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Canadian Government Selects OutsideIQ to Bring DDIQ to Brazil and London

By Julie Muhn (@julieschicktanz) Posted on June 28, 2016
Categories: OutsideIQ

Toronto-based OutsideIQ has been selected by the Canadian government to showcase their products on two Canadian fintech trade missions, one to Brazil and the other to London.

The company will meet with local financial institutions and others in the fintech industry. OutsideIQ’s CEO Dan Adamson said that the missions will enable the company “to collaborate with other fintech leaders and find partners that will adopt and implement [its] solutions.”

OutsideIQ will showcase its DDIQ platform which it debuted at FinovateSpring 2016. The product is already being used at “top, global financial institutions” to mitigate risk by generating profiles of individuals and companies. The technology uses artificial intelligence to imitate human judgement and offer auditable reports for regulators.

Dan Adamson, CEO and founder of OutsideIQ, demoed the DDIQ API at FinDEVr New York 2016.

Earlier this month OutsideIQ formed a distribution partnership with Alacra, a KYC and reference data management platform. At FinDEVr New York 2016, company CEO and founder Dan Adamson showed how developers can use OutsideIQ’s API.

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Lending Club Appoints Scott Sanborn as CEO

By Julie Muhn (@julieschicktanz) Posted on June 28, 2016
Categories: Lending Club

Even if you’re not a fintech fanatic, you likely know that in early May, Lending Club’s CEO resigned amid accusations of loan-documentation errors. At the time CMO Scott Sanborn and director Hans Morris stepped in as acting co-CEOs. Today the company announced the official appointment of Sanborn (pictured) as CEO and Morris as board chairman.

This bit of stability was enough to send the San Francisco-based company’s shares up 6% this morning after having tumbled 61% since the start of this year; however, with the good news, comes a flip side. Lending Club cut 179 jobs—12% of its workforce—as a reaction to lower loan volumes in the second quarter and in recognition that “fully restoring investor confidence may take time.” The company expects loan volumes for the second quarter of this year to be one-third less than its first quarter volume of $2.75 billion.

Lending Club will spend $9 million this quarter on investor incentives and $20 million on the ripple effects of job cuts—severance pay and employee-retention efforts—and advisory relationships. The company holds its annual meeting later today.

Founded in 2006, Lending Club demoed at FinovateSpring 2009 and at the inaugural Finovate in 2007.

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Finovate Alumni News

By David Penn Posted on June 28, 2016
Categories: Avalara, Digital Insight, IBM, Jack Henry, Lending Club, OutsideIQ, Striata, TSYS

On Finovate.com

IBM Opens Bluemix Garage in New York City

Lending Club Appoints Scott Sanborn as CEO

Canadian Government Selects OutsideIQ to Bring DDIQ to Brazil and London

On FinDEVr.com

Avalara Adds New Stripe Integration, Earns Dual Honors at American Business Awards

Around the web

Jack Henry & Associates launches new app collaboration platform, JHA Marketplace.

Digital Insight gives customers pre-login look at bank balances via their mobile banking app.

Absa Stockbrokers and Portfolio Management has implemented the Secure Document Repository solution from Striata.

TSYS Named to The Civic 50 in 2016

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.

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Fintech Fundings: 113 Companies Raised $1.7 Billion in May

By Jim Bruene Posted on June 27, 2016
Categories: Uncategorized

Total fundings worldwide in May were $1.7 billion across 112 deals and 1 IPO. The weekly details can be found through the following links:

$590 million the last week of May (see below)
$420 million the week ending May 20
$390 million the week ending May 13
$270 million the week ending May 6

The final week of the month saw 29 companies raise $592 million, including $238 in Cotiviti’s IPO. Venture funding was $354 million, of which just $100,000 was debt.

Two Finovate alums raised substantial rounds:

TransferWise raised $26 million, at a $1.1 billion valuation, for its international funds-transfer service
DashLane raised $22.5 million to fund growth of its digital password-management system

The total number of deals YTD stands at 551, 80% more than last year’s 306. Total dollars raised YTD is now $15.7 billion, more than twice the $7.2 billion raised during the same period a year ago.

