This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Robinhood has received a Wells Notice from the U.S. SEC.
In the Wells Notice, the SEC staff alleged Robinhood violated Sections 15(a) and 17A of the Securities Exchange Act of 1934.
Robinhood Markets Chief Legal, Compliance, and Corporate Affairs Officer Dan Gallagher said that he is “disappointed” with the Wells Notice. “We firmly believe that the assets listed on our platform are not securities,” he said.
Stock brokerage app Robinhood is feeling the heat from the U.S. Securities and Exchange Commission (SEC) today. The California-based company revealed in a blog post over the weekend that it received a Wells Notice from the SEC.
In the Wells Notice, staff at the SEC filed an enforcement action against Robinhood, alleging the company violated Sections 15(a) and 17A of the Securities Exchange Act of 1934. The former section requires broker-dealers to register with the SEC and become a member of a self-regulatory organization (SRO), such as FINRA. The section aims to ensure that broker-dealers adhere to standards and practices to protect investors. The latter, 17A, establishes the framework for the National Securities Clearing Corporation (NSCC). This section also requires transfer agents to register with the SEC and sets standards to ensure securities transactions are efficiently processed.
According to Robinhood’s 8-K filing, “The potential action may involve a civil injunctive action, public administrative proceeding, and/or a cease-and-desist proceeding and may seek remedies that include an injunction, a cease-and-desist order, disgorgement, pre-judgment interest, civil money penalties, and censure, revocation, and limitations on activities.”
Robinhood has made it clear that it is making efforts to comply with the SEC to resolve the issue. The company originally launched Robinhood Crypto, its crypto trading arm, in early 2018. Robinhood Crypto currently allows customers in 48 states and Washington D.C. to buy, sell, store, and in many cases transfer up to 18 cryptocurrencies.
Robinhood Markets Chief Legal, Compliance, and Corporate Affairs Officer Dan Gallagher said that the company uses a “rigorous review process designed to ensure that it does not list digital asset securities.” The company said it has always been careful not to list certain tokens that the SEC has deemed securities in public actions against other platforms. Robinhood has also steered clear of products, including lending and staking, that may be considered securities.
“After years of good faith attempts to work with the SEC for regulatory clarity including our well-known attempt to ‘come in and register,’ we are disappointed that the agency has decided to issue a Wells Notice related to our U.S. crypto business,” said Gallagher.“We firmly believe that the assets listed on our platform are not securities and we look forward to engaging with the SEC to make clear just how weak any case against Robinhood Crypto would be on both the facts and the law.”
Robinhood has not disclosed any specific actions it plans to take to respond to the SEC’s notice. The company can take action to respond to the allegations before the SEC makes a move to sue or settle with Robinhood to resolve the issue. The company said that the development will impact neither the services it provides nor its end customers’ accounts.
BaaS-enabled banks have been operating in a regulatory minefield recently. Since late 2023, the U.S. FDIC and CFPB have issued multiple consent orders to banks, citing their BaaS relationships as the cause. From the perspective of an onlooker, it appeared that regulators were issuing the consent orders to make examples out of certain players in the industry, foregoing formal BaaS regulation.
This has been particularly troubling for community banks, which often rely on BaaS to adapt to modern consumer preferences by layering the newest fintech tools on top of their legacy core systems, without the need to build technology in-house or update old technology.
The agencies’ newly published document may disappoint, however. That’s because the new document does not provide formal Baas regulation by laying out rules by which community banks can abide in order to avoid consent orders. Instead, the new document lays out “potential considerations, potential sources of information, and examples” for risk management, due diligence, contract negotiation, ongoing monitoring, termination, and governance with third parties.
“This guide is intended to assist community banks when developing and implementing their third-party risk-management practices,” the new document states. “This guide is not a substitute for the TPRM Guidance. Rather, it is intended to be a resource for community banks to consider when managing the risk of third-party relationships. This guide is not a checklist and does not prescribe specific risk-management practices or establish any safe harbors for compliance with laws or regulations.”
Baas-enabled banks seeking to navigate third-party relationships may find the new resource frustrating, however. While some of the advice in the document is helpful, the agencies have built a lot of wiggle room for themselves into the document. Ultimately, however, the guidance is better than nothing.
Regardless of what it lacks, both community banks and even larger financial institutions will likely find it useful to compare the guide’s “potential considerations” to their current internal processes. And in the end, the guidance may help deter another tidal wave of consent orders.
Identity decisioning platform Alloy teamed up with SME data intelligence innovator Coris.
Courtesy of the partnership, Alloy customers will be able to access Coris’ Merchant Profiler and Corshield solutions directly from within the Alloy platform.
Alloy introduced itself to Finovate audiences at FinDEVr Silicon Valley in 2016.
