Agora Data Launches Reducing Rate Line of Credit

Agora Data Launches Reducing Rate Line of Credit
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news

Buy Here, Pay Here (BHPH) crowdsourced securitization firm Agora Data is coming out with a new financing tool this week. The Texas-based company is introducing a reducing interest rate line of credit for BHPH dealers and small-to-mid-size finance companies to offer their sub-prime borrowers more vehicle financing options.

With the new reducing rate line of credit, the interest rate decreases over time. The loans also come with other advantages not typically found with traditional financing options, including no personal guaranty or recourse, flexibility to draw cash as needed, and no origination or unused line fees.

“With AgoraCapital, we remove the obstacles dealers confront in traditional lines of credit and empower them with the same secret sauce enjoyed by larger national dealer groups,” said Agora Data CEO Steve Burke. “Agora’s innovative, best-in-class financing options and robust data analytics are leveling the playing field for an underserved and underbanked industry.”

Agora Data was founded in 2017 and its team of auto retail, finance industry experts, and top data scientists leverage AI to bring BHPH car dealers a simplified experience when it comes to selling auto loans. Agora Data aids dealers in selling their auto loans to banks, finance companies, hedge funds, and private equity firms. The selling tool groups all firms’ offers together and analyzes each one in order to provide the dealer with the most competitive offer.

In addition to the selling service, the company offers AgoraInsights, a product that helps dealers maximize portfolio performance, reduce risk, and manage cashflow. “Agora is already making a positive difference for the BHPH industry by helping our members strengthen their financial footing and realize unprecedented growth, knowledge, ability to compete and ultimately build wealth,” added Burke.

News about auto financing has consistently appeared in the fintech headlines since the beginning of the COVID pandemic. However, while Agora Data’s announcement is aimed at auto financing for the underbanked community, most of the news we’ve seen in this sector has focused on digitizing and managing the loan application portion of auto loans and refinances. One such company, MotoRefi, partnered with SoFi in April of this year and received $45 million in funding in May.

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Airwallex Reaches $5.5 Billion Valuation After $100 Million Investment Extension

Airwallex Reaches $5.5 Billion Valuation After $100 Million Investment Extension
By David Penn Posted on
Categories: Daily news, Funding

In an extension of its $200 million Series E financing round, digital payments company Airwallex has secured an additional $100 million in funding. The extension came from Lone Pine Capital and featured the participation of existing investors such as 1835i Ventures and Sequoia Capital China. Now standing at $300 million, Airwallex’s latest funding gives the company a valuation of $5.5 billion. The company has raised a total of $802 million.

“As we approach our sixth anniversary, we want to continue to connect entrepreneurs, business builders, and makers with opportunities in every corner of the world,” co-founder and CEO of Airwallex Jack Zhang said. “This new capital injection will allow us to do just that, fueling M&A opportunities that will accelerate our global expansion plans, pursuing our mission to empower businesses to grow without borders.”

Headquartered in Australia, Airwallex offers a financial infrastructure and platform that enables businesses to manage payments online. The company’s business accounts allow businesses to transfers funds worldwide to more than 130 countries in 31 currencies, at a cost of 0.4% to 1.0% above the interbank FX rate. Airwallex’s business accounts connect seamlessly with online stores such as eBay, Shopify, and PayPal, as well as with accounting packages like Xero, and enable firms to issue virtual “borderless” payment cards to their employees.

Airwallex’s funding comes as the company reports a 1.6x year-over-year revenue increase for Q3, along with annualized revenue of more than $100 million. Launching its virtual employee cards in Hong Kong and the U.K. this past quarter, Airwallex also secured licenses to operate in both Singapore and Malaysia.

“Receiving this approval reflects our robust policies, compliance framework and risk management systems we have put in place,” Zhang said when Airwallex received its Major Payment Institution License by the Monetary Authority of Singapore (MAS) earlier this month. “We will continue to work closely with regulators and partners to ensure we facilitate a safe, effective, and transparent way to manage their cross-border financial transaction needs.”

Founded in 2015, Airwallex has recently announced partnerships with Australian digital brokerage company Stake and travel lifestyle brand Cathay. In October, the company was named to the 2021 CB Insights Fintech 250 list for the fourth consecutive year.

