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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
The regulatory landscape for companies innovating in fintech and financial services is complex and ever-changing. Whether a company is developing solutions in the crypto space or seeking to take advantage of the opportunities in open banking, open finance, or Banking-as-a-Service, a comprehensive understanding of the regulatory environment is critical for success.
In its latest series of video conversations from our sister publication Fintech Futures, Fintech Founders interviews six industry professionals – all Founders and Co-Founders – to hear from them what they believe will be the biggest regulatory challenges for fintech start-ups in the coming years.
Check out our conversations on compliance in fintech and financial services featuring:
Cloud banking services provider Blend raised $150 million in new funding from PE firm Haveli Investments.
The investment comes in the form of convertible preferred stock with a zero percent coupon.
Blend Labs is an alumni of both FinovateSpring and our developers conference FinDEVr Silicon Valley, presenting at both events in 2016.
Cloud banking services provider Blend has secured an investment of $150 million from technology-focused private equity firm Haveli Investments.
The investment comes in the form of convertible preferred stock with a zero percent coupon. Blend will use most of the capital – approximately $145 million – to repay amounts payable under its current credit agreement. The remainder of the investment will be used for general corporate purposes. Overall, the investment is designed to fortify Blend’s financial position and balance sheet, paving the way for long-term growth and value creation.
“This partnership with Haveli reflects confidence in Blend’s continued journey to transform financial services and is an important show of faith in our growth strategy,” Blend Co-founder and Head Nima Ghamsari said. “We look forward to working with Haveli to advance our goal of driving innovation in the space and delivering lasting value for our customers and shareholders.”
Blend made its Finovate debut at FinovateSpring in 2016. The company returned to the stage later that year to demo its technology at our developers conference, FinDEVr Silicon Valley. In the years since, Blend has grown into a major cloud banking services provider helping financial services firms process $1.7 trillion in loan applications in 2022, and capturing more than 23% of mortgage market share in the second half of that year. So far in 2024, Blend has forged partnerships with Fannie Mae, Randolph-Brooks Federal Credit Union, Citizens Bank, and Michigan Schools and Government Credit Union (MSGCU).
As part of this week’s investment, Brian Sheth, Chief Investment Officer with Haveli Investments will join Blend’s board of directors. In a statement, Sheth praised the company as a market leader in providing mortgage and consumer banking software for banks, credit unions, and other lenders. “We have known the Blend team for several years and have been impressed with their innovation and vision,” Sheth said. “With a blue-chip customer base and an improved balance sheet, we believe Blend is well positioned to succeed with its modern, next-gen platform.”
Permira has acquired a majority stake in behavioral biometrics company BioCatch.
Existing shareholders, Sapphire Ventures and Macquarie Capital, have also increased their stake in BioCatch.
The moves have boosted BioCatch’s valuation to $1.3 billion, which is up from $1 billion last year.
Behavioral biometrics company BioCatch announced it has a new majority shareholder. Permira Growth Opportunities II, a fund advised by U.K.-based global private equity firm Permira, has acquired a majority stake in the Israel-based company by buying out shares from Bain Capital Tech Opportunities and Maverick Ventures in a secondary transaction.
Two of the company’s existing shareholders, Sapphire Ventures and Macquarie Capital, have also increased their stake in BioCatch. While specific terms of the transactions were not disclosed, the company’s valuation is now estimated at $1.3 billion.
BioCatch expects the move will help it accelerate its product roadmap and support its growth in general. The increased commitment from Permia will also aid BioCatch’s global expansion efforts. Specifically, the fraud prevention company will leverage Permia’s Continental European ties, with an aim to add new clients in that region.
“After building a strong partnership with Permira over the last year, we are delighted to welcome them as majority shareholders,” said BioCatch CEO Gadi Mazor. “The firm’s impressive experience within technology and cybersecurity, combined with their scale, global network, and our close working relationship, has been invaluable since their initial investment.”
