BlueVine Brings in $60 Million

BlueVine Brings in $60 Million

Alternative lending company BlueVine just landed $60 million in equity funding. The Series E round brings its total financing to $578 million, comprising of $173 million in equity and $405 in debt.

Participating in today’s round are Menlo Ventures, which led the round, new investor SVB Capital, and all major existing investors. BlueVine will use the funds to support and expand its products and to boost its R&D team. “This new investment gives us a stronger market position, as we pursue bigger plans for reaching even more small business owners and expanding our offering,” said BlueVine CEO and founder Eyal Lifshitz.

BlueVine was founded in 2013 and has made its name as a player in invoice factoring. The company issues cash to small businesses in exchange for the sale of their unpaid invoices at a discount. Businesses can receive up to $5 million in working capital in a matter of days to help manage operations.

Tyler Sosin, partner at Menlo Ventures said, “The company has demonstrated dramatic, sustainable growth and has proven that there is enduring value in developing a comprehensive offering of credit products that small and medium sized businesses can use throughout their lifetimes.” He also commented on BlueVine’s potential growth, adding, “we believe there is a real opportunity for BlueVine to emerge as the dominant, multi-billion dollar fintech company.”

Today’s funding comes just one month after BlueVine received a $200 million credit facility from Credit Suisse. At the start of 2018, the company doubled its invoice factoring credit line to $5 million, just after increasing its business line of credit limit from $150,000 to $250,000 in 2017.

BlueVine demoed its small business working capital solution at FinovateFall 2014. Since inception, the company has funded more than $900 million in loans for more than 10,000 customers, 80% of which are return customers.

Signicat and Mitek Team Up to Improve Digital Onboarding

Signicat and Mitek Team Up to Improve Digital Onboarding

Identity assurance provider Signicat and digital identity verification company Mitek partnered to improve the onboarding experience for end customers while helping banks comply with new regulations.

The two teamed up to create a solution specifically for European-based financial services providers, who are facing a handful of new and ever-changing regulations, including PSD2, AMLD5, and eIDAS. The new tool, available in Signicat’s Digital Identity Platform, integrates Mitek’s Mobile Verify solution to authenticate identity documents presented during a remote, mobile onboarding process. To comply with AML and KYC regulations, Mitek’s Mobile Verify captures an image of the identity document to ensure its authenticity.

“Partnering with Mitek enables us to jointly offer European financial services institutions a customer on-boarding solution that is 100% online,” said Gunnar Nordseth, CEO at Signicat. “The partnership is designed to remove friction from the customer on-boarding process to ensure financial institutions can effectively compete in the marketplace.”

Nordseth also noted that Signicat clients can now simultaneously benefit from Mitek’s Mobile Verify solution, as well as Signicat’s secure authentication, electronic signing, and sealed document archival. Signicat also offers an eID hub, which consists of a wide variety of third party eID providers covering regions all over the world.

Founded in 2007, Signicat demoed Signicat Assure and Signicat Sign at FinovateEurope 2017. Assure combines national e-identities, commercial e-identities, and multiple other methods that offer a fast way to verify the customer’s identity for onboarding. Sign is a digital signature solution that ensures the origin and integrity of the document while maintaining non-repudiation from the sender. In January of this year, the company closed a $2 million funding round, bringing its total financing to $3.9 million.

Mitek is publicly traded on NASDAQ under the ticker “MITK” with a market cap of $307 million. Mitek was founded in 1985 and is headquartered in San Diego, California. The company most recently demoed its MobileVerify solution at FinovateFall 2017. Last month, Mitek acquired artificial intelligence and image analysis company A2iA for $49.7 million.

Finovate Alumni News

On Finovate.com

  • Signicat and Mitek Team Up to Improve Digital Onboarding.
  • Meniga Scoops Up $3.6 Million in New Funding Courtesy of UniCredit Investment.
  • OutSystems’ $360 Million Funding Round Boosts Valuation Above $1 Billion.
  • Credit Karma Hires Colleen McCreary as First Chief People Officer.

