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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Ant Group has set the price for its shares of its dual IPO today, and it is shaping up to be the largest public offering to-date, coming in at $34.5 billion.
The IPO will be spread equally through 1.67 billion new shares issued on Hong Kong’s Hang Seng, which is expected to raise $17.24 billion (HK$133.65 billion), and 1.67 billion new shares issued on Shanghai’s Star Market, which is expected to raise $17.23 billion (¥115 billion).
Ant will debut on November 5 on Hong Kong’s Hang Seng. The company has not disclosed a date for its planned offering on Shanghai’s Star Market.
Ant’s new valuation is anticipated to top $313 billion, up from an estimated value of $218 billion earlier this year. According to Statista, this valuation, when compared to U.S. megabanks, sits only below JP Morgan Chase, which has a market capitalization of $434 billion.
The anticipated $34.5 billion raise is a record amount, breaking the previous highest IPO set when oil company Saudi Aramco went public at $29.4 billion earlier this year. Ant’s parent company Alibaba holds the record for the second-highest IPO when it listed on the New York Stock Exchange in 2014 and raised $24 billion.
Alibaba plans to maintain its 33% share in Ant Group by having its subsidiary Zhejiang Tmall Technology purchase 730 million shares in the company.
As we reported earlier this year, Ant’s double-listing is intentionally avoiding U.S. markets. This is not only because of geopolitical tensions, but also to take advantage of new innovations in both Hong Kong and Shanghai markets, which offer weighted voting rights and offer more market-driven pricing than other domestic exchanges.
Ant was founded in 2014 and has more than 1.3 billion active annual users. Simon Hu is CEO.
Intelligent conversational chat technology is on its way to the 174,000+ members of Michigan-based United Federal Credit Union. The institution, which serves customers in neighboring Indiana and Ohio as well as in Arkansas, North Carolina, and Nevada, has teamed up with Finn AI to add the chatbot service to its suite of digital banking offerings.
United FCU will integrate the technology into its LivePerson-based live chat system, which provides credit union members with immediate assistance for routine queries. The integration will enable human agents to spend more time on complex customer services issues and allow the automated technology from Finn AI to handle everything from account access problems to forgotten passwords.
“The pandemic has increased the need for financial services companies to provide a superior customer experience,” said Finn AI CEO Jake Tyler. “United realizes the importance that digital and AI have in delivering on this promise. We look forward to partnering with them as they lay out the future of their customer service offering.”
A two-time Finovate Best of Show award winner, Finn AI leverages artificial intelligence to deliver an intelligent chatbot solution that provides optimized, out-of-the-box support for 500+ of the most commonly-requested banking queries and questions. Finn AI’s chatbot technology can interact with customers over a wide range of channels: from websites and native apps to popular messaging platforms such as WhatsApp and Facebook. With Finn AI, institutions can inexpensively expand service availability, onboard more customers faster by streamlining basic processes, improve customer engagement, and reduce handling time.
Founded in 2014, Finn AI is headquartered in Vancouver, British Columbia, Canada. Over the summer, the company announced a partnership with Genesys to add its banking chatbot to Genesys’ AppFoundry marketplace of customer experience solutions. Finn AI includes ATB Financial, Fidor Bank, and fellow multiple-time Finovate Best of Show winner MX among its customers and partners.
When it comes to taking advantage of the best that the world’s fintech has to offer, you won’t find financial services companies in Canada sleeping on the job. This week in the country’s payments space, Toronto, Ontario-based Versapay announced its acquisition of Solupay, a contactless payments company based in Ohio. We also learned that FinovateEurope alum unblu, which offers a digital conversational platform for FIs from its headquarters in Basel Switzerland, had teamed up with Calgary, Alberta-based digital technology solutions provider Celero.
By the end of the week, Canada’s largest credit education company, Borrowell, announced that it was partnering with multiple Finovate Best of Show winner MX. Borrowell, the first company in Canada to offer free credit scores via its partnership with Equifax, has launched a new bill tracking feature called Boost on its app. The company will use MX’s data cleansing technology to improve Boost’s analysis of user spending behavior to help users make better financial planning decisions.
“With MX, Borrowell is giving its customers greater clarity into how they can become more financially strong as a means to increasing credit strength,” MX Chief Customer Officer Nate Gardner said. “It is exactly this kind of innovation, partnership and money experience that MX loves to enable through our powerful data platform.”
