How Empowering the Underbanked Will Create the Next Big Investment Opportunity

How Empowering the Underbanked Will Create the Next Big Investment Opportunity
By Julie Muhn (@julieschicktanz) Posted on
Categories: Guest Post

The following is a guest post by Borys Pikalov Head of Analytics and Cofounder at Stobox.

One of the greatest challenges in fintech is reaching the unbanked. Accessing poor communities is operationally complicated and their use of financial services is very limited.

Microfinancing institutions are only a partial solution and traditional loans do not work as an investment vehicle because they are risky for both parties: banks don’t want to give, and poor don’t want to take. To solve this puzzle we may use two creative concepts from financial engineering.

Individual investment contract

Instead of taking a loan, people promise part of their future income in exchange for money. This reduces the risk for farmers in case they cannot pay off the debt. This is already being practiced when corporations provide education grants to poor students in exchange for future employment.

Loan securitization

Instead of taking a single loan from banks, real estate developers issue debt securities and sell them to many institutions. Thus, the loan is divided into many small parts that may be traded on a secondary market, which spreads the risk for parties giving the credit. For conventional real estate loans, the maximum debt-to-value ratio is ~60%, while for securitized loans it is ~90%, which means that 50% higher risk is acceptable.

Personal securities

Combining these two concepts we arrive at personal securities – individual investment contracts issued in the form of securities that can be divided into small parts and traded on a secondary market. There is already an example of a personal securities offering in use: a software developer offered a part of his future income in order to move to Silicon Valley. 

The use of personal securities can solve the risk puzzle of investing in poor communities. However, there are a number of practical problems to be solved in order for personal securities to be an efficient solution. 

First of all, personal securities should be powered by proper technology. Offering many securities to many investors in dozens of different countries requires robust and scalable infrastructure. Blockchain technology is widely considered suitable for these purposes. In the last few years, providers of securities tokenization made serious progress and now enable convenient mass operations with securities. For example, the blockchain was used to reduce the entry threshold in a $22 million venture fund by 2,0000 times– from $1,000,000 to $500.

Another problem is the operational complexity. Using personal securities would require reaching poor communities, doing the legal groundwork of signing investment contracts, choosing investment opportunities, and gathering and distributing income. This requires wide collaboration between existing banking providers, governments, nonprofits, and startups. 

A solution may be to organize everything as an investment fund that would issue securities to investors worldwide and use the proceeds to organize the investment process and do the investment itself. Pooling investment into funds can further reduce the risk for investors. It is better to do pilot projects to test the best structures.

The next big investment opportunity

Giving money to poor communities is the next big investment opportunity. It would not only directly benefit investors but also all businesses that can sell to poor communities. It can vastly improve the financial outcomes of developing countries. Most importantly, it can assist in finally ending extreme poverty and providing people with a dignified life.

Borys Pikalov is Cofounder and Head of Business Analytics at Stobox, an award-winning advisory and technology company in the field of securities tokenization. Pikalov has done 2500+ hours of research in the digital securities industry. Co-author of the book “How to Attract Investments with STO: A Practical Guide”. He is currently advising the government of Ukraine about developing an ecosystem for virtual assets.

Photo by Katrine Bengtsson on Unsplash

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PayActiv Receives $100 Million in Funding for Earned Wage Access Tech

PayActiv Receives $100 Million in Funding for Earned Wage Access Tech
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding, PayActiv

Earned wage access startup PayActiv closed $100 million today for its technology that helps companies offer their employees their pay on a daily basis rather than wait for their bi-weekly paycheck.

The Series C round was led by Eldridge and includes existing investors Generation Partners and the Ziegler Link•Age Fund II. The investment brings PayActiv’s total funding to $134 million.

The company will use the funds to expand its client base, which currently consists of 1,400+ businesses and organizations representing more than four million employees. Walmart, Wayfair, and Ibex Global are some of the major employers in PayActiv’s portfolio.

“American families are facing more financial stress than they have in generations,” said PayActiv CEO and Co-Founder Safwan Shah. “The timing gap between work and wages is the main reason workers get hit with punitive late fees, overdraft fees and other penalties. Cumulatively, these fees reduce wages by seven percent every month. The PayActiv platform is the only system where everyone wins: employers lift worker morale with little to no cost and huge dividends; employees get wages when they actually need them most; and cash re-enters the economy faster, making communities financially healthier.”

