Finovate Alums Earn Spots Among UBS Future of Finance Finalists

Finovate Alums Earn Spots Among UBS Future of Finance Finalists

UBS_logo_FutureofFinanceSayPay Technologies, Stratos, and Wealthforge will compete for top honors at the UBS Future of Finance Challenge on 10/December in Zurich. The three will join nine other finalists vying for $50,000, 300+ hours of mentoring, and the opportunity to develop their technology in a UBS innovation center.

UBS_FutureofFinance_videoscreen

(Click image to watch video)

The Future of Finance Challenge had more than 600 applicants. Regional Finals were held this month in Zurich, London, Singapore, and New York. To be eligible, entrants must not have received a Series A or total funding of more than $10 million. Solutions presented could be an idea, concept, or a functional demo and needed to either “focus directly on, or have a potential connection or application with, banking and financial services.”

SayPay-logo-noshadowsAll three Finovate alums reaching the finals made their Finovate debuts at FinovateSpring 2015 in San Jose. SayPay Technologies, a finalist from the Singapore round, will go into the finals with its Customer Authentication Experience. SayPay CEO Steve Hoffman said, “The distinguished panel of UBS judges was quick to recognize how SayPay transforms fragmented current authentication solutions into a seamless, enjoyable customer interaction with their financial institutions.” SayPay was founded in February 2014 and is headquartered in Pleasanton, California. The company launched its BillPay and Secure Web Sign-In at FinovateSpring 2015 in May.

Stratos_logo_snaggitfromboxStratos presented its wallet-simplifying, Bluetooth Connected Card with enhanced security, and emerged from the same New York round as fellow Finovate alum, Wealthforge. Stratos demonstrated its technology at FinovateSpring 2015 in May. It was founded in 2012 and is headquartered in Ann Arbor, Michigan; Thiago Olsen is CEO.

WealthForge logo copyWealthforge impressed UBS judges with its automated, integrated risk management solution for issuers and intermediaries. Mat Dellorso, CEO and co-founder, wrote at his company’s blog: “With the WealthForge Invest Button, anyone raising private capital can take advantage of an intuitive, modern approach to managing the process of raising more capital in less time.” Wealthforge was founded in 2011 and is based in Richmond, Virginia. Wealthforge gave Finovate audiences a look at the Invest Button during its demo at FinovateSpring 2015.

Also competing in the New York round were Finovate alums, MaxMyInterest and Coinalytics. FinovateEurope 2015 veteran CashSentinel represented Finovate alums in the Zurich round.

Joining SayPay Technologies, Stratos, and Wealthforge in Zurich will be:


European fintech fans! Join us in February as Finovate returns to London for FinovateEurope 2016. For more information, and to save your spot, visit our FinovateEurope page.

Finovate Alumni News

On Finovate.com

  • “Finovate Alums Earn Spots Among Finalists in UBS Future of Finance”

Around the web

  • Arxan announces Cyber Security scholarship program.
  • PYMNTS.com interviews Adam White, Coinbase VP and product manager, on the “killer app” phase of bitcoin.
  • CNBC looks at Fastacash and the launch of its remittance app, XOPO.
  • CenturyLink adds former U.S. Senator Mary Landrieu to their board.
  • Banking CIO Outlook magazine features Praesidio.
  • Credit Karma gives away one-billionth free credit score since its 2008 launch.
  • Kony appoints Stephen J. Rohleder, former Accenture COO, to its advisory board.
  • Xero pilots program to allow users to file their GST returns.
  • Bloomberg: Banks Catching Up with Amazon Turn to Iceland Startup Meniga for Ideas.

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

Mobile Monday: Communicating Critical App Updates via Email

Mobile Monday: Communicating Critical App Updates via Email

 

usbank_mobile_upgrade_email_border

       Email from US Bank to mobile banking customers (12 Nov 2015)

Last week I wrote about how much I liked US Bank’s new native app. So I understand why the bank is anxious to get users ported over to the new version. Customers are going to like it. Guaranteed.

Yet I was a little surprised, just a week into the new version, to receive an email warning that the previous app was about to stop working (see message above). This urgency makes customers question whether something is seriously wrong with the previous version. The message is also annoying in that it doesn’t really give the customer any clue as to whether their version is the current one, or not. It provides only the version number (2.1.76) which is the cut-off between good and bad apps.