Last week we featured an extended Q&A with Eric Rosenthal, Vice President and Managing Director for the Americas with Rapyd. If you’re interested in learning more about the fintech ecosystem in one of the most overlooked regions of the world, our conversation with Eric Rosenthal is a great place to start.
With that in mind, congratulations to Mexican challenger bank Klar, which raised $15 million in Series A funding in a round led by Prosus Ventures this week. Founded in 2019, Klar now has approximately $72 million in total debt and equity financing, and noted that the new capital will help the company build its engineering capabilities in its hubs in Berlin and Mexico.
“Klar is making credit accessible to all Mexicans, including those with no credit history,” Klar co-founder and Chief Financial Officer Daniel Autrique said. “We help people build credit by looking at how and where they spend their money, instead of being stuck with traditional credit scores that are backward looking and obsolete.” The company said that, since inception, it has issued more than 25,000 lines of credit among its 200,000 customers.
Here is our look at fintech around the world.
Sub-Saharan Africa
Stripe makes inroads in Africa with acquisition of Paystack.
A partnership between Standard Bank, Mastercard, and Google will help SMEs in Africa offer their services online as well as accept digital payments.
Trading Technologies teams up with Cape Town-based Applied Derivatives, which will distribute the TT platform from South Africa.
Central and Eastern Europe
PayRay, a factoring company based in Lithuania, receives banking license and begins banking operations in its home country.
Lithuanian online payments firm Interpaylink partners with iDenfy to provide remote user identification.
Advapay, a digital core banking platform provider based in Estonia, teams up with U.K.-based identity verification platform Sumsub.
Middle East and Northern Africa
Cairo, Egypt-based financial wellness platform NowPay raises $2.1 million in seed funding.
Central Bank of Bahrain launches the region’s first digital fintech lab, FinHub 973.
Commercial Bank of Dubai introduces cards and accounts for low-income consumers courtesy of partnership with Now Money.
Central and Southern Asia
Indian payments processor Razorpay secures $100 million in Series D funding, earning a valuation just over one billion.
Mastercard announces partnership with Indian regtech Signzy to bring the company’s video KYC technology to its banking customers.
Indian fintech Open partners with Equitas Small Finance Bank and Visa to offer business debit card.
Latin America and the Caribbean
Brazilian payment solutions provider Ebanx announces expansion of operations into five countries in Central and South America.
Venio, a mobile app that provides financing to the unbanked, goes live in Mexico.
Chile’s third largest bank, Banco de Crédito e Inversiones (BCI), partners with Temenos to launch new corporate bank in Peru.
Asia-Pacific
The People’s Bank of China holds lottery to distribute millions in digital yuan valued at $1.5 million.
Vietnamese online payment portal AppotaPay scores payment intermediary license from State Bank of Vietnam.
PayMaya, a mobile payments platform based in the Philippines, launches new mobile payment device PayMaya One Lite, that enables acceptance of a range of digital payment types.
Nordic challenger bank Lunar announced a $47 million (€40 million) Series C funding round today, bringing its total raised to $122 million. The funds come from investment firm Chr. Augustinus Fabrikker and individual investors Klaus Oestergaard and Alan Howard.
Lunar plans to use the new funds to enter the buy now, pay later (BNPL) space. “It’s the most profitable banking landscape in the world, but also the most defensive, with least competition from the outside,” Founder and CEO Ken Villum Klausen told TechCrunch. “This means that the traditional banking customer is buying all their financial products from their bank.”
The decision to launch a BNPL tool comes after the company’s many successful launches, including paid subscriptions, consumer loans, and business bank accounts. The bank currently counts 5,000 business users and 200,000 retail banking users across the Nordic region.
Unlike established players in the BNPL market, Lunar’s BNPL tool will not rely on merchant partnerships. Instead, the bank will ask users after they make a purchase if they want to split the payment amount into installments. This model will work with both brick-and-mortar retail as well as ecommerce purchases.
Villum Klausen founded Lunar in 2015. The company’s 180 employees work in the company’s offices across Denmark, Sweden, and Norway.