Around the web

  • Oman’s Bank Sohar to deploy core banking platform from Infosys Finacle.
  • IdentityMind Global announces update of its trusted digital identities platform.
  • Revolut CEO Nikolay Storonsky tells Reuters his company will seek a banking license in the U.S.
  • i-Sight to deploy ACI Worldwide’s Case Management solution to fight bank fraud.
  • D3 Banking Technology unveils new account opening service.
  • collectAI improves Hanseatic Bank’s receivables management with a 24 percent higher collection rate.
  • SMArtX adds 18 new strategies.
  • Kony unveils new digital banking solution – Kony DBX
  • Edwards Federal Credit Union signs with Bankjoy to enhance home and mobile banking functionality.
  • Two of the top 5 US banks (and three of the Top 10) are now using Socure’s ID+ platform.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

First Look: Honeycomb Credit

First Look: Honeycomb Credit

Last fall Finovate added an Accelerator Showcase where pre-seed startups from fintech accelerators pitch on stage for three minutes. That’s where I first heard George Cook, founder of Honeycomb Credit, one of two startups selected to pitch at FinovateSpring by accelerator AlphaLab.

The Pittsburgh-based company got its start as a class project at Dartmouth’s graduate school of business. But co-founder Cook and his classmate Ken Martin received so much positive feedback from the idea they decided to make it a real company in 2017.

The company is joining what was expected to be a crowded space of SMB crowdfunding. But the lengthy implementation of the U.S. crowdfunding framework has caused many of the 38 startups in the space to give up leaving room for new companies such as Honeycomb. The notable exception is Funding Circle which has raised $375M (note 1). Other active platforms include Finovate alums P2Binvestor (raised $9.2 million) and SeedInvest (raised $8.2 million) along with Crowdfunder (raised $6M), Fundable (acquired by Startups.co) and Wefunder (raised $2.3 million). Indiegogo (raised $56 million) is also now involved in equity crowdfunding, although it is currently a small piece of its overall rewards-based funding platform.

Honeycomb is a debt crowdfunder where investors loan money at bank-like rates to SMBs currently unqualified for bank funding. In addition, like Kickstarter or Indiegogo, non-monetary gifts and experiences are offered to incent action on the part of would-be-lenders. For example, Pittsburgh Pickle offered t-shirts to the first 20 investors in its $10,000 to $50,000 crowdfunding campaign (see screenshot at top). It also invited anyone who kicked in at least $1,000 to an exclusive event at the pickling facility.

The idea is to enable small businesses to tap their local community for debt capital on better terms than higher-rate alt-lenders such as Kabbage or OnDeck. According to Cook, its SMB customers are “near bank quality” but lack one or two of the typical prerequisites such as 3 years of tax returns. But at least one of their beta customers used Honeycomb not because they couldn’t get bank financing, but because they’d been burned in the past and preferred a non-bank alternative.

The loans are funded by individual investors on the platform, using the same model as Lending Club, Prosper, or Zopa. Thanks to the provisions of the crowdfunding act (specifically Reg CF), investors need not be accredited, an important aspect of the Honeycomb business model, which relies on the borrower’s friends, family and customers to fund the loan. Eventually as the business scales, HoneyComb expects to attract institutional and high net worth funds seeking yields from alternative assets.

Honeycomb’s special sauce is community and collateralization. It lends to existing businesses looking to expand expand their share of wallet within their predefined market. For example, it recently ran a successful campaign for an ice cream shop to buy a truck for mobile sales. And whenever possible, HoneyComb takes equipment as collateral on the loans.

Pricing
Borrowers typically pay platform lenders 8% to 12% interest on 3- to 5-year installment loans. At the conclusion of a successful money-raising campaign, Honeycomb charges borrowers an 8% fee and investors 2.85%. Honeycomb doesn’t hold loans on its balance sheet, so all credit risk is pushed to investor/lenders.