PayActiv was founded in 2011 and has emerged as a major financial wellness tool for employers. In addition to offering flexibility around how frequently employees receive payment, PayActiv also gives employees multiple options of how they receive payment. Workers can opt for direct cash pickup, a PayActiv prepaid card, an instant Visa or Mastercard debit card load, an ACH payment, or use their wages to pay bills, make purchases on Amazon, or purchase rides on Uber.

The company also offers financial wellness and planning tools that help employees to save, budget, and manage their money. Additionally, PayActiv announced today that it will offer employers a retirement benefit in partnership with Security Benefit, a retirement services provider based in Kansas.

Demand for earned wage access tools are on the rise, especially in today’s post-COVID economy. Sending employees their paychecks on a daily basis can help them avoid overdraft fees and high interest financing options such as payday loans and credit card debt.

“The future of pay is not a two-week cycle,” said Eldridge Co-founder, Chairman, and CEO Todd Boehly. “By simply giving people access to their wages as they earn them, PayActiv increases the velocity of money, stimulating the economy and serving employers and employees by driving costs down and efficiencies up.”

Photo by DISRUPTIVO on Unsplash

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Financial Wellness: How the Digital Shift In Asia Has Created Opportunities to Better Serve The Underserved

Financial Wellness: How the Digital Shift In Asia Has Created Opportunities to Better Serve The Underserved
By Charlie Burgess Posted on
Categories: FinovateAsia Digital 2020

Mario Aquino, Founder and Managing Partner of FutureLabs Ventures, looks back at FinovateAsia Digital, and the panel on Financial Wellness: How the Digital Shift In Asia Has Created Opportunities to Better Serve The Underserved, to share his key takeaways and thoughts for the future of financial wellness.

Last month I joined a distinguished panel of speakers, including Ryan Jonghoon Kim (Group Chief Digital Officer, FWD Insurance), Lotte Schou Zibell (Regional Director, Asian Development Bank (ADB), Ankit Shrivastava (Director Digital Product, Aegon Asia), Yinglan Tan (Founding Managing Partner, Insignia Ventures Partners), and Amran Hassan (Chief Executive Officer, Etiqa Insurance and Takaful). We explored 4 questions:

  1. What does financial wellness and serving the underserved mean to each organisation?
  2. What are the latest exciting innovations across the payments/remittance, lending and insurance landscapes?
  3. What are the key challenges to increase adoption of new solutions (including having a financial identity, financial literacy) and what is the impact of Covid on this?
  4. Where are the next big opportunities and areas of impact? — as the focus moves from remittances to lending & insurance solutions and, even more broadly, goes beyond financial services to include HealthTech, EduTech & ESG solutions that benefit the underserved.

It is not my intent of this article to reiterate the full content of our session, instead I would like to focus on sharing my 3 key takeaways about Asia, the diversity and nuances it presents.

1. A quarter of a trillion in new GDP value can be created through the scale of the unbanked opportunity available in Asia

The scale of opportunity to better serve the underserved is enormous. There are 1.7B (30%) unbanked adults globally, out of which 2/3 of them own a mobile phone that could access financial services. 658M of the unbanked population live in Asia. 200M of them are expected to join an exponentially growing middle class by 2030. To provide a sense of scale of the opportunity that lies ahead, it can be estimated that if a portion of this population is converted to a banked population, a quarter of a trillion in new GDP value can be created. At FutureLabs Ventures, serving the underserved is one of our three megatrends we focus on — we call this “serving the next 1 Billion” – which is a tremendous opportunity to do well by doing good.

“Serving the next 1 Billion” – can be a great way to do well by doing good.

While the opportunity is incredibly big, there are no doubt various challenges to unlock it. These range from reaching the unbanked (especially where there is no electricity), financial identity and literacy, to fraudulent activities. One of the areas that is being widely studied by Aegon Asia, a financial services company, as shared by Ankit, is the right ecosystem to reach the unbanked, and a question being asked is ‘would digital or physical solutions be more effective for this group?’. That being said, the increase in smartphones is making access easier — and it is a trend that is only going to improve.