In a venture round featuring Motley Fool Ventures and Ally Ventures – the strategic investment arm of Ally Financial – as well as individual angel investors, Streetshares has secured $10 million in new funding. The company said that it will use the capital, which takes the company’s total to more than $279 million, to drive future product development with an eye on serving small businesses in the post-PPP market.
“We’re seeing exciting digital adoption by banks and credit unions in response to COVID-19,” said StreetShares CEO Mark L. Rockefeller. “But equally important to us is the practical impact our technology is having in helping their customers, especially underserved business owners, get the funding they need to succeed.”
Founded in 2013 and launched a year later as an affordable digital lending alternative for veteran-owned small businesses, StreetShares unveiled its lending-as-a-service platform last year at our annual fintech conference FinovateFall. The platform enables banks to lend up to $250,000 to SMEs, and features a digital loan application, instant underwriting, loan servicing, and tracking. The company’s offering came in handy this year when the coronavirus struck and businesses across the country were shut down and starving for financial assistance. StreetShares’ technology was leveraged widely by community lenders in order to make Paycheck Protection Program funds available to SMEs.
As such, so far this year, a total of 53 financial institutions currently use the StreetShares platform. The company said that it is now expanding its platform into a suite of small business banking solutions that will be especially helpful for community banks, credit unions, and their small business clients as digital transformation initiatives continue in the wake of COVID-19.
“We’re seeing years of digital adoption by banks condensed into weeks,” said Ollen Douglass, Managing Director of Motley Fool Ventures. “Beginning with PPP, and now on to a full-suite of products, we believe StreetShares is positioned perfectly to power banks in their digital transformations.”
StreetShares is headquartered in Reston, Virginia. Read our profile of the company from last summer as StreetShares was stepping up to help bring needed financing to SMEs at the onset of the COVID-19 crisis.
A look at the companies demoing at FinovateSpring Digital on May 10 through 13, 2021. Register today and save your spot.
Productfy makes it fast, scalable, and seamless to launch new financial products to market. With a unified platform and a single line of code per feature, companies can go live in weeks.
Features
Fintech tools in a box with embedded module, compliance, and elastic banking infrastructure
Accelerate time to market without spending time and money on undifferentiated features
Developer friendly
Why it’s great Productfy’s solution entails both developer friendly embedded fintech features and white glove support to enable fintechs to navigate the regulatory process with financial data and bank partners.
Presenter
Duy Vo, CEO & Founder Vo started Productfy after seeing the convergence of two huge macro trends: mass adoption of higher abstraction platforms and financial services moving to the edge of service providers. LinkedIn
A look at the companies demoing at FinovateSpring Digital on May 10 through 13, 2021. Register today and save your spot.
DQLabs is an artificial intelligence/ machine learning (AI/ML) augmented data quality platform that provides a simple way for organizations to handle issues around data quality, governance, curation, and master data management effectively.
Features
Discover trustable, high quality data in minutes using AI/ML
View a unified platform for data management needs
Conduct data ingestion, catalog, profiling, curation, governance, and MDM – all done in a few clicks
Why it’s great DQLabs’ AI augmented data quality platform gives organizations the ability to manage data smarter and leverage an immediate ROI in weeks, rather than months.
Presenter
Raj Joseph, CEO & President Joseph is a thought leader and visionary in the field of modern data management and augmented analytics and has two decades of experience around data science, AI/ML and enterprise data solutions. LinkedIn
A look at the companies demoing at FinovateSpring Digital on May 10 through 13, 2021. Register today and save your spot.
Glia is a digital customer service platform that connects financial institutions to their customers using chat, voice, video, co-browsing, and AI.
Features
Seamlessly move between modes of communication
Receive improved sales results and customer satisfaction via richer customer interactions
Deliver the best experience for customers and agents
Why it’s great By employing a digital-first approach to customer conversations, financial institutions improve customer satisfaction, reduce customer effort, and gain operational efficiencies.
Presenter
Dan Michaeli, CEO & Co-Founder Michaeli is the driving force behind Glia’s vision to combine the human touch with technology to create the best customer experiences. LinkedIn
A look at the companies demoing at FinovateSpring Digital on May 10 through 13, 2021. Register today and save your spot.
CoCoNet’s fully digital onboarding software for corporate customers optimizes common processes, making them up to 66% faster and more efficient.