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4 Things to Know about the Creator Economy (and How Banks Can Get in)

4 Things to Know about the Creator Economy (and How Banks Can Get in)
By Julie Muhn (@julieschicktanz) Posted on
Categories: List series, Thought Leadership

The modern world has witnessed three major economies. First, there was the industrial economy in which people earned money through physical activity. Then came the consumer economy in which people made money performing services. Next, the knowledge economy enabled people to earn money through leveraging intellectual capital and insight. 

In these past few years, we’ve been witnessing the birth of the creator economy, a new economy fueled by social media platforms and video sharing. This new working order democratizes the ability for anyone to become a celebrity. Here’s a look at four key facts of this new economy.

Who

While many consider the creator economy to be limited to YouTubers and Instagram influencers, it actually has a wider breadth. In essence, everyone with an online presence is a creator, since we are all making content and sharing it online in some form.

A more exclusive definition of a creator is anyone who monetizes content online. This represents not just social media influencers, but also includes those who create and sell NFTs, ebooks, podcasts, digital art, etc.

Because there are such low barriers to entry in the creator economy, even kids can do it. In fact, one of the most famous YouTube creators is Ryan, an 11-year-old with 30.9 million subscribers who posts videos of himself playing with toys. Ryan is reportedly worth $32 million.

The participation of kids in the creator economy is influencing how younger generations view their future. According to a recent study, one third of kids between ages eight and 12 want to be either a YouTubber or Vlogger when they grow up.

Size

The current size of the creator economy is over $100 billion and growing. YouTube alone expects a $30 billion stream of revenue by the end of 2021. Of the 50 million people that consider themselves a creator, around two million of these are professionals making six-figure salaries.

Where’s the money?

Just like other economies, one of the ways that creators are recognized for their contributions is by getting paid. While this payment used to come from ads, branded content, or sponsorships, today’s monetization looks different. That’s because, instead of relying on third party sponsorships and brands to receive payments, creators now receive payments via subscriptions, tips, and even by payments directly from the user.

One of the latest examples of this is TikTok, which recently introduced the concept of in-app tipping. Users with more than 100,000 followers can apply to begin receiving tips from their fan base. When they receive a tip, 100% of the compensation goes to the creator; TikTok doesn’t take a commission.

Creators aren’t just getting paid in dollars. Owners and creators of non-fungible tokens (NFTs) receive payment in cryptocurrencies in exchange for their work. For more on how NFT compensation works, check out our piece 7 Things to Know about the NFT Craze.

How to leverage the opportunity?

The most important part about the creator economy for banks and fintechs is knowing how to leverage the opportunity. The future of this economy is unlike any we’ve ever seen in that payment and monetization may not rely on traditional banking infrastructure. In fact, many participants’ future revenue will be decentralized.

What we know for sure, however, is that personalization and customer experience matter and will continue to reign, even when payments are thrown off the rails. Many digital banks are already capitalizing on this opportunity. Just take a look at Nerve, a bank for musicians; Karat Financial, a bank for digital creators; and Willa, an invoicing tool for creators.

These financial services firms are different from banks in that they understand the unique challenges that come with being a creator. For example, creators experience many of the same difficulties as the self-employed, such as difficulty qualifying for a loan. They also often times have lumpy cashflow and need help with budgeting and financial planning.

There is still time for traditional banks to come up to speed in the creator economy. The key to serving this unique customer base will be to expand your existing resources for self-employed customers by offering new services such as revenue-based financing and on-demand wage access. As with most things in today’s digital banking era, the only way to properly serve this new user base will be through partnerships.

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U.S. Bank Buys Expense and Travel Management Platform TravelBank

U.S. Bank Buys Expense and Travel Management Platform TravelBank
By David Penn Posted on
Categories: Daily news, Mergers & Acquisitions, US Bank

U.S. Bank has agreed to acquire San Francisco, California-based expense and travel management company TravelBank. Financial terms of the transaction were not disclosed, but one outlet, Skift, has said that the deal was valued at $200 million.

“We are focused on giving businesses more confidence, control, and convenience in managing payments and expenses,” U.S. Bank Vice Chair of Payment Services Shailesh Kotwal said. “TravelBank will help us accelerate these efforts.”