BioCatch was founded in 2011 and has since raised around $324 million in disclosed funding. The company leverages behavioral biometric intelligence to offer account opening fraud detection, mule account detection, account takeover protection, customer authentication solutions, and more. BioCatch currently has more than 190 financial institution customers across the globe, including over 30 of the world’s largest 100 global banks.
Today’s announcement comes a year after BioCatch earned $1 billion following a $40 million investment from Permia. The move made Permia a significant minority shareholder in BioCatch, right behind Sapphire Ventures and Macquarie Capital.
“We have tracked BioCatch with enthusiasm for many years, and now having been a shareholder since early 2023, our conviction in the business, its growth potential, its technology leadership, and its management team continues to grow,” said Permia Growth Opportunities Partner and Co-Head Stefan Dziaski. “We’re excited to become the company’s majority shareholder and look forward to a continued successful partnership with Gadi and the BioCatch team as we seek to further accelerate growth and expansion in the years to come.”
A look at the companies demoing at FinovateSpring in San Francisco on May 21 and 22. Register today using this link and save 20%.
Cardlay Payment Solutions
Cardlay Payment Solutions’ white-label card and expense management product, Cardlay Expense, delivers an exceptional, real-time experience for card users.
Features
A fully bank-integrated, real-time product that helps banks provide corporate card clients a highly competitive user experience.
Who’s it for?
Banks, card issuers, fleets, other payment providers, and small, midsize and large corporations.
Foresight
Foresight is the operating system for the private market. Their software makes sourcing, diligence, and portfolio management data driven.
Features
Finds the right company to lend to, invest in, or buy
Makes diligence smarter and faster
Sees and models portfolios in real-time with all data integrated
Who’s it for?
Venture capital and private equity firms, commercial banks, pension funds, M&A advisors, and corporate development teams.
Transvision Solutions
Transvision Solutions is a tech firm specializing in AML solutions and analytics consulting. They offer advanced software to global financial institutions, focusing on combating financial crimes.
Features
Detects unusual activity efficiently using advanced analytics
Ensures compliance with real-time alerts and reporting
Reduces compliance costs by 30% minimum and increases efficiency
Who’s it for?
Banks, payment service providers, money service businesses, lending firms, law firms, credit unions, insurance companies, and retail organizations.
TruStage
Payment Guard by TruStage is a first-of-its-kind insurance solution built for digital lenders, designed to attract more borrowers and build more resilient loan portfolios.
Features
Attracts more borrowers
Strengthens loan portfolios
Reduces time spent on collections
Who’s it for?
Digital lenders.
ZimpleMoney
ZimpleMoney makes private lending simple between families, friends, and businesses, while empowering banks and credit unions with added visibility and control.
Features
Improves customer satisfaction
Increases account retention
Creates new channels for non-interest revenue and deposit growth
Who’s it for?
Banks, credit unions, and any business or other private party extending financing to their borrowers, customers, tenants, friends, or family.
This year FinovateSpring will feature eight startups that are winners of our Sustainability & Inclusion Scholarship program. The program is designed to showcase underrepresented founders and startups who are creating innovative solutions to combat climate change, promote diversity, and create financial inclusion.
To be eligible for the Finovate Sustainability & Inclusion Scholarship program, fintech and technology companies must have less than $7 million in funding. There are five categories in the program: environmental, social, governance, BIPOC founded/owned, and female-founded/owned.
Here are the Sustainability & Inclusion Scholarship winners for FinovateSpring 2024:
Blee – Scholarship winner in the Governance category. Headquartered in New York and founded in 2022, Blee helps organizations move to market quicker while increasing revenue and minimizing compliance risk. LinkedIn.
Endaoment – Scholarship winner in the Social category. Headquartered in San Francisco, California and founded in 2020, Endaoment empowers nonprofit organizations to accept donations in crypto and stock without having to accept the asset directly. LinkedIn.
