Betterment Raises $100 Million Series E; Valuation Boosted to $700 Million

Betterment Raises $100 Million Series E; Valuation Boosted to $700 Million
By David Penn Posted on
Categories: Betterment, Funding, Fundings

Betterment2_homepage_Mar2016

Come for the $100 million Series E. Stay for the $700 million valuation.

Betterment, one of the largest robo-advisers in the U.S., has raised $100 million in a Series E round led by Sweden’s Kinnevik, boosting the company’s valuation to $700 million. Also participating in the round were current investors Anthemis Group, Bessemer Venture Partners, Francisco Partners, and Menlo Ventures.

Kinnevik CEO Lorenzo Grab described Betterment as both a fast-growing and “already established” player in the field of online asset management, and credited Betterment for developing “innovative and easy-to-use services.”

Betterment_stage_FF2011

Pictured (left to right): Betterment CEO Jon Stein and COO Eli Broverman demonstrating the Multiple Goals feature of the Betterment platform at FinovateFall 2011.

“Betterment shares many of the principles that have made other Kinnevik investment companies successful,” Grabau said. To this point, Grabau listed Betterment’s commitment to affordability, the company’s entrepreneurial spirit, and the idea of that businesses should contribute to their communities. “Everyone should have access to unconflicted and low-cost financial services that enable them to reach their goals,” Grabau said. Kinnevik reportedly invested $65 million of the $100 million total, taking home a 9.3% of share capital in Betterment.

From the perspective of Betterment CEO Jon Stein, it was love at first sight. “From our first meeting,” Stein said, “it was clear that we shared the same values of what a modern day financial company would look like.”

“Our goal is to become the central financial relationship for our clients,” Stein added. “Over the past year, we’ve made great progress toward that goal with features like RetireGuide and account aggregation, but there’s still work to do.”

Founded in 2008 and headquartered in New York City, Betterment demonstrated the Multiple Goals feature of its investment platform at FinovateFall 2011. Betterment provides investors with a globally diversified portfolio of low-cost index exchange-traded funds, along with personalized, goal-based investment advice. And more than 140,000 customers have invested more than $3.5 billion with Betterment since the company’s inception.

In January, Betterment launched its turnkey 401(k) service, Betterment for Business and, earlier this month, the company announced a new account aggregation feature that would enable Betterment customers to sync accounts at other financial institutions and see their full net worth via Betterment’s platform. In partnership with Quovo, Betterment made its FinDEVr debut at FinDEVr New York this week.

 

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Welcome to Day 2 of FinDEVr New York

By Julie Muhn (@julieschicktanz) Posted on
Categories: FinDEVr 2016 New York

Stage

Yesterday’s presentations at FinDEVr New York here at the New World Stages Theatre infused us with a big dose of energy, and today will be no different.

Today’s registration opens at 9:00 AM with continental breakfast, so grab a coffee and prepare for the day. If you need a ticket, Day-2 tickets are available for here or purchase one at the registration desk.

Both tracks of presentations begin at 10:00 AM. Here’s today’s lineup:

Time

Stage 2 Presentation

Stage 4 Presentation
10:05 DigiByte Quovo & Betterment
10:25 Fidor Bank OutsideIQ
10:40 Intermission Intermission
11:10 i-exceed VIX Verify
11:30 Honkio Nubank
11:50 Solace Systems Prevoty
12:05 Lunch Lunch
1:00 Mobeam Craft Silicon
1:20 EdgeVerve Systems FICO
1:40 Green Key Technologies ScientiaMobile
2:00 Accusoft PokitDok
2:15 Intermission Intermission
2:45 Magnet NYMBUS
3:05 SpeechPro Streamdata.io
3:25 Smart Token Chain Symbiont
The final networking session with open bar and appetizers will begin after the final demo and will last until 5:00 PM, plenty of time to grab a drink and chat with presenters at their booths.
Thanks to everyone for a great first day of the inaugural FinDEVr New York. We’re looking forward to a successful second day of the event!