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Fintech deals by size from 21 May to 27 May 2016:

Cotiviti
Healthcare payments analytics
Latest round: $238 million IPO
Total raised: Unknown
HQ: Atlanta, Gerogia
Tags: SMB, enterprise, healthcare, payment, insurance, bookkeeping, analytics, cost savings
Source: FT Partners

Weidal
P2P lending platform
Latest round: $153 million Series C
Total raised: $177 million
HQ: Hangzhou, China
Tags: Consumer, lending, peer-to-peer, credit, underwriting, investing
Source: Crunchbase

Nvest
Crowdsourced investment information
Latest round: $30 million Series D
Total raised: $57.2 million
HQ: Toronto, Ontario, Canada
Tags: Consumer, investors, advisers, investing, trading, wealth management
Source: Crunchbase

TransferWise
International funds transfer network
Latest round: $26 million Series D
Total raised: $116.4 million
HQ: London, England, United Kingdom
Tags: Consumer, SMB, payments, remittances, foreign exchange, fx, Finovate alum
Source: Finovate

Carson Group
Wealth management platform
Latest round: $35 million
Total raised: $35 million
HQ: Omaha, Nebraska
Tags: Advisers, investing, wealth management, trading
Source: Crunchbase

Dashlane
Password management and secure digital wallet
Latest round: $22.5 million Series C
Total raised: $52.5 million
HQ: California
Tags: Consumer, B2B2C, password management, security, Finovate alum
Source: Finovate

Invest.com
Online alternative investments
Latest round: $20 million
Total raised: $20 million
HQ: Limassol, Cyprus
Tags: Consumer, investing, alt-investments, trading, wealth management, advisers
Source: Crunchbase

AutoFi
Point-of-sale system for vehicles
Latest round: $17 million
Total raised: $19.5 million
HQ: San Francisco, California
Tags: Consumer, B2B2C, credit, lending, auto lending, indirect loans, underwriting
Source: Crunchbase

NetWealth
Wealth management platform
Latest round: $9.6 million Angel
Total raised: $9.6 million
HQ: London, England, United Kingdom
Tags: Consumer, advisers, investing, trading, asset management
Source: FT Partners

TrueEX
Electronic execution platforms for interest rate swaps
Latest round: $9.2 million Series A
Total raised: $33.7 million
HQ: New York City
Tags: Enterprise, investing, trading
Source: Crunchbase

Konfio
Alt-lender to small businesses
Latest round: $8 million Series A
Total raised: $8 million
HQ: Mexico City
Tags: SMB, credit, commercial loans, lending, underwriting
Source: Crunchbase

zlien
Lien rights platform
Latest round: $5.0 million Series A
Total raised: $6.77 million
HQ: New Orleans, Louisiana
Tags: SMB, commercial lending, construction loans, security, underwriting
Source: Crunchbase

Syndicate Room
Equity crowdfunding platform
Latest round: $4.6 million Series A
Total raised: $8 million
HQ: Cambridge, England, United Kingdom
Tags: Consumer, SMB, investing, equity, P2P, peer-to-peer
Source: Crunchbase

Jirnexu
Mobile sales and fulfillment for financial institutions
Latest round: $3 million
Total raised: $3 million
HQ: Kuala Lumpur, Malaysia
Tags: Enterprise, online marketing, account opening, marketing, lead gen
Source: FT Partners

Clarity Money
Personal finance management app
Latest round: $2.5 million
Total raised: $2.5 million
HQ: New York City, New York
Tags: Consumer, personal finance, PFM, mobile
Source: Crunchbase

United Mobile Technology
Mobile payments platform, iPAYst
Latest round: $2.2 million Series A
Total raised: $2.2 million
HQ: Munich, Germany
Tags: Consumer, B2B2C, payments, analytics, big data
Source: FT Partners

ClearTax
Online tax preparation
Latest round: $2 million Seed
Total raised: $15.4 million
HQ: New Delhi, India
Tags: Consumer, taxes, personal finance, tax prep
Source: Crunchbase