2. Covid-19 is a great catalyst to change consumer behaviours and leverage on the help of a broader ecosystem to create effective solution for the underserved

A significant shift in consumer behavior has been seen as a result of Covid-19, primarily in the adoption of digital non-cash payments. During the initial outbreak period, the World Health Organisation (WHO)
came up with guidelines encouraging contactless payments as a measure to curb the spread of the virus. The psychological fear set in created more willingness in merchants to accept non-cash payments and use channels such as Instagram, QR Pay, E-wallets while absorbing any transaction cost for the transfer.

In our panel discussion, Amran confirmed that in markets like Malaysia, he believes this consumer behavior will stick as merchants realize the benefits from digital payments. But, in order for these consumer behaviors to continue to be adopted by the unbanked/underserved, a concerted collaboration among all ecosystem players is needed — central banks, governments, fintechs and large corporates — in order to bring to market targeted solutions that address real pain points and are interoperable. As Lotte well emphasised during our conversation, there are two critical aspects to be addressed in the process. Firstly, the basic rails for financial access – from digital identity to financial literacy; and secondly, interoperability and data protection need to be integrated right from the outset to encourage broader adoption and impact vs. the proliferation of an sub-scale set of individual solutions that don’t work with each other. If we are able to achieve this broader ecosystem collaboration, we would have put the setting for real impact at scale — where individual creativity and entrepreneurship is encouraged, but within an ecosystem that allows scale, competition as well as collaboration.

3. Financial Inclusion is not a means to an end, but rather a means to create access to Healthcare, Education and other Services

Financial access has a key role to play in day-to-day living and facilitating individuals in everything from long-term goals to unexpected emergencies. Overtime, individuals with financial access are more likely to use the access to invest in education, health, weather financial shocks and improve their overall quality of life.

As Ying Lan also shared, I truly believe there is an ever greater realization and awareness of the consequent positive effects that financial inclusion in Asia can create. These are new and sizeable customer segments that can generate new business opportunities for corporates and start-ups.

It would be wonderful to continue to see a high and close collaboration among all ecosystem participants — entrepreneurs, investors, banks, corporates and large tech firms — to unlock these opportunities and to do well while doing good!

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Alliance in the Americas: Constellation Software Acquires Infocorp

Alliance in the Americas: Constellation Software Acquires Infocorp
By David Penn Posted on
Categories: Finastra, Finovate Global, InfoCorp

The decision by Canada’s Constellation Software to acquire Uruguayan technology firm – and Finovate alum – Infocorp earlier this year is a reminder of the vibrancy of the fintech ecosystems thriving in the countries to the north and south of the U.S. The acquisition was completed in June via Constellation Software’s U.S.-based subsidiary Aquila.

“We have been looking for a partner to support us as we move to our next level of experience for our clients,” InfoCorp CEO Ana Inex Echavarren said. “We are excited to join Aquila and the Constellation family as they believe in long-term relationships, and the ‘buy and hold forever’ approach supports us in our focus on long term growth with our clients.”

Montevideo-based InfoCorp offers its customers an omnichannel banking platform that leverages the latest advanced technologies – conversational AI, machine learning, voice recognition, and chatbots – to build solutions to better engage and serve financial services customers. With clients such as Banco Santander, Banco de Bogota, Banco Internacional, and Towerbank, the 25+ year old company made its Finovate debut in 2017, demonstrating its marketing and commercial actions orchestrator platform that enables more agile, personalized, marketing campaigns that lead to higher conversion rates and ROI.

“InfoCorp has an inspiring focus on their clients,” Aquila CEO Mike Byrne said. “To produce solutions that connect the banks with their clients is such a deep passion for the team at InfoCorp. We are really looking forward to working with the group.” Operations at InfoCorp will remain the same, post-acquisition, with Echavarren continuing as CEO and the company keeping its client portfolio and offices. InfoCorp has 250+ workers in its development and innovation centers in Santiago de Chile, Montevideo, and Colonia.