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CFPB Sets Sights on Data-Security Practices

CFPB Sets Sights on Data-Security Practices
By Jim Bruene Posted on
Categories: CFPB, Dwolla, Regulations

_____________________________

Guest post by Erica A.N. Kramer and Justin B. Hosie*
________________________________

caution_signIt’s hard to imagine that the Consumer Financial Protection Bureau (CFPB), which is not tasked with enforcing information-safeguarding (Congress left that with the FTC), would impose civil fines on a company for safeguarding representations, when the company in question didn’t have a data breach.

It’s even harder to imagine such an action when the very same agency announced a policy to encourage consumer-friendly financial innovations just a few weeks before imposing the fines. However, we now live in an age when the CFPB seeks to encourage financial innovation one day and stifle it in the next, even when no consumer harm appears to exist.

What happened
Earlier this month, the CFPB announced a consent order in its “first data-security action.” The announcement sends a clear message that the CFPB now has its sights on data-security practices. This enforcement action clearly shows that the CFPB is once again stretching its authority by simply labeling a representation as deceptive and blurring the lines between federal agencies’ jurisdictions. Consequently, we’re likely to see a significant increase of regulatory scrutiny in the data-security arena in the upcoming months.

DwollaLogo2015The action targeted Dwolla, a Finovate alum operating a digital payment network that allows members to send and receive money. It has more than 650,000 members and transfers as much as $5 million per day. The CFPB alleged that Dwolla misrepresented its data-security practices by describing its network as “safe” and “secure” and its data-security practices as exceeding industry standards. While there appears to have been no consumer harm whatsoever, according to the CFPB’s unilateral assertions, Dwolla’s data-security practices did not live up to its claims and the representations constituted deceptive acts and practices. As a result, the CFPB imposed restrictions on Dwolla’s future conduct and ordered Dwolla to pay $100,000 into the CFPB Civil Penalty Fund.

Implications
Imposing civil penalties on innovative companies like Dwolla seems particularly heavy-handed when you consider the lack of evidence of consumer harm. Despite the extremely high volume of money and personal information moving through its network, Dwolla never experienced a data breach or received a consumer complaint regarding its data-security policies.

As Dwolla explained in its blog on March 2, “Dwolla was incorporating new ideas because we wanted to build a safer product, but at the time we may not have chosen the best language and comparisons to describe some of our capabilities.” Dwolla also explained that it is continually learning, growing, and adjusting its data-security practices to ensure members are provided with the security they expect. Unfortunately, the CFPB’s order demonstrates little tolerance for the growing pains and adjustments often accompanied by developing new technologies.

Recommendations
Given the CFPB’s none-too-subtle foreshadowing that more data-security-enforcement actions are on the horizon, we urge Fintech companies to consider several important factors:

  • Understate, don’t exaggerate: The CFPB has little tolerance for puffery when it comes to data security. Make sure your claims match your practices.
  • Act, don’t react: Address potential data-security vulnerabilities as soon as they come to your attention. Don’t wait for a problem to arise.
  • Evolve your practices and your claims: Make sure that your data-security practices are growing and changing in lockstep with your product’s development.
  • Follow the rules: Make compliance your top priority. Institute and follow a robust compliance management system that includes regular oversight and input by your company’s management and board.

Since there’s no way to avoid regulatory scrutiny, make sure your data-security practices are above reproach before the CFPB set its sights on your company.

——————-

*Justin B. Hosie is a partner at Hudson Cook LLP, licensed to practice law in Florida and Tennessee. Erica A.N. Kramer is an associate at Hudson Cook LLP, licensed to practice law in Florida. You can contact Justin for more information at 423-490-7560 or [email protected].

 

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FinovateSpring Sneak Peek: SwipeStox

FinovateSpring Sneak Peek: SwipeStox
By David Penn Posted on
Categories: FinovateSpring 2016 Sneak Peek, Swipestox

SwipeStox_homepage_Mar2016

FS2016-wdateA look at the companies demoing live to 1,500+ fintech professionals May 10 & 11. Register today.

SwipeStox is the first mobile social trading app that allows everyone to trade Forex, Indices, CFDs, and Equities simply by copying single trades. We connect traders around the globe in one network.