Features
Mapping of complex structures with many individuals and permissions
Convenient digital legitimation and signature processes
Integrated customer analytics for process improvements
Why it’s great Unlike other onboarding solutions developed for retail customers, CoCoNet’s solution is only developed for corporate customers to fulfill the specific and complex needs of this niche.
Presenters
Björn Hassing, CEO Hassing is responsible for innovation, technology, marketing, and sales. He’s been a member of the board since January 2017. He started in 2005 as an IT Architect. LinkedIn
Dennis Rochel, MD & Head of Innovations Rochel started in 2013 as Mobile Development Architect at CoCoNet. He also studied computer science and IT security. LinkedIn
A look at the companies demoing at FinovateSpring Digital on May 10 through 13, 2021. Register today and save your spot.
ArnexaBinbox is the world’s first secure messaging platform that is phishing-free.
Features
Zero phishing engenders greater trust and engagement amongst users
End-to-end encryption
Simple APIs for easy sending and receiving of messages
Why it’s great Arnexa Binbox achieves zero phishing without content scanning and analyzing sender attributes. It uses unique signals that enable it to sift phishing messages cleanly, easily, and correctly.
Presenter
Sridhar Ramakrishnan, CEO & Founder Ramakrishnan is a long-time entrepreneur having worked in several startups. He serves on the board of CA Jump$tart, an organization dedicated to youth financial literacy. LinkedIn
The Consumer Financial Protection Bureau (CFPB) made a small move with big potential today. The U.S. agency issued an advanced notice of proposed rulemaking (ANPR) that requests information from the public on how consumers’ access to their financial records should be regulated.
The CFPB is asking “all interested parties” to comment on how the agency develops regulations to implement Section 1033 of the Dodd-Frank Act, which provides for consumer rights to access financial records.
This ANPR is the first step in creating formal regulation in the U.S. around open banking. This explicit regulation around structured data access is something that the E.U. has had in place via PSD2 for nearly three years.
The open banking environment in the U.S. is slightly hostile at the moment. This is partially because of the number of stakeholders involved. Consumers want to be able to use their financial data across a multitude of third party platforms, third party fintechs want to create compelling services to help individuals manage their finances, banks want to keep their consumers’ information secure, and data access providers are in the business of opening up the data.
Over the past few years, there have been multiple instances of large banks clashing with data access providers. Unfortunately, when banks shut out data access companies, the main loser is the end consumer, who usually ends up frustrated that their bank won’t connect to their favorite new fintech app. Banks would argue, however, that they are protecting the consumer from unnecessary risk.
Today’s move by the CFPB is a monumental step because once regulation is formalized in the U.S., all players will work from a standardized approach.
If you’re interested in submitting your thoughts to the CFPB, you can do so via the Federal eRulemaking Portal at https://www.regulations.gov or you can email [email protected]. Include Docket No. CFPB-2020-0034 or RIN 3170-AA78 in the subject line.
Another day, another acquisition in the payments space: U.S. payment processor PaymentCloud announced this week that it has acquired contactless payments provider Paysley. Payment Cloud purchased the majority share of the Los Angeles, California-based company; the amount of the transaction was not disclosed.
Paysley’s technology enables customers to use their smartphone as the point of sale device – without having to set up an account with the merchant in advance. Paysley leverages QR code technology – an approach common to payments in South Africa where the company’s founders are from – to power secure mobile payments directly from the user’s card, Apple Pay, or Samsung Pay account.
And with one-click payment verification, Paysley’s solution works well with the kind of transactions that are increasingly popular in our post-COVID, gig economy, subscriber-based, P2P world.
“The future of payments is already shifting toward contactless means and now, with the acquisition of Paysley, we will be at the forefront of this shift,” PaymentCloud CEO Shawn Silver said. “I’m eager to bring this innovative solution to fruition at such a pivotal time.”
Currently in the process of relocating its 55 employees to new offices in Encino, California, PaymentCloud processes credit cards for thousands of clients around the country. The firm also works with more than 80% of the top digital independent sales organizations (ISOs) to help them boost approval rates, onboard merchants quickly, and limit attrition.
Named to Digital.com’s list of the Best Credit Card Processing Services of 2020, and ranked #295 on the Inc. 5,000, PaymentCloud was founded in 2016.