Instarails – Scholarship winner in the Female Founded/Owned category. Headquartered in Alpharetta, Georgia and founded in 2022, Instarails enables banks and other organizations to offer instant, inexpensive, and inclusive payments to boost revenue, generate growth, and pave the way for entry into new markets. LinkedIn.
Kobalt Labs – Scholarship winner in the Female Founded/Owned category. Headquartered in New York, NY, and founded in 2023, Kobalt Labs helps fintechs and financial institutions accelerate and strengthen third-party diligence, facilitating revenue-generating partnerships and improving operational efficiency – without increasing headcout. LinkedIn.
LiquidTrust – Scholarship winner in the Female Founded/Owned category. Headquartered in Los Angeles, California, and founded in 2019, LiquidTrust enables banks to offer an improved customer experience to their business customers, grow non-interest bearing deposits, and generate additional revenue. LinkedIn.
Nav.it – Scholarship winner in the Female Founded/Owned category. Headquartered in Seattle, Washington, and founded in 2019, Nav.it integrates with existing HR systems to help organizations grow their businesses by enhancing employee financial wellness. LinkedIn.
Parlay Protocol – Scholarship winner in the Female Founded/Owned category. Headquartered in Alexandria, Virginia, and founded in 2022, Parlay Protocol offers technology that boosts the odds that an applicant will secure access to small business funding while helping banks gain new customers and attract new borrowers. LinkedIn.
Remynt – Scholarship winner in the BIPOC Founded/Owned category. Headquartered in San Francisco, California, and founded in 2022, Remynt helps creditors achieve higher recoveries and recapture defaulted consumers as customers as their financial position improves. LinkedIn.
FinovateSpring (May 21-23) is only a few weeks away! Take advantage of big early-bird savings on your registration when you buy your ticket by May 10.
Challenger bank Lunar raised $25.7 million (€24.1 million) in funding, boosting the company’s total raised to around $512 million.
Lunar plans to use today’s funds to expand on its basic package offered to Swedish residents to become a more full-service bank.
In 2023, Lunar reached 850,000 customers, marking an increase from 700,000 customers the year prior.
Challenger bank Lunarannounced this week it has raised $25.7 million (€24.1 million) in a supplementary funding round. According to Crunchbase, the new investment boosts Lunar’s total raised to just shy of $512 million, around $54 million of which was brought in over the past four months.
Lunar was founded in 2015 and currently offers retail and commercial digital banking services. The company received its banking license in 2019 and on the retail side offers personal checking accounts with debit cards, youth accounts, in-app PFM tools, a BNPL tool that can be retroactively applied to purchases already made, as well as an investing platform that allows users to invest in stocks, ETFs, and crypto. On the commercial side, Lunar offers business bank accounts, automated bookkeeping, cash flow analytics, expense management tools, loans, insurance, and more.
“Securing €50.9 million in such a challenging market reflects strong confidence in our growth strategies,” said Lunar Founder and CEO Ken Villum Klausen. “We’re seeing robust growth in our newly launched business area Banking Services, where we’re extending our in-house developed Nordic infrastructure to external partners.”
Lunar plans to use today’s funds to expand on its basic package offered to Swedish residents to become a more full-service bank. The company’s banking services are currently available to users in Denmark, Norway, and Sweden.
Approaching its 10th year of operation, Lunar reached 850,000 customers in 2023– including 20,000 business users. This total user number marks an increase from 700,000 customers in 2022. Concurrently, customer activity, as measured by transactions, nearly doubled during this period.
“Our journey doesn’t stop here, “Villum Klausen added. “We’re not just broadening Lunar’s basic banking services, but we’re also evolving into a full-service bank. Our aim is to cater to both private customers and businesses in Sweden, demonstrating our commitment to growth and our vision for the future.”
Seattle, Washington-based Cloudentity has been acquired by access management firm SecureAuth.
Terms of the deal were not disclosed. Cloudentity has raised $13 million in funding.
Cloudentity made its Finovate debut at FinovateFall 2022 in New York.