Founded in 2016, TravelBank offers an all-in-one solution for expense and travel management. Relying on a single platform, reporting model, and subscription price, TravelBank helps employees and businesses control and track expenses, automate traditionally manual processes, streamline both approvals and reporting, and remain compliant. With more than 20,000 customers, TravelBank claims to have reduced business travel spending by its clients by 30% on average, while simultaneously boosting employee morale with a user-friendly design and a travel rewards program. Ahead of this week’s acquisition, the company had raised $35 million in funding from investors including Dreamers VC and DCM Ventures.

“We created TravelBank to provide a single experience for expense reporting and travel management,” co-founder and CEO of TravelBank Duke Chung explained. “Our combined offering with U.S. Bank will be the most comprehensive expense, travel, and payment management solution in the industry.”

Skift further reported that Chung will “move over to the bank” post-acquisition, while TravelBank will continue to support its existing clients.

The acquisition is the fruit of a partnership between the two companies that extends back to September of 2020. In the fall of last year, U.S. Bank integrated TravelBank’s travel and expense management platform into its U.S. Bank Instant Card. The collaboration enabled program administrators to issue Instant Cards directly from their expense management platforms.

With nearly 70,000 employees and $567 billon in assets, U.S. Bancorp is the parent company of U.S. Bank National Association. Headquartered in Minneapolis, the bank serves millions of customers, both in the U.S. and around the world, with a variety of services including consumer and business banking, payments, corporate and commercial banking, wealth management, and investments.

U.S. Bank demonstrated its Card-as-a-Service (CaaS) solution at FinovateFall 2021 in September. The technology enables companies to leverage API integration to extend corporate credit digitally and create a custom virtual payment experience in their ecosystem.

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MoneyLion Acquires Creator Network and Content Platform MALKA

MoneyLion Acquires Creator Network and Content Platform MALKA
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions

MoneyLion made a move today that will help it catch the eye of prospective customers and retain its existing ones. The digital bank acquired MALKA, a creator network and content platform, to help it better engage with consumers and connect with communities.

MALKA was founded in 2012 and works with creators to develop content across digital mediums including advertising campaigns, original branded content, e-gaming livestreams, podcast series, feature length documentaries, sports representation, and marketing. One of MALKA’s differentiating factors is that it maintains a talent base of 170 employees in-house in order to maintain relationships instead of working with different freelancers on different projects.

MALKA will help MoneyLion, which already offers MoneyLife content, in its mission to become a daily destination by bringing evergreen content to educate, inform, and support customers’ financial decisions. Ultimately, integrating MALKA’s content into MoneyLion will support the digital bank’s marketing and brand-building efforts.

“Through this acquisition, which we anticipate will be accretive and cash flow positive in 2022,” said MoneyLion Co-Founder and CEO Dee Choubey, “we will now be able to fully leverage MALKA’s capabilities so that the MoneyLion brand can truly live wherever our customers are investing their attention.” CMO Bill Davaris added, “This fundamental shift will allow us to own and not rent the relationships we are cultivating with new and existing MoneyLion customers.”

At face value, a tie-up between a digital bank and a content creation company seems a bit odd. The acquisition, however, can be seen as MoneyLion simply buying its own creative marketing and content department. No matter how you look at it, the acquisition is a hat tip to the new creator economy and speaks to how content-driven today’s consumers are.

MALKA will operate independently from MoneyLion and the company’s Founder and CEO Louis Krubich and Co-Founder and President Jeff Frommer will continue to lead daily operations. “This partnership will allow us to exponentially grow our creator network and engage with millions of more fans,” said Krubich.

MoneyLion launched in 2013 and offers a full-service platform that delivers mobile banking, lending, and investment solutions. Earlier this year the company teamed up with Zero Hash to launch the ability for users to buy, sell, and hold cryptocurrencies. The company went public on the New York Stock Exchange in September via a SPAC merger with Fusion Acquisition Corporation.

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FICO Unveils New Loan Origination Solution

FICO Unveils New Loan Origination Solution
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Alumni profile, FICO

Analytics and decision management technology company FICO launched a loan origination tool called FICO Originations Solution that automates the entire customer journey leveraging the FICO platform.