In fact, the company announced last month that it is looking to expand into both Mexico and Argentina in the wake of the acquisition, with potential expansion to Europe, Canada, and the U.S., as well. Echavarren told BNamericas that the company is currently growing at a rate of 40% to 50% a year over the past five years and is looking at investments to power Infocorp’s ability to enter bigger markets.

The fintech ecosystem in Uruguay is often overlooked compared to the fintech industries in other Latin American nations such as Mexico and Brazil – both of which Uruguay borders. With a population of approximately three and a half million, the country is the second smallest in South America and gets high marks on a number of metrics including democracy, low perception of corruption, and e-government. Uruguay is regarded as a “high-income country” by the United Nations.

In its look at fintech in Uruguay, Contxto highlighted a baker’s dozen of companies that are not only growing regionally, but moving closer to expansion worldwide. The feature divides the country’s fintech industry into five components: payments, exchange, open banking, investments, and what it calls “fintech enterprise services (FES).” This primarily involves providing fintech solutions to online financial services companies.

Here is our look at fintech around the world.

Sub-Saharan Africa

  • A partnership with Standard Chartered Bank will enable Airtel Africa to build its fintech business and help support financial inclusion.
  • South African digital banking platform provider Ukheshe earns finalist spot in the 2020 Ecobank Fintech Challenge.
  • ThisDayLive features VC investor Ameya Upadhyay on the challenge of startup development in Africa.

Central and Eastern Europe

  • Fintech Futures takes a look at financial inclusion in Russia.
  • Poland’s mPay teams up with iDenfy to bring biometric facial recognition and other identity verification technologies to its mobile payments platform.
  • Romania’s PayByFace brings its biometric facial recognition technology to Up Romania cardholders, enabling biometric purchases as participating stores and restaurants.

Middle East and Northern Africa

  • CIH Bank of Morocco partners with Finastra for a remote implementation of the company’s Fusion Corporate Channels and Fusion Trade Innovation systems.
  • Cairo, Egypt-based payments-as-a-service fintech Paymob raises $3.5 million in funding.
  • National Bank of Oman enables cardless ATM transactions.

Central and Southern Asia

  • MEDICI featured Indian regtech startup Signzy in its RegTech Top 21 Startups for 2020 roster. Signzy is the only Indian regtech to make the list.
  • Reserve Bank of India announces offline digital payments pilot project.
  • JCB International and PJSCB Orient Finans initiate merchant acquiring operations in Uzbekistan.

Latin America and the Caribbean

  • Mexican lending platform Creze raises $12 million.
  • Rapyd partners with PayMyTuition to boost the company’s ability to accept bank transfer-based payments from countries in Latin America and the Asia Pacific region.
  • WorldRemit teams up with a pair of Mexican neobanks, albo and Klar.

Asia-Pacific

  • Ayoconnect, a billpay network based in Indonesia, raises $5 million in pre-Series B funding.
  • Southeast Asian fintech TrueMoney teams up with cross-border payments firm Thunes to expand its remittance business.
  • Vietnamese digital banking platform Timo announces new partnership with Viet Capital Bank.

Top image designed by Freepik

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Who’s Demoing at FinovateFall Digital?

Who’s Demoing at FinovateFall Digital?
By Tyler Ferst Posted on
Categories: Finovate, Finovate Marketing, FinovateFall 2020

Digital experience | Agenda | Speakers | Apply to demo | Register now

This is probably not your first time hearing about Finovate’s commitment to digital — digital finance, digital innovation, digital events. But it’s likely your first time seeing the FinovateFall Digital demoing companies. All selected because the future of finance is digital, and they are ready to transform your business.

Here’s a look at the demoing companies already confirmed for this year from across the US:

These companies’ products and solutions have been developed (and selected) to meet your business needs from all sides:

  • Unlock sensitive data in complete compliance
  • Meet small business needs with a 360° commerce solution
  • Deliver actionable insights to drive better behavior
  • Connect employees with an easy-to-understand retirement plan
  • Optimize debt recovery and collection
  • Monitor the overall health of your small business customers
  • Equip your employees with reliable AI-generated next steps
  • Transform your legacy systems to meet today’s banking needs
  • Invest in mobile payments because over 60% of the world’s populace uses cell phones
  • And see how you stack up against other banks, fintechs, and techs

See these companies live next month! Book this week for $795 (a $400 saving).