Features:

  • Open API allows integration with every broker and bank worldwide
  • Fast and easy account sync and creation
  • SwipeStox pages: giving every broker the possibility to acquire clients through SwipeStox

Why it’s great
SwipeStox is called the “Tinder for Trading” because you can swipe for trades. It is easy-to-use, addictive, and rewarding, SwipeStox is the fastest growing social trading platform worldwide.

Presenters

SwipeStox_BenjaminBilskiBenjamin Bilski, founder & CEO

Bilski is a serial entrepreneur and former professional swimmer. At the age of 21, he co-founded angelplatz.de. one of Germany’s leading e-commerce shops for fishing equipment.
LinkedIn

 

SwipeStox_WladimirHuberWladimir Huber, co-founder & managing director

Huber worked for several years as a professional trader in a German-based investment bank, founded an eCommerce startup and holds an M.A. in finance from Leuphana University.
LinkedIn

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FinovateSpring Sneak Peek: Payment Ninja

FinovateSpring Sneak Peek: Payment Ninja
By David Penn Posted on
Categories: FinovateSpring 2016 Sneak Peek, Payment Ninja

PaymentNinja_homepage_Mar2016

FS2016-wdateA look at the companies demoing live to +1,500 fintech professionals on May 10 and 11, 2016. Register today.

Payment Ninja is the first payment company in the world to provide payment acceptance to merchants, 100% free of any fees, commissions, or interchange.

Features:

  • 100% free international payment processing
  • Programmatic remarketing based on customers’ purchase behavior
  • Available for any company in any country around the world

Why it’s great
Currently, payment processing costs take more than 10% of profit from a typical SME. Our mission is to help companies around the world by eliminating these costs, helping to sell more with value-added tools and big data.

Presenters

Daria Dubinina, CEOPaymentNinja_DariaDubinina

Former RBK Money executive where she worked her way up from customer support representative to VP of global sales.
LinkedIn

 

PaymentNinja_AndreyMorozovAndrey Morozov, co-founder

Morozov is CEO of RBK Money, a multimillion “European PayPal.”
LinkedIn

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FinovateSpring Sneak Peek: meetinvest

FinovateSpring Sneak Peek: meetinvest
By David Penn Posted on
Categories: FinovateSpring 2016 Sneak Peek, meetinvest AG

meetinvest_homepage_Mar2016

FS2016-wdateA look at the companies demoing live to 1,500+ fintech professionals May 10 & 11. Register today.

meetinvest presents the world’s first single stock, expert-based, algorithm-driven robo-advisor as a white-label solution for the financial services industry targeting investors worldwide.

Features:

  • A ‘role-model’ approach towards stock investing
  • Using proven ‘recipes’ of 30+ world class investment experts such as Buffett, Templeton.
  • Algorithmic-driven portfolio management, 100% user autonomy.

Why it’s great

Investors are now empowered to invest like professionals using a toolkit that employs proven expert ‘recipes’ with state-of-the-art portfolio-management techniques.

Presenter: Michel Jacquemai, Co-foundermeetinvest_micheljacquemai

Jacquemai has 22 years of experience in asset management, primarily in equities and hedge funds. He co-founded meetinvest to combine his know-how with the best expert strategies available worldwide.
LinkedIn

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FinovateSpring Sneak Peek: WorthFM

FinovateSpring Sneak Peek: WorthFM
By David Penn Posted on
Categories: FinovateSpring 2016 Sneak Peek, WorthFM

WorthFM_homepage_Mar2016

FS2016-wdateA look at the companies demoing live to 1,500+ fintech professionals May 10 & 11. Register today.

WorthFM is an all-digital investing and money management platform developed for emerging-to-mass affluent women.

Features:

  • Provides an entire cash management solution as well as portfolio management
  • Grows knowledge about investing as investments grow.
  • Filters guidance based on unique personality assessment.

Why it’s great

Women want WorthFM. Through our media partner, DailyWorth, we have nearly eight years of behavioral finance data on more than a million women. We built women the money management platform they’ve been waiting for.