The cloud-based tool leverages FICO’s enterprise intelligence network to streamline and personalize loan originations. The new tool helps financial services providers do two key things. First, it helps remove friction from the customer experience. Second, it empowers loan originators by helping them make more precise origination decisions and better manage risk, ultimately helping them grow more profitable portfolios.

This enhanced decision-making is thanks in part to FICO’s data library that offers lenders access to 130+ global data sources. The ever-increasing data source helps firms make faster and better customer decisions.

The FICO Originations Solution starts with a completely digital onboarding experience. The tool considers an organization’s goals, including the types of borrowers they want to attract, their ideal conversion rate, and profitability goals. FICO offers simulation capabilities to test the user experience to determine if decreased friction results in increased fraud or if changing an application question increases the conversion rate.

FICO Originations Solutions’ customers have access to FICO’s suite of tools that includes interactive messages, fraud prevention capabilities, and pricing optimization.

“Financial services providers today need data-hungry, analytics-ready, agile, extensible systems in order to compete in a digital-first economy,” said FICO VP and Head of Product Management Tim Van Tassel. “FICO Originations Solution, Powered by FICO Platform provides the digital and analytic sophistication that enables financial institutions to offer the safety, convenience, and personalization that customers look for during the account opening process through their chosen channel, while closely managing customer-level risk.”

FICO was founded in 1956 and is headquartered in California. The company is best known for the consumer FICO score that is calculated based on information in credit reports maintained by Experian, Equifax, and TransUnion. The company also offers fraud and compliance as well as debt collection and recovery solutions.

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Upgrade Now Valued at $6 Billion after $280 Million Raise

Upgrade Now Valued at $6 Billion after $280 Million Raise
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Alternative credit provider and digital bank Upgrade announced a $280 million investment this week. The Series F round brings the company’s total funding to $600 million and boosts its valuation to $6 billion, which is almost double its last valuation of $3.3 billion in August.

The round was led by Coatue Management and DST Global with participation from Dragoneer Investment Group, Gopher Asset Management, G-Squared, Koch Disruptive Technologies, Old Well Partners, Ribbit Capital, Sands Capital, Ventura Capital, and Vy Capital.

Upgrade was founded in 2016 and offers a variety of low-cost personal loans and credit cards that come with rewards ranging from Bitcoin cashback to 3% cashback. Earlier this year the company debuted a checking account with a debit card that pays 2% cashback for common expenses.  

The company differentiates its card, which is issued by Sutton Bank, from traditional credit cards by combining monthly charges into installment plans that the borrower repays over 24 to 60 months. Upgrade structures the repayment this way to get its users into the habit of paying down their balance every month and avoid getting trapped in a continuous cycle of debt.

The funding news comes four months after Upgrade closed its $105 million Series E round. Company CEO Renaud Laplanche said that the round “demonstrates Upgrade’s rapid growth and commitment to delivering innovative financial products that benefit consumers.”

The “rapid growth” Laplanche references has been seen in recent acclamations. Earlier this year the Financial Times selected Upgrade as the fastest growing company in the Americas and the Nilson Report recognized the Upgrade Card as the fastest growing credit card in America, placing Upgrade among the top 50 U.S. credit card issuers.

Since launching its credit card in 2017, Upgrade has delivered $10 billion in total credit to customers via the company’s credit cards and loan products. The majority of this credit has been issued this year alone; the company is on track to deliver $8 billion in credit in 2021.

Upgrade is headquartered in California with an operations center in Arizona and a technology center in Canada. The company is partnered with Cross River Bank and Blue Ridge Bank for credit lines and banking services, NYDIG for Bitcoin rewards, and Sutton Bank for card issuance.

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eBankIT Teams Up with Wise to Enable Banks to Offer Faster, Cheaper Money Transfers

eBankIT Teams Up with Wise to Enable Banks to Offer Faster, Cheaper Money Transfers
By David Penn Posted on
Categories: Alumni News, Daily news, ebankIT, Wise

A pair of long-time Finovate alums have teamed up to give banks and other financial institutions access to faster, more affordable international money transfers.