Go-to-Market Strategy
The startup has begun rolling out the platform having ran two successful campaigns, raising $50,000 for an ice cream truck and $25,000 for several new greenhouses. There are currently two more in process, one of which has already surpassing its minimum raise amount.

To expand, Honeycomb is currently raising a seed round. They have received good publicity in their local market, but to make that scale to other markets Honeycomb may need to find local partners such as local development groups, governments, and financial institutions. However, Honeycomb believes that the public nature of crowdfunding campaigns will drive a large number of new customers to its platform keeping customer acquisition rates low.

To reach profitability Honeycomb needs to expand beyond its Western Pennsylvania home market. That’s going to be a challenge without compromising quality. The company hopes to attract revenue from ancillary services and balance sheet lending down the road, but that’s much easier said than done in the fickle SMB sector.

Bottom Line
As with many businesses, it’s all about scale and efficiency. Honeycomb will need to automate its processes while simultaneously increasing loan size. But as loan sizes increase, they will begin to run up against a raft of competitors, including banks and credit unions. But I also think there is a good opportunity to license the Honeycomb platform to banks and credit unions wanting to add crowdfunding to their SMB services.


Author: Jim Bruene (@netbanker) is Founder & Advisor at Finovate as well as Principal of BUX Certified, a financial services user-experience standard. 


Notes:
1. Also in the UK there are 4 other platforms with good traction: Crowdcube (£21.2M raised for itself) Seedrs (£13.7M raised), SyndicateRoom (£8.7M raised) and Venturefounders (£6.8M raised).

Token Facilitates Direct Payments for Caxton FX

Token Facilitates Direct Payments for Caxton FX

Cross-border payments platform Caxton is piloting a new direct payments solution for clients of its multi-currency prepaid MasterCard. The new capabilities come courtesy of a partnership with open banking champion Token.

The integration allows Caxton clients to use the Caxton mobile app to load their prepaid cards directly from their bank account. By leveraging Token’s open banking expertise, Caxton is able to remove friction, lower costs, and benefit from instant money movement.

The company facilitates this direct connection by forgoing debit card rails and instead routing customer payment information using a Smart Token, which transmits only a representation of cardholder data and not the data itself. Token is integrated with Caxton’s existing infrastructure to offer the company direct access to their clients’ banks, given their permission.

In the press release, Marten Nelson, co-founder and CMO of Token said, “Our partnership with Caxton reinforces our commitment to all players in the digital ecosystem; we exist to help them lower costs and deliver an amazing, market-differentiating experience to their customers, through a rich, yet simple integration.”

Caxton has 750,000 private and business customers who processed 7.3 million transactions last year using its multi-currency cards and international bank transfer services. The company plans to begin the rollout of the new service in the third quarter of this year.

Founded in 2003, Caxton leverages the blockchain to help users send cross-border money transfers with less friction and at a lower cost than with traditional banks. At FinovateEurope 2017, the company demoed its Firebird Payment Engine, a private blockchain ledger that facilitates payments without the need for an API. Last June, Caxton debuted multi-currency accounts for SMEs.

Headquartered in California, Token offers banks, payment service providers, developers, and merchants access to the benefits of open banking. The company helps organizations securely connect to their customers’ bank account information in a secure and compliant manner using its Smart Token technology. The company showcased its PSD2 compliant solution at FinovateEurope 2017 in London. Last month, the FCA granted Token authorization for open banking payment and information services.

Fintonic Bolsters Platform’s Loan Options with BBVA Partnership

Fintonic Bolsters Platform’s Loan Options with BBVA Partnership

What do you get when you cross PFM functionality with a full lending platform? Courtesy of a new partnership between Spanish fintech Fintonic and BBVA, we are about to find out.

Fintonic announced today that BBVA will be a part of the company’s loans platform. The innovative bank joins EVO Finance, Wanna, and a growing number of large banks and FIs that have joined Fintonic’s loan platform, which has processed more than €30 million in total loan transaction volume.

