level customers will still be able to make purchases, earn rewards, receive direct deposits to their account, and earn interest. While new customers cannot sign up for a Level account, they are able to join the wait list for Avant’s newly-branded banking product.

Avant was founded in 2012 and has since connected customers with more than $7.5 billion in loans and 400,000 credit cards. The company has raised more than $600 million in equity from investors including JP Morgan Chase and Hyde Park Venture Partners.

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SoFi Revamps Auto Loan Investing with MotoRefi Partnership

SoFi Revamps Auto Loan Investing with MotoRefi Partnership
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, SoFi

Digital financial solutions provider SoFi is getting into the vehicle loan refinance game. The online lender formed a partnership with MotoRefi to offer users yet another reason to use its services.

Founded in 2016, MotoRefi connects users with lenders and manages the back-end documentation process with each state’s motor vehicle department.

According to SoFi Executive Vice President Jennifer Nuckles, the addition of an auto loan refinancing tool was a logical one since many of the company’s users carry large balances on their auto loans.

Additionally, the nation is an increasingly fertile ground for a car loan refinancing tool. In the past decade, the number of vehicle loans has grown by 41%. Today, auto loans account for 9% of all household debt, with 114 million Americans carrying a total of $1.37 trillion in auto loans.

Through today’s partnership, MotoRefi will have access to SoFi’s two million customers via an integration on SoFi’s website. MotoRefi is banking on this increase in exposure; the company expects to process $1 billion in loans this year after handling $250 million last year.

Overall, the addition of the new service is another step toward making SoFi into a more “bank-like” environment. The California-based company, which originated in student loan refinancing, has since expanded to offer personal loans, home loans, investing tools, a checking account, rewards, budgeting tools, and more.

Launched last month, SoFi’s latest tool offers investors early access to IPOs. Users with at least $3,000 in their account can purchase shares of companies as they go public. This type of access to IPOs, which is generally not available to individual retail investors, will help SoFi reach the new generation of traders that have entered the stock market since the pandemic hit last year.

Fintech connoisseurs may notice the irony in SoFi’s new IPO investment tool. The company itself recently eschewed a formal public listing for a SPAC merger with Social Capital Hedosophia Holdings.

Photo by Brian Lundquist on Unsplash

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Alkami Announces IPO

Alkami Announces IPO
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alkami Technology, IPO

We reported earlier this year that cloud-based digital banking solutions provider Alkami was heading toward an IPO. Today, the Texas-based company has confirmed rumors.

Alkami will to list on the NASDAQ under the ticker symbol ALKT, launching 6,000,000 shares of common stock. Shares will be priced between $22 and $25. The company believes it will to raise up to $250 million via its IPO, which would value Alkami at $3 billion.

“We currently expect to use the net proceeds from this offering, together with our existing cash and cash equivalents, to finance our growth, develop new or enhanced solutions, and fund capital expenditures,” the company said in a statement.

Alkami offers solutions for both retail and business banking. The subscription-based offerings include tools for money transfer capabilities, financial wellness, customer service, security, and more. And because the company is built on an open platform, banks can leverage third party solutions to customize their offerings even further.

According to Alkami’s S-1 document filed with the SEC, the company saw revenues of $112 million last year, representing a 150% increase over 2019 revenues. Alkami has received more than $385 million from nine investors, including Franklin Templeton Investments, Fidelity Management and Research Company, and D1 Capital partners.

Founded in 2009 as iThryv, Alkami counts 151 bank clients representing 9.7 million end users. Mike Hansen is CEO.

Photo by Meriç Dağlı on Unsplash

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Next Insurance Raises $250 Million for Small Business Insurance

Next Insurance Raises $250 Million for Small Business Insurance
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news

Online insurance company for the self-employed Next Insurance just closed a $250 million investment round. The funding marks the company’s second $250 million investment received in the past seven months.

Investors include FinTLV Ventures and Battery Ventures, which led the round, with participation from CapitalG, Group 11, Zeev Ventures, Founders Circle, and G Squared.

With its total funding now at $881 million, Next Insurance’s valuation now sits at $4 billion. This figure is double the $2 billion valuation assigned to the company last September.