Alloy, the identity decisioning platform, announced a new partnership with SMB data intelligence company Coris. Via the partnership, Alloy customers will be able to access Coris’ solutions to automate SMB onboarding, underwriting, and fraud prevention.
“We’re excited to partner with Coris on improving the SMB risk management process for builders of financial products,” Alloy GM of Partner Solutions Brian Bender said. “Having a wide array of data at their disposal is critical for banks and fintechs to manage identity risk across the customer lifecycle.”
Alloy’s 500+ customers will be able to access a pair of Coris’ solutions directly from within the Alloy platform: MerchantProfiler, Coris’ KYB and small business intelligence product; and Corshield, Coris’ SMB-specific fraud model. Merchant Profiler enables fintechs and software companies to onboard, underwrite, and monitor their SMB customers via GPT-4 powered SMB industry classification. The solution also provides automated analysis of SMB websites, third party consumer reviews, and more; as well as real-time KYB, including Secretary of State business verification, sanctions screening, and TIN matching. Merchant Profiler also offers adverse media insights to see if there is significant negative news or information about a business or its beneficial owners.
CorShield fights business impersonation fraud and first party fraud at the point of sign-up. The solution automatically triangulates known data on SMBs and cross-references applicant data against the known information. CorShield then generates a fraud score to assess the likelihood of fraud and shares the primary reasons for the fraud score with the user.
One firm using CorShield claimed that the solution helped them instantly approve 90% of business applications. The company also said that Coris’ SMB intelligence data has lowered the firm’s application review time by more than 75%.
Founded in 2022 and headquartered in Palo Alto, California, Coris has helped its business customers verify more than 150,000 SMBs and provided data on more than 330 million global SMBs. The company secured $3.7 million in funding earlier this year in a round co-led by Lux Capital and Exponent Founders Capital. Y Combinator, Blank Ventures, WePay Co-Founder Bill Clerico, and Mercury CEO and Co-Founder Immad Akhund also participated.
Alloy introduced itself to Finovate audiences at FinDEVr Silicon Valley in 2016. The company returned to the Finovate stage in 2022 to demo its open payment hub, CHUCK, and its gifting platform Social Money, launched in partnership with Prizeout. Earlier this year, Alloy announced a partnership with embedded finance platform Liberis. The partnership will enable Liberis to integrate automated compliance verifications from Alloy directly into the funding application process.
Headquartered in New York, Alloy was founded in 2002. The company has raised more than $207 million in funding, according to Crunchbase. Alloy includes Lightspeed Ventures, Avenir Growth Capital, and Canapi Ventures among its investors.
Investment and innovation are defining the wealth management space as the week begins. LA-based wealth management platform Altruist enters the week with $169 million more in capital, courtesy of a Series E round led by Iconiq Growth. Meanwhile, JP Morgan Chase announced that it has deployed generative AI to enhance its thematic investment offering.
Be sure to check back all week long for more fintech news!
Crypto
Revolutlaunches its stand-alone crypto exchange for professional crypto traders, Revolut X.
KeyBanklaunchesKeyVAM, a virtual account management solution powered by Qolo for treasury management clients who have complex demand deposit account structures.
Regtech
Global RegTech consolidator Corlyticsacquires Deloitte UK’s RegTech platform.
Embedded finance
Issuer-processor Paymentologyteams up with Diamond Trust Bank to bring embedded finace solutions to customers in Kenya.
Accelerators and incubators
Ally Financiallaunches its Ally Innovation Challenge to promote solutions leveraging Responsible AI.
A few days ago, we highlighted the $25.7 million (€24.1 million) investment secured by Danish challenger bank Lunar. Also this week, we noted partnership news from Denmark-based real estate tokenization platform – and FinovateSpring alum – DigiShares.
With all this Danish fintech news, we are devoting this week’s edition of Finovate Global to the fintech scene in Denmark: a Nordic country with a population of nearly six million and a per capita GDP that’s among the top ten in the world. We’ll also highlight some of the Danish fintechs that have demonstrated their innovations on the Finovate stage.
Danish fintech unicorn Pleo raises €40m in debt financing
Pleo enables companies to centralize their business spending – expenses, reimbursements, invoices, and more. Pleo also offers physical, temporary, virtual, and vendor company cards to help businesses better track and manage spending. Pleo integrates readily with common business tools such as NetSuite, Xero, and Quickbooks, making its solution a viable option for companies ranging from start-ups to enterprises. With more than 30,000 customers using its spend management platform, Pleo notes that its technology saves administrative teams 138 hours every year and has a satisfaction rate of 90%.