Bank software innovator ebankIT and worldwide money transfer platform Wise (formerly Transferwise) announced today that Wise’s international money transfer service will be the first solution of its kind to be made available on the ebankIT platform marketplace. Relied upon by financial institutions to build up their digital banking service options, the marketplace will enable these firms to add the money transfer service to their offerings without having to integrate it separately on their own.

“We believe in a better future for banking with true omnichannel capabilities – and international transfers are an essential part of this,” ebankIT CEO Renato Oliveira said. “By bringing together Wise, ebankIT, and our clients, we are changing international transfers for everyday people across the world. We’re delighted to offer Wise platform to our clients, so they can instantly tap into Wise’s world-leading infrastructure.”

Wise Platform has 12 distribution partners and 18 banks in 11 countries using the technology, along with seven enterprises. The company notes that 40% of its transfers are delivered in less than 20 seconds, and Wise charges no hidden fees by way of exchange rate mark-ups or other calculations. On average, Wise’s international money transfers are as much as eight times less expensive than those offered by traditional money service firms and other providers.

“For too long, international transfers have been slow, inconvenient, and blighted by traditional providers charging high, hidden fees,” Wise Head of Product Steve Naudé said. “It’s time for change. We aim to set a new global standard for international transfers across the industry. We’re thrilled to be working with ebankIT, a company that shares our vision. Together, along with ebankIT’s network of banks and financial institutions, we can help drag international transfers into the twenty-first century.”

Rebranding as Wise in February, the company formerly known as Transferwise has been a Finovate alum since its appearance on stage at FinovateEurope in 2013. In the years since, the London-based company has reached more than eight million customers worldwide and transfers more than $7.5 billion in customer funds every month. Wise’s technology currently comes pre-integrated in a number of core banking platforms including those from Temenos, Mambu, and Thought Machine.

The company went public on the London Stock Exchange this summer, earning a market valuation of $11 billion. Last month, Wise announced an integration with The Orchard, a subsidiary of Sony Music that specializes in music distribution and artist services. The partnership offers the company a more streamlined way for music labels to make royalty payments to musicians in multiple countries and currencies.

A Finovate Best of Show winner in 2019, ebankIT was founded in 2014 and is headquartered in Porto, Portugal. The company’s core-agnostic Omnichannel Digital Banking platform was recognized last year in both Gartner’s Market Guide for Multichannel Digital Banking Solutions and its Market Guide for Digital Banking Platforms. In partnership with Celero, a Canada-based solutions integrator for credit unions and other financial institutions, ebankIT’s technology this year has powered digital transformations at institutions such as Swan Valley Credit Union, 1st Choice Savings and Credit Union, and Entegra Credit Union.

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Here’s Why AI is No Longer a Fintech Trend

Here’s Why AI is No Longer a Fintech Trend
By Julie Muhn (@julieschicktanz) Posted on
Categories: Julie's Column, Thought Leadership

Can we stop naming AI as a trend in fintech? Probably not yet, but we should. That’s because trends ebb and flow, but AI isn’t going anywhere. Banks and fintechs aren’t going to let up on leveraging AI within the decade. In fact, the number of times we’ve seen the adjective “AI-powered” has only increased.

Depending on how you define it, fintech has been in existence for around 20 years. That’s a long time for themes to rise and fall. Below is a look at transitory trends, lasting trends, and AI’s place in the mix.

Fleeting trends

As regulation, technology, and consumer habits and tastes have changed throughout the years, so have fintech trends. However, many ideas in fintech never took off. While some were overhyped, others were simply a solution looking for a problem or were an idea before their time, offered to the market too soon.

A recent example of a transitory trend is card-linked offers (CLO) Also called merchant-funded rewards, these customer loyalty and rewards tools reached their peak in 2012. Similar to the buy now, pay later craze that is happening right now, there were multiple launches of new CLO companies each month. Even large banks were getting on board. In fact, in 2012 Bank of America debuted a CLO product, BankAmeriDeals, powered by Cardlytics.

It’s worth noting that card-linked offers are still around. It is only the growth rate and hype around CLOs that have decreased. In fact, Cardlytics, Cartera Commerce, Cachet Financial Solutions, and others still exist and serve customers today.