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Innovating in a World of Exponential Change

Innovating in a World of Exponential Change
By Julie Muhn (@julieschicktanz) Posted on
Categories: FinovateFall 2020, Speaker series

Describing the opportunity to use AI to create tools and solutions that make society better off, Pablos Holman (pictured right) said, “we get the chance to work for the humans yet to come.”

I like the way of looking at a controversial technology in such a positive light. Instead of focusing on the potential of AI to displace us at our jobs or make our lives unfair in some ways, maybe it is better to examine how we can use AI to craft products, technologies, and services that make our world better to live in.

To do this we need to ask ourselves and the community we work in, “All of this technology is in our hands, what do we want to accomplish with it?” It’s important to ask questions like these in the fintech sector, so that the industry can control how we use new technologies such as AI. As Holman puts it, “Speculate about the possibilities, focus on the positives.”

Holman is a hacker, inventor, entrepreneur, and technology futurist who is on a quest to solve the world’s problems through the innovation of technology. He will be the keynote speaker kicking off FinovateFall on September 14, offering his thoughts on innovating in the post-COVID landscape.

He is certainly a speaker you won’t want to miss. Holman has helped build spaceships; the world’s smallest PC; artificial intelligence agent systems; and the Hackerbot, a robot that can steal passwords on a Wi-Fi network. He is a world-renowned expert in the fast moving 3D printing space, and is currently working on printing the food of the future among other things.

Holman will discuss some of the invention projects under way at the Intellectual Ventures Lab, and their efforts to create an Invention Capital market. He will also be showing off some of the super powers that hackers possess.

FinovateFall Digital will run September 14 through 18 and will be broadcast live in Eastern Standard time. There’s still time to register (at a discount!) so take advantage and book your ticket today.

Photo by Sinjin Thomas on Unsplash

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Facebook Launches New Payments Group: Facebook Financial

Facebook Launches New Payments Group: Facebook Financial
By David Penn Posted on
Categories: Daily news

Led by David Marcus, co-creator of Facebook’s cryptocurrency project Libra, Facebook Financial is the social media giant’s latest effort to enhance the company’s payments initiatives.

Facebook has not made an official announcement about Facebook Financial – referred to internally as F2. Reporting at both MarketWatch and Bloomberg suggests that the new unit will also feature Stephane Kasriel as payments vice president. Kasriel comes to the project from Upwork, where he was CEO. Marcus currently runs Novi, a division of Facebook that is developing a digital wallet for Libra, and will continue in that capacity as Novi moves under the F2 umbrella.

“We have a lot of commerce stuff going on across Facebook,” Marcus told Bloomberg earlier this week. “It felt like it was the right thing to do to rationalize the strategy at a company level around all things payments.” Notably, Marcus has significant payments experience, having been PayPal president from 2012-2014.

Facebook Financial will also handle WhatsApp Pay, recently launched in Brazil, and Facebook Pay, the social media platform’s e-commerce payment system. Engadget’s reporting on the conversation surrounding the new division noted that Facebook sees unifying payments on its different platforms as key to boosting value for advertisers and increasing in-app transactions.

The discussion over Facebook Financial comes just a week after the firm announced another e-commerce-friendly initiative: a Commerce Accelerator that will partner with 60 startups from countries in Europe, the Middle East, Africa, and Latin America to help build out Facebook’s online marketplace.

“In this critical time, Facebook is doubling down on commerce and accelerating its work to enable every business to sell online and help people gain inspiration and discover and buy the products they love. We can’t achieve this alone,” the company announced in a blog post, “so we are looking for startups to build technology with us.”

Zuckerberg himself has praised the role of payments in Facebook’s future. In a recent earnings call, the Facebook CEO noted that “as payments grow across Messenger and WhatsApp, and as we’re able to roll that out in more places, I think that that will only grow as a trend.”