This message offers so many opportunities to improve that I was compelled to compile a top-10 list of gripes (plus 2 bonus nitpicks). They are listed, more or less, in priority order:

  1. I had already updated to the new version, so this message was completely unnecessary. And if the bank doesn’t know which version I’m using, it should say so.
  2. There is no explanation of why it was suddenly so urgent to upgrade. Skeptical users were left to their imaginations, not something you want in these days of widely publicized security breaches.
  3. usbank_appversionnumberInstead of talking about version numbers, why not just describe the new app? It looks completely different! A quick description and screenshot would have been understood by 90% of the readers, and would have allowed users to move on with their day, rather than having to engage in a tedious “find the version-number hunt.”
  4. If you must use a version number, then at least explain how to find it. The email failed to address that key point in the body, fine print, or within any links provided within the message. It’s not that simple to find the version number. You must log in, find the hidden primary navigation, choose “About the App” and notice the version number in the lower right corner (see inset). 
  5. If you are going to make such a big change, use a whole number for the new version of your app. In this case, it would be easier to say, “Use v3.0 or later.” 
  6. The links provided to update the app did not go to the iTunes app-update page, but instead went to a marketing page at USBank.com. And the marketing pages, while well done, also did NOT link to the app store’s update pages. In fact, to confuse things still further, the marketing page said the new version “was coming soon.”
  7. The only way to get help was to make a phone call to the general 800 number; no direct line to tech support was given. And not even an FAQ page, email address, chat, or any other type of digital link was provided for help in responding to this matter.
  8. The email message was not optimized for mobile. It was hard to read on my iPhone 6.
  9. It does not specifically address what happens if you don’t update within the next few days; “discontinuing support” has a number of meanings from simply not getting tech support to completely not working.
  10. The bank’s message concluded with thanks for being a mobile banking customer, but they could have also thanked me for taking time out of my day to deal with this “Maintain access … update now” emergency subject line in my inbox.
  11. <Nitpick #1> The first sentence of the second paragraph uses “new” three times.
  12. <Nitpick #2> The closing sentence repeats the “enhanced convenience” copy point. This is a generic benefit at best and shouldn’t be invoked twice in a 150-word message. The resulting inconvenience to update makes their value judgment of questionable importance.

Bottom line: Customer communications are not easy, especially with newer technology. So make sure to test them with some less-savvy users before hitting publish.

Finovate Debuts: Persistent Systems Introduces Social Payment Solution BuddyPay

Finovate Debuts: Persistent Systems Introduces Social Payment Solution BuddyPay

PersistentSystems_homepage_Nov2015

Persistent Systems made its Finovate debut in May with a new solution called BuddyPay. The technology makes it easy for one person to pay for goods or services purchased online by someone else. Think about a parent helping a son or daughter pay for expenses while away at school. Or a caregiver paying for a service bought by a senior in their charge. Rather than sending money back and forth, BuddyPay converts the consumer into a “Payer” and a “Buyer” in real time and lets the Payer handle the payment while the Buyer receives the product or service.

Company facts:

  • Founded in May 1990
  • Headquartered in Pune, MH, India
  • Earned more than 20% revenue CAGR for the past five years
  • Named one of the top ten companies for Indian investor relations by Thomson Reuters Extel Survey Awards

Persistent_stage_FS2015

Shriram Natarajan, VP technology consulting for persistent systems, demoed BuddyPay at FinovateSpring 2015 in San Jose, California.

How it works

BuddyPay is an app that sits on the merchant platform and shows up as a “BuddyPay” button. A shopper, or “Buyer,” finds a product and then notifies or “pokes” the person on his “Buddy List,” such as a parent, to pay for it.

The person notified, the “Payer,” can then look at the item. If the Payer agrees, they send a notification back to the Buyer who returns to the online shopping cart to complete the transaction.

PersistentSystems_stage_FS2015_2

The Payment Request notification from the Buyer enables the Payer to see exactly what is in the Buyer’s shopping cart. The Payer can then choose their preferred payment method and pay for the item. Once the order is processed, both parties are notified of the completed transaction, and the Buyer can then make shipping arrangements.

The future

Another use-case includes employees paying for work expenses or even someone picking up the tab for a group of friends dining at a restaurant. The technology is ready to be integrated: Persistent Systems has developed SDKs for mobile app and e-commerce engine deployment and is eager to work with both merchants and banks.

Persistent Systems has made headlines recently, announcing the design and implementation of online communities for cloud-managed, enterprise wi-fi solution provider, AirTight Networks. The company was also involved in the Digital Pune Hackathon. Launched last month and organized by the Sakal Media Group and 14C in partnership with Persistent Systems, the Hackathon gave 180 students the opportunity to use technology to solve problems within the areas of transportation, public health, and water management. Top projects will be implemented by local organizations such as the Pune Municipal Corporation (PMC) and the Pune Metropolitan Regional Development Authority (PMRDA).