Penny
Personal finance coach
Latest round: $1.2 million Seed
Total raised: $1.2 million
HQ: San Francisco, California
Tags: Consumer, personal finance, PFM, service, sales, chatbot
Source: Crunchbase

GoalWise
Online investment manager
Latest round: $1 million Seed
Total raised: $1 million
HQ: Bangalore, India
Tags: Consumer, investing, trading, advisers, wealth management
Source: Crunchbase

WiseAlpha
Online investment platform for secured loans
Latest round: $870,000 Equity Crowdfunding
Total raised: $1.28 million
HQ: London, England, UK
Tags: Consumer, advisers, investing, commercial loans
Source: Crunchbase

LeaseOnline
Online automobile leasing service
Latest round: $725,000
Total raised: $725,000
HQ: Sweden
Tags: Consumer, credit, auto loans, lending, underwriting
Source: Crunchbase

Pleo
Company credit cards
Latest round: $560,000 Seed
Total raised: $560,000
HQ: London, England, United Kingdom
Tags: SMB, credit cards, expense management, bookkeeping, controls, security
Source: Crunchbase

Flattr
Micropayments
Latest round: $335,000 Seed
Total raised: $2.43 million
HQ: Malmo, Sweden
Tags: SMB, B2B2C, payments
Source: Crunchbase

Accredify
Retail investor services platform
Latest round: $100,000 Debt
Total raised: $100,000
HQ: Miami, Florida
Tags: Consumer, advisers, investing, trading, deal management
Source: Crunchbase

WealthyLife
Financial literacy app
Latest round: $10,000 Grant (from JP Morgan)
Total raised: $85,000
HQ: California
Tags: Consumer, personal finance information, gamification, underbanked, mobile
Source: Crunchbase

BitOasis
Bitcoin exchange
Latest round: Not disclosed
Total raised: Unknown
HQ: Dubai, UAE
Tags: Consumer, crypto-currency, bitcoin, blockchain
Source: Crunchbase

Chainlab
Blockchain-based smart contracts (aka Wings)
Latest round: Undisclosed Seed
Total raised: Unknown
HQ: Tel Aviv, Israel
Tags: SMB, blockchain, bitcoin
Source: Crunchbase

Expensya
Expense reporting
Latest round: Unknown
Total raised: Unknown
HQ: Paris, France
Tags: SMB, bookkeeping, accounting, employee management
Source: Crunchbase

Pepins
Equity crowdfunding platform
Latest round: Undisclosed
Total raised: Unkown
HQ: Nacka, Sweden
Tags: Consumer, SMB, equity investing, investors
Source: Crunchbase

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Avoka Locks in $12 Million in New Investment

By David Penn Posted on June 27, 2016
Categories: Avoka

Digital customer acquisition specialist and multiple Best of Show winner Avoka has picked up $12 million in new investment. The venture round featured participation from a variety of institutions and professional fintech investors in Australia and is the first major funding for the company since 2013. Avoka CEO Phil Copeland said the new investment will be used to “accelerate our already strong organic growth prospects, expand our product capabilities … and explore new markets.”

With regard to products, Copeland highlighted Avoka Transact, saying that the investment will help the company continue to build and develop the technology, which he called “the leading single platform for driving customer-centric digital transformation.” He added that part of further developing his company’s solutions will be to integrate fraud, identity management, fund transfer, and core banking functionality into the platform.

Avoka’s Kevin Mortimer, technical director, and Derek Corcoran, chief experience officer, demonstrated Avoka Transaction Effort Score at FinovateEurope 2016 in London.

Underscoring the importance of growth and expansion to the company’s past and future, Copeland noted that not only did 65% of Avoka’s revenue come from North American and European markets, but also that the percentage “is expected to grow substantially” in the wake of this latest funding round. Advising on the deal was Moelis & Company whose managing director, Ben Wong, called the company “a great example of an Australian technology company with a global footprint based on best-of-breed technology being adopted by global corporate customers.”

Recent headlines for Avoka include a new partnership with fellow Finovate alum Mitek to build a new mobile onboarding solution in May. In April, Beyond Bank won the Celent model bank award with a customer-engagement platform from Avoka, the same month Avoka partnered with Finovate alum eSignLive to enable 100% digital customer acquisition. Avoka was named to the Top Ten FinTech Worldwide by KPMG in March.