Photo by cottonbro from Pexels

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Yapily Ever After: American Express Facilitates Bank Transfers in European Markets

Yapily Ever After: American Express Facilitates Bank Transfers in European Markets
By Julie Muhn (@julieschicktanz) Posted on
Categories: American Express, Daily news

Have you ever heard of open-banking-infrastructure-as-a-service? American Express has, and it has tapped U.K.-based Yapily as the provider.

The open banking infrastructure company has signed an agreement with American Express to take the financial service giant’s open banking payment initiation product, Pay with Bank Transfer, to select European markets. Yapily’s API will enable Amex’s end users to complete a payment without being redirected to a different channel or website.

Pay with Bank Transfer is self-explanatory– it leverages open banking to enable users to transact via bank transfer. The payment method uses biometric authentication and instant payment APIs for faster, more simple, and secure payments.

“The partnership is the first real step to bringing open banking payments to everyone across Europe and the U.K.,” said Yapily CEO and founder Stefano Vaccino. “Now, a significant number of international merchants will finally be able to access, and benefit from, an open banking API.”

Yapily was founded in 2017 to help financial service providers leverage the open banking opportunity by connecting them with banks. The company enables its clients to access data in 15 countries across Europe, and at more than 180 financial institutions. Yapily has raised $18.4 million.

Photo by Jan Tinneberg on Unsplash

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Top Ten Fintech Hires of 2020 … So Far

Top Ten Fintech Hires of 2020 … So Far
By David Penn Posted on
Categories: Dwolla, List series, MasterCard, Signicat

This week’s announcement that Stripe had hired former General Motors Chief Financial Officer Dhivya Suryadevara as its own new CFO is a reminder that the hunt for top talent in fintech has never been hotter. As tech titians and financial services giants embrace fintech solutions, the pressure to find the most effective leaders, the most insightful technologists, and other key executives is forcing companies to up their game when it comes to attracting the best of the best.

With that in mind, here are another nine companies who in 2020 have done just that: made a major, C-suite addition to their leadership ranks that should help propel their respective companies to the next level.

Nicolas Weng Kan – Yolt CEO – news. Former Google Compare CEO Kan took the helm of ING’s smart money app, Yolt, as well as Yolt Technology Services (YTS), a provider of open banking services in Europe last month. Yolt won Best Personal Finance App at the Wealth & Finance FinTech Awards earlier this month.

Anna Manz – London Stock Exchange CFO – news. The London Stock Exchange has a new Chief Financial Officer as former Johnson Matthey CFO and executive director Anna Manz succeeds David Warren, who had held the position since 2012. Prior to her time at Johnson Matthey, Manz spent more than 16 years in executive roles with Diageo.

Lucy Hagues – Capital One UK CEO – news. Hagues, who spent three years as Chief Marketing Officer at Capital One UK and is an alum of the firm’s graduate program, replaced outgoing CEO Amy Lenander. Hagues is the first program graduate to reach the CEO’s office.

Nkihil Rathi – Financial Conduct Authority CEO – news. Appointed CEO of the FCA at the age of 40, U.K. head of the London Stock Exchange Rathi is the first member of an ethnic minority to lead the regulatory body.

Steven van Rijswijk – ING CEO – news. ING Chief Risk Officer Steven van Rijswijk is the company’s latest CEO. He took over for outgoing Ralph Hamers who is headed toward a CEO post at UBS. Van Rijswijk’s promotion comes after 25 years of service at the bank.

Brady Harris – Dwolla CEO – news. Former President of payment solution provider Payscape, Harris was tapped by Dwolla founder Ben Milne to lead the company this spring. Milne praised Harris for helping lead Payscape’s merger with Payroc, “creating a full-service payment powerhouse that operates in 46 countries.”

Michael Miebach – Mastercard CEO – news. “Putting products first” might be one way to describe Mastercard’s decision to replace its outgoing CEO Ajay Banga – who is transitioning to the role of executive chairman – with the company’s chief product officer Michael Miebach. A 10-year Mastercard veteran, Mieback is credited for being a “key architect” of the company’s “multi-rail strategy.”

Hironori Kamezawa – MUFG CEO – news. The appointment of Kamezawa as Chief Executive Officer of Mitsubishi UFJ Financial Group was a bit surprising, insofar as the outgoing CEO has only been in place for a year. But observers speculated that Kamezawa’s leadership will likely mean a broader and more aggressive embrace of fintech by the company.