Access management and authentication company SecureAuth has completed its acquisition and integration of Cloudentity. Announced earlier this year, SecureAuth’s acquisition of the Seattle, Washington-based company will help position the firm as a market leader in the Customer Identity and Access Management (CIAM) space.
Cloudentity, which made its Finovate debut in 2022 at FinovateFall, is a specialist in advanced SaaS-delivered access management technology. The company supports both Fine-Grained Authorization (FGA) and Business-to-Business-to-Consumer (B2B2C) use cases, and also provides support for advanced authorization and consent specifications including Financial-grade API (FAPI) 2.0, which powers Open Finance communities around the world.
Integrating Cloudentity’s orchestration and FGA capabilities will complement SecureAuth’s suite of identity security solutions such as its AI/ML Risk Engine and Passwordless MFA technologies. The combined functionality will enable businesses to upgrade their customer experiences with enhanced security and compliance – with less friction.
“With the acquisition of Cloudentity, SecureAuth is poised to revolutionize the CIAM market,” SecureAuth Chief Operating Officer Kelly Wenzel said. “Cloudentity was built from the ground up as a pure cloud-native deep identity solution that can be implemented on-premise, via public cloud or private cloud, as a single-tenant or multi-tenant deployment within hours. This powerful combination of deployment flexibility and deep capabilities allows us to serve our customers in implementing identity security without sacrificing customer experience.”
As part of the transaction, Cloudentity CEO Brook Lovatt will join SecureAuth as Chief Product Officer. Lovatt said in a statement that the combined company will help drive innovation in the identity security space. “Together, these technologies provide a comprehensive CIAM solution set with an extremely short time-to-value that enables organizations to quickly and easily deliver exceptional digital experiences, while maintaining the highest standards of security and compliance.”
Cloudentity was founded in 2001. Prior to its acquisition, the company had raised $13 million in funding. Forgepoint Capital and WestWave Capital are among the firm’s investors.
International banking technology company Veritran announced a collaboration with financial messaging services company Swift.
As part of the collaboration, Veritran has joined the Swift Partner Programme.
Headquartered in Argentina, Veritran made its Finovate debut at FinovateFall 2021.
A new collaboration between Veritran and financial messaging services innovator Swift will empower financial institutions to provide an enhanced and streamlined cross-border payments experience for customers. As part of the collaboration, Veritran has joined the Swift Partner Programme, which will give its customers access to a variety of Swift solutions to increase the transparency and security of cross-border payments.
“Collaborations such as this are improving the experience for those sending payments cross-border, while also increasing transparency and security to improve the ecosystem as a whole,” Swift Global Head of API Acceleration Juan Carlos Botrán said. “It’s vital that industry players work together in this way to overcome increasing fragmentation in the cross-border payments landscape.”
An international banking technology company, Veritran will benefit from access to Swift solutions such as the Swift GPI Tracker, Payment Pre-validation, and SwiftRef. Swift GPI Tracker enables users to check the status of cross-border payments. Payment Pre-validation validates beneficiary data before the payment is sent. SwiftRef is Swift’s payments reference data solution, which streamlines payment operations and helps users easily find the data sets they need in a single location.
“This agreement is designed to align with the changing market demands, prioritizing the need for speed and flexibility with a more transparent and consistent pricing structure for users, the retail sector, small and medium-sized enterprises (SMEs) and large corporates,” Veritran CCO Marcelo Fondacaro said. “At Veritran, we’re fully committed to leading the charge towards an innovative future in international payments.”
Founded in 2005, Veritran made its Finovate debut at FinovateFall 2019 in New York. The company returned to the Finovate stage two years later for FinovateFall 2021. At the conference, Veritran demonstrated how to leverage its enterprise low-code platform to build solutions like its white-label digital wallet. The platform provides optimum time-to-market, boosting development times by 33%; a memorable UX; unlimited integration and scalability; and bank grade security.