Check out the demo video from Persistent Systems from FinovateSpring 2015

VATBox Wins Spot in Inaugural Global MasterCard Start Path Class

VATBox Wins Spot in Inaugural Global MasterCard Start Path Class

VATBox_homepage_Nov2015

VATBox will join three other startups in the inaugural global class of the MasterCard Start Path program.

The six-month class includes “immersion weeks” hosted in Berlin and Singapore, as well as ongoing support from the MasterCard network. The companies will also be invited to attend the Start Path Global Partner Summit to meet and network with representatives from more than 20 banking, retail, and technology companies such as Samsung Card, TSYS, and Bank of Montreal.

The four startups will have access to the nearly 40 companies that have been previously mentored by, or partnered with, Start Path, including Finovate alums, Big Data Scoring, CardFlight, nymi, and Rippleshot.

VATBox_stage_FEU2015b

VATBox CEO and co-founder Isaac Saft demonstrated the VATBox Automated VAT Recovery and Visibility solution at FinovateEurope 2015.

Stephane Wyper, global lead for MasterCard Start Path, said that the program was designed to be “more globally inclusive” and “provide startups access to new markets without uprooting them.” To qualify for the program, startups must have a live product in the market and have received initial funding. Joining VATBox will be payment analytics startup, Control; Japanese PFM innovator Moneytree; and artificial intelligence specialist, Rainbird.

Launched in 2014, MasterCard Start Path supports early stage startups working on the next generation of e-commerce solutions, including building big data, mobile, and cloud-based applications. The program seeks diversity among participating startups, encouraging companies with different levels of funding, team sizes, revenues earned and place of origin to apply. There were more than 200 applicants to this incoming inaugural global class.

MasterCard_Start_Path_homepage

In addition to making its Finovate debut at FinovateEurope 2015 in London in February, VATBox raised $24 million in growth equity investment in August. The company provides an automated VAT (value-added tax) recovery solution that helps maximize VAT returns in a transparent and compliant way.

Founded in 2012 and headquartered in Herzilliya, Israel, VATBox demonstrated its Automated VAT Recovery and Visibility platform at FinovateEurope 2015 in London. Isaac Saft is CEO and co-founder.

Finovate Alumni News

On Finovate.com

  • “VATBox Wins Spot in Inaugural Global MasterCard Start Path Class”
  • “Finovate Debuts: Persistent Systems Introduces Social Payments Solution, BuddyPay

Around the web

  • Billhighway ranked number 398 fastest growing company in North America on Deloittes 2015 Technology Fast 500.
  • Inspirus Credit Union replaces its existing digital banking system with Alkami Technology’s ORB platform.
  • Corezoidpowered mobile Privat24 for Android lets users scan and digitize discount cards.
  • Let’s Talk Payments features Coinbase, Chain, Ripple, and ItBit in its roundup of top fundraising blockchain and bitcoin companies for 2015.
  • PYMNTS.com interviews Ripple CEO Chris Larsen on payment trends for 2016.
  • BBVA’s new release of BBVA Wallet enables users to redeem credit card rewards on the spot.
  • TokBox’s new developer toolkit brings voice and video chat to Apple TV apps.
  • Facebook’s CTO Mike Schroepfer joins Wealthfront’s board of directors.

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

Thinking Capital & Flybits Make Deloitte’s Technology Fast 50 Canada Awards

Thinking Capital & Flybits Make Deloitte’s Technology Fast 50 Canada Awards

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Deloitte last night announced the winners of its Technology Fast 50 rankings, and two Finovate and FinDEVr alums made the cut.

The Technology Fast 50 awards, which are split across three categories, recognize achievements and evolution in the Canadian tech sector.

THinkingCapitalHomepageFirst up is Thinking Capital which achieved a Fast 50 award*. This award lists the 50 fastest growing Canadian technology companies based on the highest percentage of revenue growth over the past five years.

Thinking Capital’s alternative lending platform has helped more than 10,000 SME’s gain access to capital. The company offers merchant advances and term loans up to $300,000.


 

Screen Shot 2015-11-13 at 11.03.18 AMFlybits was listed among 11 others in the Companies to Watch category, which is based on the same criteria for the Fast 50 award without requiring the company to be in business for 5 years.

Flybits helps financial institutions deliver a more personalized mobile experience by leveraging all aspects of a user’s context.

*Qualifying companies must have: headquarters in Canada, been in business for at least five years, revenues of at least $5 million, their own proprietary technology, research and development activities in Canada.