Presenter

WorthFM_AmandaSteinbergAmanda Steinberg, CEO & Co-founder

A successful serial entrepreneur, Steinberg has 20+ years experience engineering digital solutions, raising venture capital, and creating companies for social good.
LinkedIn

 

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FinovateSpring Sneak Peek: LendingRobot

FinovateSpring Sneak Peek: LendingRobot
By David Penn Posted on
Categories: FinovateSpring 2016 Sneak Peek, LendingRobot

LendingRobot_homepage_Mar2016

FS2016-wdateA look at the companies demoing live to 1,500+ fintech professionals on May 10 and 11. Register today.

LendingRobot is the first robo-adviser for peer lending. It combines a user-friendly interface with sophisticated, machine-learning algorithms to help individual investors get steady returns.

Lending Robot features:

  • A new way to monitor investments in peer lending
  • Benefits from LendingRobot’s extensive experience in the field
  • 100% free, no commitment

Why it’s great
LendingRobot is really, really easy to use. But it uses some really, really fancy software to provide really, really good returns to individual investors.

Presenters

LendingRobot_EmmanuelMarotEmmanuel Marot, CEO

Marot is 27% financial quant, 25% entrepreneur, 20% designer, 18% in high tech, 12% in unconventional wisdom, and at least 2% wrong.
LinkedIn

 

LendingRobot_GiladGolanGilad Golan, President

Golan is a software developer and entrepreneur who loves building innovative products.
LinkedIn

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Welcome to Day One of FinDEVr New York

By David Penn Posted on
Categories: FinDEVr 2016 New York

FinDEVr_registration

It’s FinDEVr Day! After a pair of awesome developers conferences in Silicon Valley in 2014 and 2015, we are thrilled to share the show with audiences here on the East Coast.

The conference begins Tuesday morning with registration at 9 AM, and the first session kicks off just after 10 AM. The full schedule of presentations is available below.

Time

Stage 2 Presentation

Stage 4 Presentation
10:05 Flybits Markit
10:25 Avoka The Beast Apps
10:40 Intermission Intermission
11:10 Google Cloud Platform Praesidio
11:30 Sayula Aerospike
11:50 Financial Apps TokBox
12:05 Lunch Lunch
1:00 Mambu Braintree
1:20 Nostrum Group FairCom
1:40 Stealth Finicity
2:00 Thinking Capital Nexmo
2:15 Intermission Intermission
2:45 Hyperwallet Xignite
3:05 Stealth Forte
3:25 Stratumn OnDeck

The day ends with appetizers, an open bar, and the opportunity to meet, ask questions, and exchange ideas one-on-one with the presenters and fellow attendees.

Be sure to follow our Live Twitter feed @FinDEVr and if you join in the conversation, please add #FinDEVr to your tweets. We’re looking forward to a great first day of FinDEVr New York, and if you have any questions, visit our FAQ or email us at [email protected] for answers.

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Finovate Alumni News

By David Penn Posted on
Categories: Aire, Geezeo, GMC Software Technology, Klarna, Tuition.io, Vera

On Finovate.com

  • “Welcome to Day One of FinDEVr New York”

Around the web

  • Irish Tech News interviews Bryan Clagett, Geezeo CMO.
  • The Columbus Dispatch profiles Klarna and its efforts to make online commerce easier.
  • New York Times column on companies helping employees retire student debt features Tuition.io.
  • BankNXT Fintech Podcast chats with Aire founder, Aneesh Varma.
  • GMC Software introduces its Inspire Mobile Advantage solution that helps create a responsive, interactive and regulatory-compliant mobile experience.
  • Vera launches new IRM-as-a-Service platform to allow developers to use Vera’s SDK.

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: 28 Companies Raise $220 Million Week Ending March 25

By Jim Bruene Posted on
Categories: Funding

pig_sunglasses_money_croppedFor the 12th consecutive week, there were 20+ fintech fundings worldwide. Total dollar value was $218 million, which includes $29 million of debt. YTD, the total number of deals stands at 313, double last year’s 158.  Total dollars raised, $6.2 billion YTD, is also double the $3.2 billion at this point last year.