The valuation boost is well-deserved. In the past six months, Next Insurance announced two acquisitions, added new strategic partners, and doubled its gross written premium (for those not in the insurance industry, gross written premium is essentially the total amount customers pay for insurance coverage).

Since it was founded in 2014, Next Insurance has boosted its client base to more than 200,000. The company leverages machine learning and a purely digital approach to drive costs down by up to 30% in comparison to traditional policies.

“This latest round of financing is a validation of our vision which is to make it dramatically easier for small business owners to get the insurance coverage they need by removing friction from the customer experience,” said Next Insurance Co-founder and CEO Guy Goldstein. “It starts with developing a comprehensive digital product portfolio under one roof, continues with leveraging technology that improves the customer experience, and ends with a network of integrated partnerships that bring policy purchasing to the customer within the systems they already use.”

Photo by Alex Nemo Hanse on Unsplash

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Q2 Acquires ClickSWITCH for Digital Account Switching Service

Q2 Acquires ClickSWITCH for Digital Account Switching Service
By Julie Muhn (@julieschicktanz) Posted on
Categories: ClickSWITCH, Mergers & Acquisitions, Q2

Digital banking services company Q2 is getting a boost today. The Texas-based company announced it has acquired Minnesota-based ClickSWITCH.

As part of the agreement, Q2 will integrate ClickSWITCH’s account switching software-as-a-service solution into its product offerings. Terms of the deal were not disclosed.

Founded in 2014, ClickSWITCH offers its 450 financial institution clients an account switching solution for their end customers. The company leverages direct integrations with thousands of employers, payroll providers, and financial institutions to help users switch their direct deposits and automatic payments to new accounts. The client onboarding process, as a result, is simplified significantly.

Q2 anticipates the purchase will help its bank clients attract and retain new primary account holders. “We also believe that with ClickSWITCH we can help our customers provide their account holders with a more streamlined, frictionless experience, by offering an end-to-end digital customer acquisition, onboarding, and account switching solution,” added Q2 CEO Matt Flake.

Q2 will not only benefit from exposure to ClickSWITCH’s client base, but will also offer its existing banking-as-a-service clients more deposits, decreased client acquisition cost, and the potential for growth from an increase in cross-selling.

“As a combined force, we look forward to solving a fundamental issue that banks, credit unions, and fintech companies face – managing the complexity and administrative burden of account switching – by providing the most comprehensive and differentiated digital account switching solution in the market,” said ClickSWITCH Founder and CEO Cale Johnston. “We are delighted to be joining the Q2 team and look forward to delivering best-in-class financial solutions.”

Both Q2 and ClickSWITCH are Finovate alums, having demoed most recently at FinovateWest 2020 and FinovateSpring 2019, respectively.

Photo by Bench Accounting on Unsplash

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3 Things to Know About Walgreens’ New Bank Account

3 Things to Know About Walgreens’ New Bank Account
By Julie Muhn (@julieschicktanz) Posted on
Categories: List series

Walgreens announced this week it will launch a new bank account offering. The pharmacy chain, in partnership with InComm, is launching a Mastercard debit card to pair with both a mobile banking app and in-person service.

Here are a few things to know about the new accounts:

Available both on mobile and in-person

Unlike most digital banks that have launched in recent years to challenge incumbent banks, Walgreens’ new account will serve users in person. By the second half of this year, the bank plans to serve its client base at nearly 9,000 stores. As of now, there is no word on what specific services will be available in-store vs. online but it is clear that account onboarding will be available through both channels.

This differentiating factor places the “Bank of Walgreens” at a significant advantage for two major reasons. First, 78% of Americans live within five miles of a Walgreens or Duane Reade store. That makes for easy access, especially in rural communities where banks are closing their doors but cash usage is still prevalent. Second, because of the foot traffic into its stores, Walgreens has a built-in potential client base to whom it can freely advertise.

In addition to in-person services, users will also have the option to manage their account in a mobile app. Walgreens has tapped InComm’s banking-as-a-service platform to create a modern digital experience.

Geared toward an older audience

Because the elderly population tends to need prescription refills on a regular basis, they tend to visit pharmacies more often. Given the demographic of this foot traffic, combined with the fact that 20% of Walgreens’ app users are 55 years of age and older*, Walgreens will likely target a more senior audience as banking clients.