Asger Hattel – Signicat CEO – news. A new year, a new CEO for the Denmark-based digital identity solution provider as former CEO and Head of Nets Merchant Services Asger Hattel took leadership of Signicat in January. Hattel replaces company co-founder Gunnar Nordseth, who will remain as a shareholder and help support business development.

Photo by Sebastian Voortman from Pexels

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Blend Boosts Valuation to $1.7 Billion After New Funding Round

Blend Boosts Valuation to $1.7 Billion After New Funding Round
By Julie Muhn (@julieschicktanz) Posted on
Categories: Blend, Daily news, Funding

Mortgagetech has historically been one of the last sectors of fintech to see innovation. However, with digitization en vogue because of COVID-19, there has been an uptick in interest in companies looking to make closing on a home mortgage easier.

As evidence, U.S.-based Blend is gaining attention today for a fresh round of funding and a new valuation. The company landed $75 million in Series F funding, bringing its total raised to $365 million and increasing its valuation to almost $1.7 billion.

The round was led by Canapi Ventures. Existing investors Temasek, General Atlantic, 8VC, Greylock, and Emergence also participated.

“Financial institutions have traditionally taken time to modernize legacy systems, but digital is now table stakes. Shelter in place and social distancing mandates have forced banks and other lenders to accelerate digital transformation plans from years to months,” said Jeffrey Reitman, a partner at Canapi Ventures. “Blend is at the forefront of this innovation, offering flexible digital solutions to help lenders like Wells Fargo, U.S. Bank, Truist, M&T Bank, and other key regional banking institutions meet their accelerated timelines and their customers’ changing needs.”

Blend, a banking-as-a-service company that aims to create a “less stressful, more accessible lending experience,” will use the funds to expand its products and broaden its strategy. Specifically, Blend will likely bolster the consumer banking and auto loans offerings it launched late last year.

“Our goal is to deliver software that gives lenders the flexibility to meet the evolving needs of consumers,” said Marc Greenberg, head of finance at Blend. “We’re committed to being the digital layer that enables millions of people to gain access to the capital they need, while helping our customers be there as trusted advisors for every milestone in a consumer’s financial journey.”

Among Blend’s new launches this year are a digital closing solution for mortgages and home equity loans, a mobile app for loan officers, and new reporting tools for lenders. Since the start of 2020, Blend has brought on 130+ new employees and helped its bank clients process more than $771 billion in consumer loans– over $3.5 billion each day.

Photo by Irina Murza on Unsplash

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Women in Fintech: Dhivya Suryadevara Named New Stripe CFO

Women in Fintech: Dhivya Suryadevara Named New Stripe CFO
By David Penn Posted on
Categories: Daily news, Women in Fintech

In the latest example of the New Economy leveraging the best of the Old Economy, online payments innovator Stripe (founded 2010) announced that it has hired Dhivya Suryadevara as its new Chief Financial Officer. Suryadevara will leave her position as CFO for General Motors, a company that was founded in 1908.

“Dhivya is a rare leader who has run an industry-leading leviathan but also gets excited about enabling the brand-new products and the yet-to-be invented products, too,” Stripe co-founder John Collison said in a statement. “She has the expertise and the instincts to help steer Stripe through our growth in the years ahead.”

This image has an empty alt attribute; its file name is Dhivya_Suryadevara_Stripe.png

More than just the corporation’s most recent CFO, Suryadevara was a long-time General Motors veteran. She joined the company’s Treasurer’s Office as a Senior Financial Analyst in 2004, and became the Chief Investment Officer and CEO of GM Asset Management by 2013. Appointed Vice President of Corporate Finance for General Motors in 2017, she was named CFO a year later. Suryadevara was educated at the University of Madras and earned an MBA from Harvard Business School.

As CFO for General Motors, Suryadevara oversaw financial operations involving more than $100 billion in annual revenue. She was credited for providing leadership in capital allocation decision-making, and for “spearheading numerous strategic transactions for the company.”