ID Analytics, Payfone Win at 2015 Fierce Innovation Awards

ID Analytics, Payfone Win at 2015 Fierce Innovation Awards

FierceInnovationAwards_banner_2015

ID Analytics won first place in its category at the 2015 Fierce Innovation Awards: Telecom Edition. The company impressed judges with its ID Connect solution, launched in September, which makes it easier to onboard and enroll customers digitally.

IDAnalytics_logoID Connect validates identity with a minimal amount of information, helping businesses increase conversions and lower abandonments. The solution auto-fills application fields and risk assesses the user in seconds. The SaaS technology can be combined with ID Connect Photo, which uses a government-issued ID card to populate fields.

Also taking top honors at the event was Payfone. Payfone won the Over-the-Top (OTT) Monetization category with its Payfone Signature technology, and also won the Customer Security category with its Identity Certainty Platform.

Payfone_logo_Nov2015Payfone Signature is a deterministic, trusted mobile identity that, according to the company, “cannot be forged, cloned, spoofed, or hacked.” The technology uses data from the mobile network operator level to “permanently bind, verify, and subscribe” mobile identity at the account level. The result is what Payfone calls “a persistent mobile ID.” Identity Certainty leverages the Signature technology to provide organizations with the ability to provide seamless yet secure access to sensitive business information.

FierceInnovationAwards_Payfone_IDanalytics

The Fierce Innovation Awards span 24 different categories and feature an additional six companies singled out for “Best in Show” recognition. Judges for this year’s competition included representatives from the Verizon Innovation Program, TeliaSonera International Carrier, Comcast, and T-Mobile USA. Companies were judged based on:

  • technological innovation
  • financial impact
  • market validation
  • compatibility with existing network environments
  • end-user customer experience

Founded in 2002 and headquartered in San Diego, ID Analytics demonstrated its platform at FinovateFall 2015. Payfone demoed its 1 Touch Checkout solution at FinovateFall 2012. Payfone was founded in 2008 and is based in New York City.

Finovate Alumni News

On Finovate.com

  • “Thinking Capital and Flybits earn Deloitte’s Technology Fast 50 Canada Awards”
  • “ID Analytics, Payfone Win at 2015 Fierce Innovation Awards”

Around the web

  • American Banker features PayActiv in a look at budgeting apps.
  • Let’s Talk Payments presents a roundup of wealth managers turned robo-advisers, including Nutmeg.
  • Yodlee features how DoubleNet Pay enables automatic bill pay and financial health for employees.

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

Fintech Fundings: 16 Companies Raise $900 Million Week Ending 13 Nov 2015

Fintech Fundings: 16 Companies Raise $900 Million Week Ending 13 Nov 2015

ncr_cash_registers

It was a quieter week in fintech fundings. Other than Blackstone’s $820 million bet on NCRfounded in 1884 as National Cash Register, NCR is likely the oldest financial technology company on the planet — just $85 million flowed to the under-100-year-old crowd. And we are not sure if the NCR inflow should even be considered “new money.” According to today’s WSJ story, the money appears to be earmarked for share repurchases, meaning it’s just a transfer of $820 million to the existing common-stock holders, rather than new capital sitting on the balance sheet. But we’ll see if they do follow that path.

Excluding NCR, 15 companies raised $85.4 million this week. Year-to-date, the total is $16.9 billion or $22.8 billion counting the Worldpay and First Data IPOs.

Here are the deals by size from 7 Nov to 12 Nov 2015:

NCR
ATMs, POS and financial technology
Latest round: $820 million Post-IPO equity
Total raised: Unknown
HQ: Duluth, Georgia
Tags: Enterprise, ATM, POS, core banking, payments, Blackstone (investor)
Source: WSJ

CircleUp
Equity crowdfunding platform
Latest round: $30 million
Total raised: $47 million
HQ: San Francisco, California
Tags: Consumer, SMB, financing, equity, P2P, investing
Source: Crunchbase

MoneyFarm
Investment advisory for small savers
Latest round: $17.2 million
Total raised: $40 million
HQ: Milan, Italy
Tags: Consumer, investing, robo-adviser, mobile
Source: Crunchbase

Bango
Mobile payments for m-commerce companies
Latest round: $17 million Post-IPO equity
Total raised: Unknown
HQ: Cambridge, England, United Kingdom
Tags: SMB, payments, mobile, acquiring, merchants, credit/debit cards
Source: Crunchbase

Bread Finance
Unsecured consumer financing of purchases
Latest round: $14.3 million, Series A
Total raised: $14.3 million
HQ: New York City, New York
Tags: Consumer, lending, underwriting, payments, merchants, SMB
Source: Crunchbase, WSJ