Founded in 2002 in Sydney, Australia, and co-headquartered in Denver, Colorado, Avoka demonstrated its Transaction Effort Score (TES) at FinovateEurope 2016. The company has more than 95 working in offices in Sydney, Denver, and London and includes 2 global banks; 5 of the top-50 banks in the U.S.; and 4 of the top-10 banks in Australia among its more than 80 customers.

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Encap Security Acquired by Client, AllClear ID

By Julie Muhn (@julieschicktanz) Posted on June 27, 2016
Categories: Encap, Mergers & Acquisitions

Software-based multifactor-authentication provider Encap Security has been acquired by AllClear ID, an Austin-based company that provides data-breach and identity-protection services. Terms of the deal were not disclosed.

In a blog post announcing the change, Norway-based Encap made it clear that it will proceed with business as usual. The company will not only support its Smarter Authentication platform for new and existing customers, but also enhance its offerings by leveraging AllClear ID’s technology.

AllClear ID will use the acquisition to enhance its existing offerings using Encap’s device-authentication and e-signature technology. The move also allows AllClear ID to establish a presence in Europe to “capitalize on emerging opportunities, including major regulatory changes such as the introduction of the General Data Protection Regulation (GDPR) and the Payment Services Directive (PSD II).”

Adam Dolby, Encap vice president of business development, presented at FinovateFall 2015 in New York.

Founded in 2007, Encap debuted Omnichannel Enablement platform at FinovateFall 2015. VP of Business Development Adam Dolby began his presentation by describing why people dislike security. Dolby continued the demo by showing how Encap keeps things simple for end users by keeping the complexities of security behind-the-scenes.

Last week Norway-based BankID partnered with Encap to pilot in-app authentication for its online identity service. In the spring of 2015, Encap integrated with Apple’s TouchID to help financial institutions leverage a new authentication method.

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LendingTree Launches CRA-Eligibility Tool

By Julie Muhn (@julieschicktanz) Posted on June 27, 2016
Categories: LendingTree

Online loan marketplace LendingTree launched a new tool to help lenders comply with Community Reinvestment Act (CRA) regulations, which were enacted in 1977 to encourage banks to rebuild communities.

Banks subject to CRA evaluations can use the new tool to identify low- to moderate-income borrowers, extending credit to typically underserved individuals. Doug Lebda, founder and CEO of LendingTree, said the new capability “offers more financing opportunities to borrowers who may otherwise find difficulty in securing loans due to income requirements.”

At FinovateSpring 2015 North Carolina-based LendingTree debuted My LendingTree, an online dashboard where users view all credit-related accounts. LendingTree alerts users to money-saving and other opportunities through its recommendation engine.

Earlier this month, LendingTree partnered with the Innovative Lending Platform Association in building a small business lending disclosure model, SMART Box. The model not only offers transparency to small business borrowers, it also provides a concise way for lenders to explain the loan terms.

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D3 Banking Brings in $10 Million from West Partners

By Julie Muhn (@julieschicktanz) Posted on June 27, 2016
Categories: D3 Banking

Nebraska-based D3 Banking secured $10 million from West Partners this week to bolster its Data Driven Digital banking technology. As part of the deal, San Diego-based West Partners is offering D3 the ability to borrow under a 3-year credit facility.

After today’s round, D3’s funding totals just over $27 million. CEO Mark Vipond said that West Partners offered the funds in response to recognizing “the pace and direction of change in the digital landscapes and the role D3 Banking can play in arming banks and credit unions with the tools they need to competitively differentiate themselves.”

D3 will use the funds to expand its digital banking offering to keep up with demand, invest in R&D and build its team. The company works with banks such as Arvest, First Tennessee Bank, and IBERIABANK and counts more than 1.5 million end users of its personalized banking offerings.

At FinovateFall 2015, D3 launched its small business banking offering that provides PFM tools to help entrepreneurs manage their small business. The platform analyzes transactions to generate cash flow and income statements and offer budget suggestions. In addition, banks gain visibility into the cash flow of the business, which provides insight into optimal times to extend loan offers and other banking products.