“Fintonic goes beyond the traditional PFMS (personal financial management system) and, unlike banks, it is committed to a marketplace that offers loan alternatives from various institutions,” Lupina Iturriaga, founder and general manager of Fintonic said. Fintonic offers a unified digital banking solution that combines all of the user’s basic financial information – banking, insurance, credit cards, loans – into one mobile app. More than 450,000 people are using Fintonic’s app to better understand their spending and saving behaviors. The company boasts that in 2017 its platform saved users €13 million in reimbursed charges and sent more than 278k alerts to warn users about potential overdrafts.

The new partnership with BBVA will enable users of the Fintonic app (available from both Google Play and the Apple App Store) to obtain loans of up to €30,000 without having to leave the app. The platform leverages risk profiles and customer data based on economic, social, and demographic analyses, as well as machine learning prediction algorithms and external sources such as FACTIVA to provide loan approvals in three minutes or less. Fintonic is also the developer of the FinScore, a free, personalized index that gives users information about their credit profile and how it affects the attractiveness of certain financial products.

Founded in 2012 and headquartered in Madrid, Spain, Fintonic demonstrated its technology at FinovateSpring 2016. At the conference, the company highlighted a new innovative alert and inbox system lets users know when they are being charged commissions, when overdrafts occur, and when insurance policies are nearing expiration.

Named to the European Fintech 100 last fall, Fintonic has raised more than $29 million in funding, and includes ING Group, PSN, Ideon Financial Solutions, Inception Capital, Onza Capital, and Atresmedia among its investors. The company was profiled by La Voz de Galicia this spring.

Gusto Launching its Own Yelp for Accountants

Gusto Launching its Own Yelp for Accountants

Online payroll and HR services provider Gusto is unveiling its Partner Directory today, a directory of accounting firms suitable for small and medium-sized businesses.

The directory offers Yelp-like reviews of accountants and is available to any business– both Gusto customers and non-customers– for free. The tool allows businesses to filter the search results by geography, services offered, software expertise, and industries served.

“We noticed a growing trend of accountants that are competing effectively against larger accounting firms by advising small businesses more holistically. These accountants are differentiating and ‘future proofing’ their practices by offering non-traditional services like benefits and human resources for their clients,” said Gusto Senior Product Manager Mike Lyngaas. “Recommendations for accountants and trusted partners are one of the top requests we get from small businesses, and the Partner Directory allows modern accountants and entrepreneurs to grow their businesses together.”

To curate the directory, Gusto screened more than 4,000 of its accounting firm partners for their payroll expertise, benefits and HR services, ability to help businesses claim the federal R&D tax credit, or even acting as an outsourced CFO. The company adds more accountants regularly to both its list of partners as well as to the directory.

Accountants can leverage Gusto’s technology to run payroll or provide benefits and HR services for all of their business clients. They can also tap into Gusto’s relationships with third party software providers.

Founded in 2011 as ZenPayroll, Gusto serves over 60,000 companies across the U.S. and has offices in San Francisco and Denver. At FinovateSpring 2014, Gusto CEO Joshua Reeves showcased the company’s payroll solution. In March, the company launched a freemium model for its payroll solution and in February was highlighted in Forbes for its diversity efforts. Of the company’s 525 employees, 51% are women.

Finovate Alumni News

On Finovate.com

  • Gusto Launching its Own Yelp for Accountants.
  • Fintonic Bolsters Platform’s Loan Options with BBVA Partnership.