Lasting trends

The list of lasting trends in fintech is short. In fact, there are only a handful of trends that have been introduced over the last two decades that have become table stakes for every bank and fintech across all sub-sectors. Not surprisingly, because these lasting trends are now standard throughout the industry, they all seem quite obvious.

Three solid examples of these stronghold trends include having a digital presence, providing a mobile app, and offering digital payment/money transfer capabilities. The evolution began, at the dawn of fintech, with banks just starting to establish their online presence. The next adaptation of that was SMS banking, which evolved into to mobile apps and digital money movement.

Today, the application of AI is becoming so standard across the fintech industry that it can be added to the fintech trend hall of fame.

The current state of AI

In case you haven’t been paying attention, AI is being used across the entire fintech industry. Its applications are almost limitless, but here are a handful of current examples.

  • Lending– Underwriters can use AI to enhance the decisioning process to reduce risk, as well as to monitor for unseen biases in the lending process.
  • Payments– AI can enable biometrics-activated payments and can also create smooth payment processes by analyzing past transactions before approving or declining transactions on an issuer’s behalf.
  • Wealth management– Wealthtech companies can empower users with self-driving money, a concept that describes moving funds into and out of different accounts and investments based on fund performance, cash flow, and bill due dates.
  • Insurtech– AI can enhance predictive data modeling to create better pricing models around policies.
  • Security– Fraud detection in financial activity relies heavily on AI, as do both identity detection and verification.

Funding for AI fintechs has been on the rise since 2016. According to CB Insights, the total amount of funding in 2021 for AI startups in fintech is at the same level as last year’s year-end total, with $3.1 billion raised across 161 deals. This year, the average investment size clocked in at $25 million. There has also been an increase in M&A activity for fintech AI startups. So far this year there have been 12 mergers and acquisitions in the space, compared to eight last year and two in 2016.

Photo by Volodymyr Hryshchenko on Unsplash

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Float Lands $30 Million for Spend Management Technology

Float Lands $30 Million for Spend Management Technology
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Float, a Canada-based startup that offers a corporate card and spend management solution, landed $30 million (C$37 million) in funding this week. The Series A round was led by Tiger Global and brings the company’s total funding to $34 million (C$42 million).

The funding will help Float with its mission to deliver an end-to-end spend management platform for SMBs. “We want this platform to enable businesses and teams to focus on investing in their growth and eliminate the need to use different banking and software tools to make day-to-day payments… Float’s mission is to simplify spending for companies and teams,” the company explained in a blog post.

Float was founded in 2019 to offer Canadian SMBs a high-limit, no personal guarantee corporate card that is available in three business days or less. This turnaround is impressive when compared to the average four+ week wait time most businesses face to receive their corporate spending cards. Businesses can set custom spending limits, assign cards to employees, and review and approve transactions in real time.

In addition to the card capabilities, Float also offers spend management software that natively integrates with accounting software such as QuickBooks and Xero. The dashboard helps employers track real-time spending and provides an overview of individual, departmental, and categorical spending.

The investment comes at a good time for Float, which has seen significant growth since launching to the public in March of this year. The company now has hundreds of small business clients and continues to experience increased engagement. Float’s total payment volume has increased ~20x since June and its average monthly customer spend has increased more than 6x since March.

Float offers a freemium pricing model with varying features. All tiers come with 1% cashback, 0% FX fees, unlimited users, automatic top-ups, and a $100,000 spending limit. The paid tiers provide custom integrations, team management, and more.

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BM Technologies Inks Strategic Merger with First Sound Bank for $23 Million

BM Technologies Inks Strategic Merger with First Sound Bank for $23 Million
By David Penn Posted on
Categories: Daily news, Mergers & Acquisitions

BM Technologies (formerly known as Bank Mobile) has agreed to merge with Seattle-based community lender First Sound Bank for $23 million. The combined entity will be called BMTX Bank and will serve customers across the country digitally while maintaining a community banking division that will continue serving customers in the greater Seattle market.

“This is a thrilling milestone for BM Technologies and is a major step forward in executing our vision to create a disruptive FinTech bank that combines the best of financial technology with a strong and compliant FDIC-insured institution,” BM Technologies, Chair, Founder, and CEO Luvleen Sidhu said.