The target market will truly differentiate Walgreens’ bank accounts from the myriad of digital banks that have launched in the past few years, many of which target Generation Z.

Tied into Walgreens’ existing rewards program

Launched last November, the myWalgreens customer loyalty program offers users 1% in-store credit in return for every dollar they spend on typical items and 5% in-store credit for every dollar spent on Walgreens branded products. Walgreens’ new debit card will enable users to more seamlessly earn and spend these rewards.

*according to a 2017 study.

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Paysafe’s Public Debut on the NYSE

Paysafe’s Public Debut on the NYSE
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions

Global payments platform Paysafe is making the move to the New York Stock Exchange this week. The London-based company is going public via a merger with Foley Trasimene Acquisition Corp. II, a special purpose acquisition company (SPAC) set up by billionaire business executive Bill Foley.

After the deal, which values Paysafe at around $9 billion, was approved on March 25, Paysafe began trading on the New York Stock Exchange today under the ticker symbols “PSFE” and “PSFE.WS.” The combined company now operates as Paysafe Limited.

“The closing of this transaction and our listing on the New York Stock Exchange is a huge milestone for Paysafe and getting to this point today is testament to the hard work and dedication of our team around the world,” said Paysafe CEO Philip McHugh. “We’re excited to be embarking on the next stage of our growth journey as a public company.”

Founded in 1996, Paysafe enables businesses and consumers to connect and transact using its payment processing, digital wallet, card issuing, and online cash solutions. The company has completed 11 acquisitions, most recently purchasing Openbucks last July.

Paysafe’s suite of brands includes Income Access, Paysafecard, Skrill, and Neteller. In an interview with CNBC, Foley described Paysafe’s solutions as “ubiquitous,” adding, “It’s just everywhere in terms of the gaming world and digital wallets, e-cash solutions.”

With 3,400 employees in more than 12 offices across the globe, Paysafe helps businesses and consumers transact across 70 payment types in 40+ currencies.

Photo by Gemma Evans on Unsplash

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GoodData Heeds the Call to the Cloud

GoodData Heeds the Call to the Cloud
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni profile, GoodData

Analytics company GoodData may have been founded 10 years ago but, as the company recently explained, it is just now exiting stealth mode.

That’s because GoodData is transitioning from focusing on white-labeled OEM analytics, where companies provide self-service insights to their clients, to focusing on Data-as-a-Service (DaaS). As GoodData Founder and CEO Roman Stanek explained, “It takes 10 years to become an overnight success.”

GoodData’s analytics now power over 140,000 businesses across the globe, and the company has spent the past two years building for the next chapter. Starting April 15, GoodData will expand its focus to offer DaaS. The offering transcends “business intelligence” to enable companies to make every decision a data-driven decision.

“Data-as-a-Service is the future of analytics: real-time, governed, secure, and scalable,” Stanek said. “Within the context of DaaS, we are opening our platform and making our experience with large scale analytics, data privacy, security, and operational excellence available for anyone to leverage to build and scale any of their data use cases; from self-service and embeddable analytics, to machine learning and IoT.”

Unlike GoodData’s initial offering, which was limited to running on Rackspace and Vertica, the DaaS platform will be available to companies of all sizes running on any cloud and cloud database. Additionally, the new build focuses on helping users gain insights from the data instead of simply presenting charts that still required significant interpretation.

Headquartered in San Francisco, California, GoodData most recently demoed at FinovateFall 2017. The company has received $151 million in funding from 20 investors including Visa Ventures, General Catalyst, and Andreessen Horowitz.

Photo by eberhard grossgasteiger from Pexels

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PayPal Users Can Now Checkout with Crypto

PayPal Users Can Now Checkout with Crypto
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, PayPal

PayPal launched Checkout with Crypto today. The new development enables users with cryptocurrency holdings to seamlessly transact using crypto at the online point of sale. Starting today, U.S. shoppers can make purchases using crypto at millions of online businesses.

The new Checkout with Crypto payment option will automatically appear in U.S. users’ PayPal wallets at checkout when they have a cryptocurrency balance of Bitcoin, Litecoin, Ethereum, or Bitcoin Cash that will cover an eligible purchase. Because PayPal makes money when users buy and sell cryptocurrencies on its platform, it is not charging additional transaction fees.