Earlier this year D3 integrated FI Navigator’s mobile banking module, furnishing the company with market intelligence on mobile banking services offered by 6,000 financial institutions. D3 was founded in 1997.

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Klarna Raises $35 Million in “First Small Step” into Debt Financing

By David Penn Posted on June 27, 2016
Categories: Klarna

One small step for Klarna. One giant leap for fintechs considering financing beyond equity investment.

The Swedish payments innovator is raising $32.2 million (300 million crowns) via a subordinated-note sale to “a limited number of large Nordic investors.” The 10-year, floating-rate notes come with an initial 4% coupon, which is based on the 3-month STIBOR plus 4.5%.

Speaking about the financing, Klarna’s Erik Engellau-Nilsson said that the funding was the company’s “first small step to a wider presence in debt capital markets.” The goal of the financing was first to fund Klarna’s accelerated growth, which Engellau-Nilsson credited to expansion into U.S. and U.K. markets. He said the second goal was to “test the debt capital markets, and see what the appetite was like.”

Jakob Söderbaum, SVP sales, demonstrated Klarna at FinovateSpring 2012 in San Francisco.

Testing the debt capital market will help Klarna diversify its funding sources. The company has raised more than $285 million in equity including £90 million in private equity to finance the acquisition of Sofort in 2014.

While much of the growing use of debt financing in fintech can be attributed to the rise of alternative lenders who may be institutionally more comfortable with debt, Klarna’s latest financing is a reminder that the debt capital markets are an option for a wide variety of fintechs. Consider the $60 million debt financing deal for Finovate alum Yapstone (payments); the $2.5 million debt financing for Socure; and $3 million in venture debt for ID.me (authentication); and the $1 million in debt financing for DeviceFidelity (hardware). Ahead of this latest financing, Klarna was believed to have a valuation of more than $2 billion.

Available at 65,000 online stores and with 45 million consumers using the technology, Klarna enables more efficient e-commerce by allowing shoppers to receive goods first and then pay for them within 14 days of delivery. Klarna assumes all credit and fraud risk, making the process safer for online merchants, and requires only minimal, top-of-mind information from consumers (i.e., name and address). The company says its revenues grew by 27% year-over-year (2.2 billion crowns in 2014 versus 2.8 billion crowns in 2015) and expects revenue gains of 40% in 2016 due in large part to Klarna’s U.S. expansion last fall.

Founded in 2005 and headquartered in Stockholm, Sweden, Klarna demonstrated its payment technology at FinovateSpring 2012. In June, the company was named to the CNBC Disruptor 50 list for a second year in a row and in May, Klarna announced that its payment-processing technology would be made available to brick-and-mortar merchants. The company announced a partnership with UK e-commerce host, EKM in April, the same month Klarna earned a spot on FinTechCity’s inaugural FinTech50 Hall of Fame.

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Finovate Alumni News

By David Penn Posted on June 27, 2016
Categories: Asseco, Avoka, D3 Banking, Encap, Fidor Bank, Kasasa, Kensho, Klarna, LendingTree, Novabase, On Deck Capital, Ripple, SafetyPay

On Finovate.com

Klarna Raises $35 Million in ‘First Small Step” into Debt Financing

D3 Banking Brings in $10 Million from West Partners

LendingTree Launches CRA-Eligibility Tool

Encap Security Acquired by Client, AllClear ID

Avoka Locks in $12 Million in New Investment

Around the web

Banco CTT goes live with customer onboarding solution developed by Novabase.

Canada’s ATB Financial and Germany’s ReiseBank use Ripple to complete world’s first banking transfer using blockchain.

Wired UK profiles Fidor, “the fintech bank run by its customers.”

Asseco South Eastern Europe (SEE) named a Representative Vendor in Gartner’s report on open unified digital banking platforms.

Fortune.com’s list of the five hottest companies in fintech features alums Kensho and Ripple.

Kasasa’s MoneyIsland money-management game for children ranks among iTunes’ most popular apps.