The number of deals was inflated somewhat by the six new fintech companies launched at YC’s demo day that we had not previously covered. In total, there were 13 fintech startups (or 15 by the Bank Innovations definition), 12% of the total YC W16 class of 109.

Three Finovate alums brought in new cash:

Here are the fintech deals by size from 19 March to 25 March 2016:

Open Lending
Automated lending solutions for financial institutions
Latest round: $40 million
Total raised: $50 million
HQ: Austin, Texas
Tags: Enterprise, lending, loans, credit, underwriting
Source: Crunchbase

Edgewater Markets
Foreign exchange aggregation & distribution
Latest round: $30 million Private Equity
Total raised: Unknown
HQ: New York City
Tags: Institutional, SMB, foreign exchange, FX, remittances, treasury
Source: Crunchbase

Flexiti Financial
Point-of-sale financing for retailers
Latest round: $25 million Debt
Total raised: Unknown
HQ: Toronto, Ontario, Canada
Tags: SMB, consumer lending, loans, POS, merchants, in-store financing
Source: Crunchbase

Maxwell Health
Payroll & beneifts platform
Latest round: $22 million Series C
Total raised: $56.4 million
HQ: Boston, Massachusetts
Tags: SMB, payroll, human resources, insurance, HR, benefits, healthcare
Source: Crunchbase

HomeUnion
Real estate investment marketplace
Latest round: $16 million Series B
Total raised: $21.5 million
HQ: Irvine, California
Tags: Consumers, lending, mortgage, credit, underwriting, investing
Source: Crunchbase

FriendSurance
Peer-to-peer insurance provider
Latest round: $15.3 million
Total raised: $15.3 million
HQ: Berlin, Germany
Tags: Consumers, insurance, P2P, crowdfunding
Source: Crunchbase

GoCardless
Recurring billing services for small businesses
Latest round: $13 million
Total raised: $24.8 million
HQ: London, England, UK
Tags: SMB, billing, payments, billpay, ebilling, Y Combinator (investor)
Source: Crunchbase

Kreditech Holding
Banking services for the underbanked
Latest round: $11 million (last part of $103 million Series C)
Total raised: $366 million (includes $215 million debt)
HQ: Hamburg, Germany
Tags: Consumers, lending, banking, underwriting, algorithmic banking, APIs, Finovate alum
Source: Finovate

GrouPay
Payment collection services from groups 
Latest round: $10.9 million
Total raised: $19.25 million
HQ: London, England, UK
Tags: SMB,SMB, billing, payments, billpay, ebilling
Source: Crunchbase

CurrencyFair
P2P international funds transfer marketplace
Latest round: $9 million
Total raised: $24.4 million
HQ: Dublin, Ireland
Tags: Consumers, SMB, remittances, FX, currency, payments, Finovate alum
Source: Finovate

Eliptic
Blockchain forensics tools
Latest round: $5 million
Total raised: $7 million
HQ: London, England, UK
Tags: Enterprise, SMB, blockchain, bitcoin, virtual currency, cryptocurrency, fraud, security
Source: Crunchbase

CrowdStreet
Commercial real estate crowdfunding marketplace
Latest round: $4.92 million Series A
Total raised: $6.27 million
HQ: Portland, Oregon
Tags: Consumers, lending, loans, credit, underwriting, real estate, commercial mortgage, investing, P2P, peer-to-peer
Source: Crunchbase

Stocard
Mobile wallet
Latest round: $4.5 million
Total raised: $6.66 million
HQ: Mannheim, Germany
Tags: Consumers, SMB, merchants, payments, loyalty, rewards, POS
Source: Crunchbase

Jumio
Authentication services
Latest round: $3.7 million Debt
Total raised: $36.7 million
HQ: Palo Alto, California
Tags: SMB, enterprise, fraud prevention, security, mobile account opening, Finovate alum
Source: Crunchbase, TechCrunch

Airwallex
Online foreign exchange services
Latest round: $2 million Angel
Total raised: $3 million
HQ: Melbourne, Australia
Tags: Consumers, lending, student loans, credit, underwriting
Source: Crunchbase