BMTX will pay up to $7.22 in cash for each share of First Sound Bank common stock, which amounts to approximately $23 million. Subject to regulatory approvals and customary closing conditions, the strategic merger is slated to close in the second half of 2022. The deal is expected to add significantly to the combined company’s revenue, EBITDA, and earnings trajectory over the next one to three years. Sidhu said that the strategic merger will enable BMTX Bank to offer a variety of new services including direct to consumer and small business operations, marketplace lending, robo-advisory, and blockchain-based payment systems.

“As one of the largest digital banking platforms in the country with approximately 2 million accounts, this merger allows BMTX to lead a new wave of financial innovation by enhancing its focus on technology, inclusion, easy-to-use products, and customer education with the mission of creating ‘customers for life,'” Sidhu explained.

Sidhu will serve as Chair and CEO of BMTX Bank, and will be directly responsible for digital banking initiatives. First Sound Bank President and CEO Marty Steele will serve as COO of BMTX Bank and will lead the company’s community banking division.

“As a local bank, we remain committed to our community and are excited about the opportunity to leverage BMTX’s innovative digital banking technology, Banking-as-a-Service business model, low-cost deposit funding, and better access to the capital markets in order to scale our SBA, commercial and private banking, mortgage, and other business lines,” Steele said.

Founded in 2004 with the largest initial capital base of any de novo bank in the Pacific Northwest at the time, First Sound Bank provides commercial banking services for SMEs, not-for-profit organizations, entrepreneurs, and professional service firms in the Puget Sound region. Headquartered in Seattle, Washington, First Sound Bank has approximately $150 million in assets.

Formerly known as Bank Mobile, BM Technologies was launched in 2015 with a goal of providing a simple, affordable, and financially empowering, digital-first banking experience. The company went public via SPAC at the beginning of the year, listing on the New York Stock Exchange under the ticker BMTX. BM Technologies currently has a market capitalization of $145 million.

The company’s strategic merger announcement comes on the heels of BM Technologies’ Q3 results. Among the quarter’s highlights, BM Technologies reported that serviced deposits topped $2 billion for the first time. The company also earned recognition in the 2021 Finovate Awards in September, winning Best Fintech Partnership courtesy of its collaboration with T-Mobile.

To learn more about BM Technologies, check out our Fireside Chat with Luvleen Sidhu from FinovateFall 2021 in New York.

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Stori Raises $200 Million for Financial Services for the Underserved

Stori Raises $200 Million for Financial Services for the Underserved
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Mexico-based Stori landed $200 million this week in combined debt and equity. The investment, which bring the company’s total funding to almost $250 million, will help the fintech provide financial services to its region’s underserved customers.

The $125 million in equity was co-led by GGV Capital and GIC with contributions from General Catalyst, Goodwater Capital, Tresalia Capital, Lightspeed Venture Partners, Vision Plus Capital, BAI Capital, and Source Code Capital. The $75 million in debt financing comes from Community Investment Management.

The investment echoes Stori’s success in the region. The company has become one of Mexico’s top issuer of new credit cards since February of this year. In fact, more than 2 million Mexicans have applied for a Stori credit card, and that number has grown by more than 10 times in the last twelve months.

And there is still plenty of room for growth. The broader Latin American region has 400 million underserved consumers. “Our mission – empowering financial inclusion for millions of hard-working people – is amazingly meaningful and challenging at the same time,” said Stori CEO and co-founder, Bin Chen. “We are progressing at an unprecedented pace by combining technology, machine learning, data-driven underwriting and an intuitive mobile-based user experience. A lot more will come in our journey to become a top consumer financial franchise in Latin America.”

Stori plans to use today’s funds to triple in size and broaden its product offerings to better suit customer needs, ultimately providing much-needed financial services to Mexico’s underserved citizens. The fresh capital will also help Stori grow its team and double down on training and development opportunities.

While Stori is focused on the Mexico region, the company boasts a global team with offices in Washington D.C., Mexico, and Asia. “Our success since launch is a direct result of having a team who is passionate about our mission to empower upward financial mobility for the underserved population,” said company Co-founder Marlene Garayzar. 

Photo by Andrés Sanz on Unsplash

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