Around the web

  • Multiple-time Best of Show winner Ondot Systems launches its digital card services platform.
  • Thomson Reuters and ICAP announce five-year extension of their partnership.
  • TransferWise lands its first big European bank customer with new agreement with France’s BPCE Group.
  • NY Times features Unison’s approach to shared equity home ownership investment
  • Taulia has record $4.5bn First Quarter.
  • Cardlytics refinances credit facilities with Square 1 Bank.
  • Ripple to give $50 million to universities including Princeton, MIT, and UCL for blockchain research.
  • Foothills Credit Union selects Digital Onboarding for new member onboarding technology.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Munnypot Announces Strategic Partnership with Capita

Munnypot Announces Strategic Partnership with Capita

Robo advisor and FinovateMiddleEast 2018 alum Munnypot has picked up a new investor. Capita announced late this week that it would take an equity stake in the company and will license Munnypot’s technology for its own clients. The amount of the investment was not disclosed, but the company said the funding gave Capita a minority holding in the firm and Capita emphasized the strategic nature of the partnership.

“We are enabling our financial services clients to address the growing digital savings market in an effective way, helping a dynamic startup to achieve critical mass and create sustainable U.K.-based digital jobs,” Capita CEO John Lewis explained. “We’re continuing to innovate and strengthen the digital platforms we offer to our clients to deliver real value and create future sustainable growth.”

Munnypot’s robo advisor platform is designed specifically for those who typically are unable to access financial advice due to the cost or investment minimums they cannot meet. At a price point similar to other online, self-serve robo advisory solutions, Munnypot leverages chatbot technology to help clients make investment decisions that match their appetite for risk and best enable them to meet their financial goals.

In addition to helping new investors, Munnypot offers more experienced investors an alternative to traditional financial advisors that can result in savings of as much as 75% on ongoing yearly fees and 75% on upfront advice fees. With a minimum investment of £250, Munnypot’s one-off upfront advice fee upon setting up the customer’s “pot” starts at £5 with a monthly monitoring fee starting at £0.42p. Fees top out at £500 for the one-off fee for accounts over £100,001, and £41.66p for monthly monitoring. The B2B solution is FCA-regulated and available as a white label solution.

Munnypot CEO Andy Fay said the new partnership with Capita was a “significant milestone” for the company. “Clients can now transact with us, knowing that we’re still the same independent, innovative, agile business but with the comfort of knowing we have the support of Capita plc as a shareholder,” he said.

Founded in 2015 and headquartered in Crawley, U.K., Munnypot demonstrated its robo advisory platform at the inaugural FinovateMiddleEast in February. Earlier this year, the company partnered with major Danish bank, Jyske Bank, becoming Munnypot’s first European white label customer.

Diebold Nixdorf Brings its Bank-Like Kiosk to Emirates NBD Customers

Diebold Nixdorf Brings its Bank-Like Kiosk to Emirates NBD Customers

Diebold Nixdorf announced this week that it partnered with Emirates NBD to bring consumers in the United Arab Emirates access to its digital kiosk that offers a variety of banking services.

The bank has called the kiosk EasyHub, and the capabilities go far beyond a typical ATM. This kiosk allows customers to conduct many of the activities they would typically do in a brick-and-mortar bank, all outside of bank operating hours. Users interact with a video teller and follow written instructions on the screen to sign up for new products and services, apply for and receive a new debit card, update their personal details, request a checkbook, authenticate statements, and even apply for a personal loan.

Diebold Nixdorf’s Vynamic Connection Points, a multi-vendor software allowing for customized applications, is powering the EasyHub kiosk. The device comes with a debit card dispenser, biometric signature pad, document scanner, statement printer, ID reader, cash recycler and coin dispenser, and an NFC reader for contactless transactions.

In a blog post, Abdulla Qassem Emirates NBD group chief operating officer cited EasyHub’s customer-first approach, increased flexibility, and superior service among the benefits of teaming up with Diebold Nixdorf.

Diebold Nixdorf appeared on the Finovate stage alongside Zenmonics at FinovateFall 2014 to showcase an in-lobby terminal. Founded in 1859, the company is partnered with almost all of the world’s top 100 banks and most of the top 25 global retailers. Diebold Nixdorf is headquartered in Ohio and has 23,000 employees across the globe.

Switch Speeds Virtual Card Adoption with CardSavr API

Switch Speeds Virtual Card Adoption with CardSavr API

Looking to make the leap from plastic cards to virtual cards? Switch and its CardSavr API are here to help.