“We are delighted to announce our partnership with HSBC Innovation Banking. Starting at €40 million, the debt financing available to us can extend based on future requirements – which will expand our existing reach even further into more countries, enable us to increase limits and offer more currencies,” Pleo VP of Credit and Treasury Amit Kahana said. “Beyond this milestone partnership and imminent launch in the Netherlands, Pleo is expecting to see exciting developments over the coming 12 months as Pleo prepare(s) to launch in even more markets.”
Pleo initially earned its unicorn status in the summer of 2021, courtesy of a $150 million investment that drove the company’s valuation to $1.7 billion. Pleo secured an additional $200 million in funding in an extension of its Series C round in December of that year, giving the company a valuation of $4.7 billion.
Ageras raises €82m in oversubscribed private placement round
From its origins in 2012 as an online marketplace to help small businesses connect with financial professionals like accountants and bookkeepers, Denmark-based fintech Ageras has grown into a more comprehensive financial services provider, offering cloud-based accounting services to more than 300,000 small businesses in Europe.
“We want to make it easier to be a small business in an increasingly difficult administrative and regulatory landscape by offering a fully integrated platform where companies can manage their banking, accounting, and tax in one financial cockpit,” Anderson said.
The investment takes Ageras’ total equity capital to more than $231 million, according to Crunchbase. The funds will also support Ageras’ plans for new acquisitions, with Anderson admitting that there are a number of potential targets already under consideration.
Ageras operates in more than 100 countries and boasts more than a million users of its technology. Headquartered in Copenhagen, Denmark, Ageras was acquired by Investcorp, which took a minority stake in the company in 2017.
Here come Finovate’s Danish alums
Over the years, Finovate has been proud to showcase a large number of innovative fintechs from Northern Europe, including a handful from Denmark. Here are some of the Danish fintechs that have demoed their innovations on the Finovate stage.
Cardlay Payment Systems – FS24 – Cardlay Payment Systems will make its Finovate debut later this month at FinovateSpring in San Francisco. The company offers a white-label card and expense management solution, Cardlay Expense, that delivers an exceptional, real-time experience for cardholders.
Subaio – FEU22 – Subaio made its Finovate debut at FinovateEurope 2020 in Berlin, Germany, and returned to the Finovate stage two years later for FinovateEurope 2022 in London. The company helps financial companies generate new revenue streams by identifying recurring payments and insights, and delivering different use cases based on this data.
Aiia – FEU21 – Aiia demoed its technology at FinovateEurope 2021 in London. The leading open banking platform in Northern Europe, the company provides open banking services to a sizable number of financial instituitons including Lunar, Pleo, DNB, and Santander Consumer Bank. Aiia was acquired by Mastercard in 2021.
DigiShares – FS21 – DigiShares introduced itself to Finovate audiences at FinovateSpring 2021 in San Francisco. The company offers a white-label tokenization platform for real estate, bringing both automation and liquidity to the property market.
Here is our look at fintech innovation around the world.
Asia-Pacific
Vietnamese fintech startup M_Service, operator of mobile e-wallet Momo, secured $28 million (£ 19.7 million) in funding.
A new inclusive instant payment system (IIPS), Higala, launched in the Philippines.
Fintech Australia and the Thai Fintech Association signed a Memorandum of Understanding to foster fintech capabilities between the two countries.
Sub-Saharan Africa
The Central Bank of Nigeria paused account opening for new customers at four fintechs: Kuda Bank, Moniepoint, OPay, and Palmpay.
Digital financial solutions provider Payless Africa launched in Kenya.
FX and cross-border payments provider Crown Agents Bank teamed up with business platform Invest Africa.
Central and Eastern Europe
Norway-based digital identity solution provider Signicat became the first international aggregator to integrate mojeID Poland into its digital identity portfolio.
Romanian fintech Finqware teamed up with FwF to help European companies automate financial operations.
Lithuanian fintech Softloans raised $1 million (€1 million) in pre-seed funding.
Middle East and Northern Africa
National Bank of Iraq (NBI) went live with core banking and payments technology from Temenos.
Egypt’s Bokraraised $4.6 million in pre-seed funding for its platform that offers investment products via asset backed securities.
Central and Southern Asia
Bangladesh-based Eastern Bank (EBL) teamed up with Mastercard to launch a dual currency prepaid card for medical tourists in India.
Indian cross-border payments platform BriskPE secured $5 million in seed funding.
Bank of Thailand launched QR code cross-border payments to India.
Latin America and the Caribbean
Brazil-based banking-as-a-service company QI Tech became the country’s latest unicorn after securing an extension of its $200 million Series B round from last October.
Uruguyan cross-border payment platform dLocal partnered with online English-learning platform Open English.
Brazilian fintech Nubanklaunched its new banking experience Nubank+, offering cashback, streaming video courtesy of a partnership with Max, and more.
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.