“As the use of digital payments and digital currencies accelerates, the introduction of Checkout with Crypto continues our focus on driving mainstream adoption of cryptocurrencies, while continuing to offer PayPal customers choice and flexibility in the ways they can pay using the PayPal wallet,” said PayPal President and CEO Dan Schulman. “Enabling cryptocurrencies to make purchases at businesses around the world is the next chapter in driving the ubiquity and mass acceptance of digital currencies.”

Essentially, Checkout with Crypto works behind-the-scenes of a transaction to help customers sell cryptocurrency through the PayPal platform. PayPal then uses it to pay a merchant, who receives U.S. dollars in exchange. Because of the embedded nature of the tool, the process happens in one seamless flow at checkout.

There are a few restrictions around Checkout with Crypto. First, the tool is only available to U.S. users. Second, purchases must be eligible. Finally, users can’t split the payment among currency types. In other words, in order to make a purchase in cryptocurrency, they must have a sufficient balance of a single cryptocurrency.

In the coming months, PayPal plans to expand the service to its full list of 29 million online merchant clients across the globe.

This move expands PayPal’s previous cryptocurrency capabilities. In partnership with Paxos, PayPal began enabling users to buying, selling, and holding crypto last October.

Photo by Charles Etoroma on Unsplash

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Circle Unveils Payments Tools for NFT Marketplaces

Circle Unveils Payments Tools for NFT Marketplaces
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news

Non-fungible tokens (NFTs) are the hottest fintech trend that nobody saw coming. And today, payments infrastructure firm Circle is extending its services to help support NFT marketplaces.

Circle’s new payments solution enables NFT marketplaces to accept both traditional payment cards and crypto payments. The Masachusetts-based company anticipates that the support will not only offer a more seamless user experience for NFT marketplaces, but will also support engagement by offering more payment options.

“This is not only an important and valuable trend for marketplaces and creators, it represents incredible demand from customers – for collectibles, artwork, moments, and really anything that can be tokenized on the blockchain,” said Circle Co-founder and CEO Jeremy Allaire. “Circle looks forward to supporting the industry – creators, platforms, marketplaces, storefronts and customers – with our solution for enabling a user-friendly, mainstream payments experience with the power of crypto connectivity and USDC.”

In the coming months, Circle will also add support for BTC and ETH payments; allow for the storage, custody, and transfer of NFT assets; and provide treasury and yield services.

Today’s news comes at a time when public awareness of NFT marketplaces is at an all-time high. One such platform, NBA Top Shot, has seen a 400% increase in sales over the past 30 days. Overall, sales volumes across major NFT marketplaces grew nearly 800%, to more than $200 million last month alone.

Since it was founded in 2013, Circle has supported over 100 million transactions worth tens of billions of dollars. The company, which counts almost 10 million retail customers and almost one thousand business clients, stores more than $5 billion in digital currency assets.

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Fiserv Buys Pineapple Payments

Fiserv Buys Pineapple Payments
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Fiserv, Mergers & Acquisitions

Financial services technology provider Fiserv made its latest acquisition this week. The Wisconsin-based company has agreed to purchase payment processing and payment acceptance startup Pineapple Payments.

Financial terms of the deal, which is expected to close next quarter, were not disclosed.

Under the agreement, Fiserv will continue to provide processing services to Pineapple’s 25,000 merchants. Fiserv anticipates the purchase will expand the reach of its own payment solutions, including the CoPilot partner platform, Clover, and Clover Connect.

“With Pineapple Payments already operating as a key distribution partner of Fiserv, we expect to accelerate the delivery of new and innovative capabilities to a host of new merchant clients,” said Fiserv President and CEO Frank Bisignano. “Together, we will provide omni-channel payments technology and services to enable merchants to maximize the potential of electronic payment processing. We look forward to welcoming Pineapple Payments to the Fiserv family and continuing to provide the best-in-class solutions and service that merchants and their customers expect.”

Headquartered in Wisconsin and founded in 2016, Pineapple Payments provides payment processing and omni-channel payment acceptance solutions for integrated software vendors and SMBs.

Today’s deal is Fiserv’s 35th acquisition. Prior to today, the company most recently bought up digital card services platform Ondot in a deal announced last December.

Photo by Any Lane from Pexels

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