Chip-Chap bitcoin marketplace leverages SafetyPay as a payment method.

OnDeck launches Accountant Advisor Program to help accountants arrange financing for their small business clients.

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.

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OurCrowd Wins Red Herring Awards; Announces Partnerships with Bayer, DuPont

By David Penn Posted on June 24, 2016
Categories: OurCrowd

It’s been a busy June for Jerusalem-based, crowd-investing platform OurCrowd. The company picked up a Red Herring award; announced partnerships with Bayer, Dupont, and FinistereAG; and earned positive press from The Times UK and Wired.

“Start-up companies don’t just need cash, they need help,” OurCrowd founder Jon Medved this week told James Hurley of The Times UK. Calling his crowd-investing platform a combination of “old-fashioned venture capital and new-age crowdfunding,” Medved emphasized the amount of due diligence performed in selecting portfolio companies, and said only 2% of the companies seeking a spot on the platform make it.

OurCrowd’s platform enables accredited investors to provide capital to early-stage startups. With as little as $10,000, investors can participate in platform-sponsored funding rounds to purchase equity in the companies. When the funding goal is reached and the round ended, a representative from OurCrowd joins the startup’s board to help advise the company and look after the interests of investors. It is this level of engagement that convinces Medved that private company investment is often a better route for tech startups than going public. “If you really want to have output from your investment,” Medved told Wired UK earlier this month, “you’ve got to be in private company investment.”

CPO Shai Ben-Tovim and VP of Engineering Oshrat Kfir demonstrated the OurCrowd app at FinovateSpring 2016 in San Jose, California.

OurCrowd was one of 19 Israeli companies earning a spot in the RedHerring 2016 Europe Top 100. Not only did OurCrowd hit the Top 100, but also two companies in OurCrowd’s portfolio—CropX and Zebra Medical Vision—made the cut. “There is no doubt about it,” the OurCrowd blog read today, “Israel has become a world leader in startup success.”

OurCrowd’s collaboration with Bayer, DuPont, and FinstereAG has led to the launch of a new accelerator fund, Radicle, that is designed to help foster innovation in early stage agricultural technology startups. The $15 million fund focuses on agricultural technologies that contribute to productivity, sustainability, and quality such as genomics, seed tech, and disruptive or novel farm systems. OurCrowd General Partner David Stark suggested that his firm had a unique understanding of the challenges and opportunities of technology innovations in agriculture.

“Forced to overcome the challenge of making the desert bloom, Israel has a long history of agricultural innovation and today is home to a multitude of world-class AgTech startups,” Stark said. OurCrowd portfolio company and Red Herring Europe Top-100 award-winner CropX specializes in adaptive irrigation technologies.

Founded in 2013 and headquartered in Jerusalem, Israel, OurCrowd demoed its app at FinovateSpring 2016. Via its platform, OurCrowd and investors have put more than $220 million in capital into 100 portfolio companies, with six exits in the past three years.

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Azimo to Launch Facebook Messenger Bot

By Julie Muhn (@julieschicktanz) Posted on June 24, 2016
Categories: Azimo

Global money transfer platform Azimo recently announced plans to make sending and receiving money more social by launching a chatbot for Facebook Messenger.

The U.K.-based company will use artificial intelligence and machine learning to create a natural, human-like conversational chat experience. At a WIRED event in London, the company’s co-founder Marta Krupinska said, “We want to get to a point where the experience is like going into a branch.” Krupinska went on to note that, in addition to simply conducting transactions, users can interact with the bot as they would a human, for example, by asking about international transfer rates.

This is the second step we’ve seen Azimo take toward integrating its money-transfer services into messaging applications. Last month the company raked in $15 million from Rakuten, the owner of messaging service Viber. Azimo says it plans to integrate the funds into messaging services.

Azimo, which is already using AI in an algorithm to detect originality of scanned documents, lets users send money to and from 204 different countries. The company debuted at FinovateEurope 2013 in London and prides itself on being a cheaper, faster, and simpler way to send money across the globe.

Founded in 2012, Azimo has raised a total of $40 million; its estimated value is $100 million.

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