Veritran maintains headquarters in Spain and the U.S., as well as in Buenos Aires, Argentina. The company has a major presence in Latin America, with offices in Mexico, Guatemala, Colombia, Peru, Brazil, Bolivia, Chile, and Paraguay.
A look at the companies demoing at FinovateSpring in San Francisco on May 21 and 22. Register today using this link and save 20%.
Ascent Platform
Ascent Platform’s next-gen Point-of-Sale platform streamlines any product application or form without disrupting existing systems and processes. It learns from each customer interaction to improve subsequent experiences.
Features
Includes a no-code builder for rapid deployment of any app or form
Does not disrupt current operational processes
Offers low acquisition and ownership costs
Delivers less friction, less abandonment, and faster growth
Who’s it for?
Banks, credit unions, and CUSOs.
Bloom Credit
Bloomplus by Bloom Credit lets the 106 million thin-file, no-file, and subprime Americans build credit by submitting payments from their DDA accounts to major credit bureaus.
Features
Allows consumers to build credit with bills they are already paying
Gives consumers access to credit products
Allows consumers to access mainstream credit rates
Who’s it for?
Banks, credit unions, and fintechs.
Eqvista
With $70B in assets under administration (AuA) and a user base of 17,000 companies and monthly valuations of $2B in client assets, Eqvista is in a prime position to upsell equity and financial services.
Features
Delivers in real-time valuation
Provides financing against equity
Offers financing for SME segment
Who’s it for?
Banks who want to enter the equity financing space and SMBs looking for alternative sources of financing.
Revelata
Revelata makes investors bionic at research and analysis. Their first product, deepKPI, automatically surfaces company KPI time series buried within the text of billions of pages of SEC filings.
Features
Fast: Analysts cut ~1,200 hours per year down to seconds for manual data extraction
Trusted: Every data point auditable with one click
Simple: Downloads to Excel, works offline
Who’s it for?
Analysts in investment banks, hedge funds, asset managers, PE firms, research firms, management consultancies, corporate strategy teams, as well as sophisticated retail investors.
Streetbeat
Streetbeat’s financial AI API streamlines financial operations with real-time, personalized data for each client.
Features
Enhances user experience with real-time, personalized financial data
Streamlines financial operations and integrates with existing systems
Supports advanced functions like backtesting and port
Moneyhub recently commissioned research into building societies and consumers, which involved interviews with building society leaders from the likes of Nationwide, Skipton, Yorkshire, Coventry, and The Building Societies Association. Additionally, 2,000 British adults were surveyed to find out about the sector’s digital readiness and the opportunities a more data-led proposition might offer.
Here’s what Moneyhub found:
Nearly 1 in 2 building society members report difficulties in engaging with their services.
80% of consumers believe that a good online platform is important when choosing a new financial provider.
66% of 18-34 year olds would like more convenient access to products and services without the need to visit physical bank branches.
Building societies are at a pivotal juncture. Traditionally known for their community focus and customer-centricity, they now face the urgent need to digitize to meet evolving consumer demands.
“Digitize or die”, a senior sector stakeholder said.
Moneyhub’s research highlights a stark reality: there is a gap between consumer expectations and the digital offerings of building societies. The company’s report – Digitize or Die: A Call to Arms for Building Societies – serves as a roadmap for building societies ready to embrace this essential transformation, ensuring they meet the needs of today’s and tomorrow’s consumers.
White-label tokenization platform for real estate DigiShares has partnered with Czech online real estate investing platform InvestBay.
InvestBay will leverage DigiShares’ technology to tokenize real estate.
Headquartered in Denmark, DigiShares made its Finovate debut at our online fintech conference in the spring of 2021.
Denmark-based white-label tokenization platform for real estate DigiShares has partnered with Czech online real estate investing platform InvestBay. Courtesy of the partnership, InvestBay will integrate DigiShares’ white label, real estate tokenization technology with its own platform that facilitates fractional property investments.