“I am very excited to join Stripe at a pivotal time for the company,” Suryadevara said. “Stripe’s mission to increase the GDP of the internet is more important now than ever.” She emphasized her enjoyment of “leading complex, large-scale businesses” adding that she hopes to “accelerate Stripe’s already steep growth trajectory.”

News of the new CFO encouraged some speculation that Stripe may be readying for an initial public offering. Company co-founder John Collison had said this is not the case.

Suryadevara’s hire comes shortly after Stripe made another major appointment: bringing on Mike Clayville as Chief Revenue Officer. Clayville arrives at the company having served as Vice President of Worldwide Commercial Sales and Business Development at Amazon Web Services (AWS).

In other recent Stripe news, the company announced that it was expanding its partnership with Jobber, a home service management provider that will leverage Stripe Capital to help its partner businesses get the financing they need to grow. Last month, Stripe teamed up with Irish online marketplace DoneDeal, enabling sellers on the platform to use Stripe for secure, contactless transactions.

San Francisco, California-based Stripe has raised $1.6 billion in funding, including $600 million announced in April as part of a Series G round that began last fall.

Photo by Kelly Lacy from Pexels

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Get Wise: Business Banking Gains a New Challenger

Get Wise: Business Banking Gains a New Challenger
By David Penn Posted on
Categories: Alumni profile, Wise

Whatever benefits the challenger bank revolution may bring to retail banking customers, the opportunities these neobanks provide to small businesses may be even more significant. In fact, there is a growing cadre of digital-first challengers who have decided to put innovating on behalf of small business banking at the top of their priorities.

One such company is Wise, a BBVA-backed challenger based in San Mateo, California, that announced the release of its premium checking account in the U.S. this week. The new offering, available for $10 a month, enables businesses to earn up to 1% APY on deposits through a combination of a 0.5% base APY and an additional 0.1% for every $1,000 purchase using a Wise debit card. Accountholders get 25 free ACH deposits and 25 free outgoing bank transfers a month, as well as additional payments services. Among the functionalities to be added are remote check deposit, the ability to send digital checks and international wires, and support for Quickbooks.

The new offering comes in the wake of the company’s first major fundraising: a $5.7 million seed round in April led by Base10 Partners and featuring the participation of several other investors including Abstract Ventures and Backend Capital. The company told TechCrunch earlier this year that it has 1,000 business customers, with average workforces ranging from 2 to 10 employees, and “between $500,000 and $5 million in ARR (annual recurring revenue).”

Finovate audiences met Wise last year when the company made its Finovate debut at our September conference in New York. At the event, Wise co-founders Arjun Thyagarajan (CEO) and Suresh Venkatraman (CTO) demonstrated the company’s “small business banking-in-a-box” solution, and previewed additional products and services for small businesses including payments and invoicing.

From left: Wise co-founders Arjun Thyagarajan (CEO) and Suresh Venkatraman (CTO) at FinovateFall 2019.

Thyagarajan founded Wise after a stint managing product for Mojio, a platform for connected cars. Before that he was a classic serial entrepreneur, launching a personal organizer (LivingOrganized), and a pair of password management platforms (TeamsID and Gpass). But a sense that he wasn’t “doing what I really wanted to do” led him to leave the “hot startup” in search of what he called “problems that needed solving.”

“My explorations led me to FinTech and I was pleasantly surprised with the rapid advancements in technology transforming the financial industry, especially in banking and payments,” Thyagarajan wrote on the company blog last summer, looking back on his decision to launch Wise. “It got me thinking: what if we could build a banking product that can deliver on the promise of putting the customer first … And solving real world problems.”

Thyagarajan’s reflections are similar to those his co-founder Venkatraman, who in a companion post observed that Wise’s own experience as a small business trying to secure quality banking services was vindication of the company’s mission.

“The day started innocently enough as we walked into a local bank with all our paperwork in hand,” he wrote. “That was the beginning of a chase around Silicon Valley to find a bank that would take our money and open up an account. Banks would reject us for all sorts of reasons or just ignore us.”

These days, with an new offering, a big investment and a major banking partner in BBVA in hand, it looks like the fintech world might be ready to wise up.

Photo by Jean van der Meulen from Pexels

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