“Until now, activating merchant-specific virtual cards required cardholders to laboriously create and update every merchant one-by-one,” Switch CEO Chris Hopen said. “Our CardSavr API automates and simplifies the entire user process and secures the card on file at the merchant with one step.”

Launched earlier this year, Switch’s CardSavr API is a first-of-its-kind technology that supports and enables an often-overlooked aspect of commerce: healthy credit card circulation. The CardSavr API helps card issuers get new and re-issued credit cards into circulation with thousands of ecommerce retailers soon after the cards are activated.

The application of the CardSavr API to the virtual card market is the latest evolution in use cases for the technology. From its origins as an innovative credit card updater, the company’s solution provides further assistance to card issuers looking to leverage the efficiency of virtual cards.

In the company’s press release, Switch said that its technology would help speed virtual card adoption and suggested that CardSavr “conquer(s) the elusive issue” of ensuring a seamless card creation and updating process for virtual cards in the same way it has for physical cards. The core technology behind CardSavr can also be used with reward, private label, and P2P payment schemes, creating what Hopen called “a healthy virtual payment ecosystem for everyone.”

Speaking for CULedger, a leading credit union project that is developing applications based on distributed ledger technology, CEO John Ainsworth praised Switch’s latest offering. “Switch has brought a very innovative technology solution that uniquely allows financial institutions and issuers to capitalize on virtual cards, while increasing security and convenience for our customers.” He added, “Switch continues to impress me with their disruptive and successful approach to vanquishing major foundational industry challenges that have never been solved.”

Switch demonstrated its credit card updating technology at FinovateSpring 2016. Founded in 2014 and headquartered in Seattle, Washington, the company has raised $1.9 million in funding after picking up a $400,000 angel investment last spring.

Personetics Accommodates Digital-Only and Challenger Banks

Personetics Accommodates Digital-Only and Challenger Banks

Cognitive analytics company Personetics has traditionally served large banks, including six of the top 12 banks in North America and Europe. Today, however, the company launched a new offering that makes its solutions more accessible for smaller digital-only and challenger banks.

The new offering provides a highly customizable, pre-packaged application, lowering barriers for smaller banks to implement AI-powered banking services. Founded in 2010, Personetics leverages predictive analytics to help banks anticipate their clients’ individual needs.

“Personalized and proactive guidance is quickly becoming a must-have requirement for banking, especially for new banks that are built on the promise of a new banking experience,” said David Sosna, Personetics co-founder and CEO. “Our mission is to deliver market-proven engagement and personalization technology that is quick and easy to deploy so digital banks can focus their resources on their go-to-market strategy.”

The implementation, which takes under three months, is designed to work with banks with limited resources. To meet these requirements, the new software package offers:

  • Pre-built banking content: The offering includes hundreds of pre-built insights, financial tips, and personalized advice that the bank can easily modify and control
  • API-first approach: Personetics uses open APIs to integrate AI functionality into a bank’s digital banking experience and allows banks to create their own brand identity and customer engagement strategy.
  • Editing tools: These tools allow the bank to retain control over the content and develop new capabilities to support its own business goals.
  • Fast time-to-market: Personetics delivers a production-level solution in just three months.

Among the first challenger banks to leverage Personetics’ new software package is U.K.-based Tandem Bank, which announced its participation in February. “The Personetics Cognitive Banking Brain provides great AI capabilities with prebuilt insights which enable us to accelerate time-to-market and place personalised highlights in the hands of our customers sooner rather than later,” said Ricky Knox, chief executive at Tandem Bank.

At FinovateFall 2016, Personetics demonstrated its Personetics Anywhere chatbot solution. The company was founded in 2011 and has received $18 million in total funding. Personetics recently onboarded Romania’s Banca Transilvania to offer AI-powered, forward-looking financial guidance to the bank’s clients. The company offers more than 4.3 billion personalized interactions to more than 45 million end customers across the globe.