“We build InvestBay in such a way that it is similar to real ownership but in smaller fractions,” InvestBay CEO and Founder Daniel Rajnoch explained. “Investors benefit from two potential revenue streams: rental income and capital value growth over time. It is also hassle-free ownership, because InvestBay will take care of everything with their partners. This includes finding guests, maintenance, cleaning, checking guests in and out – all the usual headaches of fully owning a property.”
InvestBay’s “crowd-owning” model enables investment properties to be co-owned by tens or even hundreds of micro-investors. Geared toward holiday properties in Europe, investors can participate with as little as $107 (€100) and enjoy the use of the properties on preferential terms. Adding tokenization, according to Rajnoch, creates a “vehicle for enabling liquidity and creating equal opportunity access to this investment sector for smaller retail investors.”
Founded in 2018, DigiShares made its Finovate debut at our online fintech conference in the spring of 2021. At the event, the company demoed its white-label tokenization platform that digitizes and automates the processes involved in the financing of real estate projects. The platform enables users to fractionalize assets, companies, and funds down to $107 (€100); allows investors to pay in both fiat and stablecoin; and facilitates P2P and wallet-to-wallet trading without counterparty risk.
“We are very excited about collaborating with InvestBay on democratization of real estate investment and happy that they see our white label tokenization platform as a good fit for their requirements,” DigiShares CEO and Co-Founder Claus Skaaning said. “Together with InvestBay we share the vision that one day everyone will be able to invest in attractive real estate assets to longer term help close the global wealth gap.”
DigiShares’ partnership with InvestBay is the company’s sixth collaboration this year. DigiShares began 2024 teaming up with Danish real estate developer Coreestate and urban mobility solutions provider Custowner Mobility. Also this year, the company expanded its partnership with public permissioned blockchain network Polymesh (first announced in December), teamed up with Spanish proptech startup Equito App, and announced that it was collaborating with Polygon to create a decentralized ID framework for tokenization.
Upstart launched a new capability, Recognized Customer Personalization (RCP), that allows banks to present customized loan offers to their clients searching for a loan on Upstart.com.
Banks can tailor the offer to each prospective borrower based on their risk tolerance, return target, preferred loan size and terms, and geographic focus.
Currently, more than 20 lenders within Upstart’s network are already using the new tool.
Lending marketplace Upstart recently unveiled a feature it calls Recognized Customer Personalization (RCP). This new personalization tool enables banks using Upstart’s Referral Network to present a customized loan offer to their customers who use Upstart.com to look for a loan.
The new capability offers lenders on the Upstart Referral Network insight into which of their customers are in the market for a loan and enables banks to send an immediate and automated branded credit offer to the customer. Banks can tailor the offer to each prospective borrower based on their risk tolerance, return target, preferred loan size and terms, and geographic focus. RCP also allows lenders to use their own, in-house underwriting model, or leverage Upstart’s AI-enabled credit decisioning tool.
“In the current economic environment, lenders are laser focused on retaining their customers and increasing the lifetime value of those relationships,” said Michael Lock, SVP of Lending Partnerships, Upstart. “RCP enables them to reach their existing customers in a new way, provide more value, and build loyalty.”
RCP is currently available for personal loans and Upstart plans to expand the program to auto loans and home equity lines of credit in the future. Currently, more than 20 lenders within Upstart’s network are already using RCP.
Charles Eads, Chief Lending Officer of one such lender, Abound Credit Union, noted RCP’s potential to help the credit union serve members outside of its typical geographic boundary. “RCP will enable us to retain and better serve our existing members,” said Eads. “This innovative program will allow us to continue to meet the financial needs of our members in the communities we serve, as well as those members who have moved outside of the area.”
California-based Upstart was founded in 2012 to leverage AI and machine learning to price credit and automate the borrowing process. The company closed its IPO in 2020 and is currently traded on the NASDAQ under the ticker UPST with a market capitalization of $2.02 billion.