Fina Zero
Lending portal
Latest round: $1.2 million
Total raised: $1.2 million
HQ: Sweden
Tags: Consumers, lending, credit, price comparison, lead gen, discovery
Source: Crunchbase

Front Desk
Mobile business scheduling, invoicing & payments platform
Latest round: $1 million
Total raised: $15.7 million
HQ: Seattle, WA
Tags: SMB, invoicing, payments, accounts receivables, accounting bookkeeping
Source: FT Partners

RSK Labs
Smart contract platform tied to bitcoin
Latest round: $1 million
Total raised: $1 million
HQ: California
Tags: SMB, security, authentication, bitcoin, contracts, legal, fraud, cryptocurrency, blockchain
Source: FT Partners

Aspire Financial
Connects marketplace lenders to institutional capital
Latest round: $750,000 Seed
Total raised: $750,000
HQ: Toronto, Canada (Twitter)
Tags: Consumers, lending, student loans, credit, underwriting
Source: Crunchbase

Hockeystick
Financial data for private equity funds
Latest round: $600,000 Seed
Total raised: $600,000
HQ: Toronto, Ontario, Canada
Tags: Investors, big data, business intelligence, investing, capital markets
Source: Crunchbase

Creditseva.com
Credit management tools
Latest round: $360,000
Total raised: $375,000
HQ: Hyderabad, India
Tags: Consumers, lending, student loans, credit, underwriting
Source: Crunchbase

AlphaFlow
Real estate investing management platform for consumers
Latest round: $120,000 Seed
Total raised: Unknown
HQ: California
Tags: Consumers, investing, mortgage, lending, real estate, P2P, Y Combinator (investor)
Source: Techcrunch

Emburse
Debit card with company-driven expense rules
Latest round: $120,000
Total raised: $ million
HQ: San Francisco, California
Tags: SMB, expense management, expense reports, debit card, prepaid, accounting, bookkeeping, Y Combinator (investor), Community Federal Savings Bank (issuer)
Source: Techcrunch

Landed
Crowdfunding down payments for home purchase
Latest round: $120,000
Total raised: Unknown
HQ: San Francisco, California
Tags: Consumers, mortgage, P2P, peer-to-peer, credit, peer-to-peer, real estate, HR, benefits, Y Combinator (investor)
Source: Techcrunch

LendEDU
Student loan refinancing portal
Latest round: $120,000 Seed
Total raised: Unknown
HQ: Cedar Rapids, Iowa
Tags: Consumers, lending, student loans, credit, price comparison, discovery, lead gen, Y Combinator (investor)
Source: Techcrunch

Meter Feeder
Payment technology for parking meters
Latest round: $120,000 Seed
Total raised: Unknown
HQ: Braddock, Pennsylvania
Tags: Government, payments, merchants, acquiring, credit/debit cards, mobile, Y Combinator (investor)
Source: Crunchbase

Paystack
Nigerian online credit card processor
Latest round: $120,000 Seed
Total raised: Unknown
HQ: California
Tags: SMB, merchants, acquiring, credit/debit cards, acquiring, Y Combinator (investor)
Source: TechCrunch

LiquidX
Marketplace for trade finance assets
Latest round: Not disclosed
Total raised: Unknown
HQ: New York City
Tags: SMB, enterprise, commercial lending, financing, commercial credit
Source: FT Partners

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Finovate Alumni News

By David Penn Posted on
Categories: Betterment, Braintree, GMC Software Technology, Kasasa, LearnVest, Personal Capital, Qapital, Shoeboxed, Vera, Wealthfront

Around the web

  • Fortune.com recognizes Shoeboxed among its five startup companies to watch in Durham, North Carolina.
  • Business Builders interviews Harper Reed, head of commerce at Braintree.
  • Kurtosys features Personal Capital, Wealthfront, LearnVest, and Betterment in a look at the future of roboadvisers.
  • Kasasa (formerly BancVue) launches Retail Portfolio Optimization solution with enhanced, data-driven account analysis.
  • New York Times column on apps that help you save highlights Qapital.

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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