Innovation Broking
Corporate insurance brokerage services
Latest round: $3 million
Total raised: $3 million
HQ: Watford, United Kingdom
Tags: Insurance, B2B, enterprise
Source: FT Partners

Moni
Mobile bank
Latest round: $1.45 million Seed
Total raised: $1.45 million
HQ: London, England, United Kingdom
Tags: Consumer, banking, personal finance, PFM, mobile
Source: Crunchbase

NextBank Project
Bitcoin exchange
Latest round: $950,000
Total raised: $ million
HQ: Vanuatu
Tags: Consumer, SMB, bitcoin, cryptocurrency, exchange, payments
Source: Crunchbase

Camino Financial
Lending marketplace targeting Hispanic-owned small businesses
Latest round: $750,000
Total raised: $750,000
HQ: Glendale, California
Tags: SMB, lending, lead gen, price comparison, commercial loans
Source: FT Partners

RenewBuy
Auto insurance portal
Latest round: $500,000 Angel
Total raised: $500,000
HQ: Gurgaon, India
Tags: Consumer, automobiles, motorcycles, insurance, lead gen, price comparison, quotes
Source: Crunchbase

ZeePay
Mobile payments at the point-of-sale
Latest round: $200,000
Total raised: $200,000
HQ: Ghana
Tags: Payments, mPOS, underbanked, merchants, retailers, acquiring
Source: WhoGotFunded

Painless1099
Savings platform for freelancers
Latest round: $25,000, Seed
Total raised: $25,000
HQ: Buffalo, New York
Tags: SMB, savings accounts, tax, Lincoln Savings Bank (partner)
Source: Crunchbase

EDGARreader
Financial technology intelligence application
Latest round: $25,000 Award
Total raised: $25,000
HQ: New York City, New York
Tags: Consumer, investing, information
Source: Crunchbase

Captain401
401(k) management platform
Latest round: Undisclosed
Total raised: Unknown
HQ: San Francisco, California
Tags: Employees, SMB, retirement, benefits, investing, YCombinator
Source: WSJ

LevelFunded
Employee benefits provider
Latest round: Undisclosed
Total raised: Unknown
HQ: National, Maryland
Tags: SMB, health care, employees, benefit management, insurance
Source: Crunchbase

FinTecSystems
Real-time financial data access for financial institutions
Latest round: Undisclosed
Total raised: Unknown
HQ: Munich, Germany
Tags: Enterprise, fraud, security, online banking, payments, API, developers, big data
Source: FT Partners

—–

Image: West Islip Business Machines

 

BBVA’s Wallet App Tops One Million Downloads; Goes Live in Turkey This Week

BBVA’s Wallet App Tops One Million Downloads; Goes Live in Turkey This Week

BBVA_homepage_Nov2015

BBVA just announced that its Wallet app surpassed one million downloads since its launch in 2013. The news comes as the Spanish bank reports that Wallet will launch with Turkey’s Garanti Bank this week under the brand name BonusFlas. BBVA’s Wallet app is currently available in four other countries: Mexico, Chile, the United States, and Spain.

Saying that plastic card users will be in the minority by 2020, global head of payments for BBVA, Mehmet Sezgin, put BBVA at the center of the movement toward mobile payments. “As the only bank operating digital wallets in five countries around the world, we are at the forefront of the major transformation from plastic to mobile,” he said.

BBVA_stage_FEU2013

Marisol Menendez Alvarez and Jose Antonio Gallego of the Open Innovation Team at BBVA demonstrated Stockbuzz at FinovateEurope 2013.

BBVA’s Wallet enables customers to:

  • Make contactless payments with smartphone using their BBVA cards
  • Turn cards on or off in case of loss or theft
  • Link cards to specific types of transactions (i.e., offline or online only)
  • Borrow money from within the app for purchases

BBVA’s app topped 250,000 downloads in September 2014, meaning that three-quarters of the app’s million downloads have come in the past year alone. One of the more innovative banks in Europe, BBVA acquired Simple for $117 million in February 2014, and over the summer introduced its Apple Watch app.

Founded in 1857 and headquartered in Madrid, Spain, BBVA operates in more than 30 countries, and has more than 47 million customers. The company demonstrated its Stockbuzz platform at FinovateEurope 2013 in London.


Are you a fintech fan living in Europe? Be sure to mark February 9 and 10 on your calendar and join us for FinovateEurope 2016 in London. More information available here.

Finovate Debuts: DarcMatter Shines a Light on Alternative Investing

Finovate Debuts: DarcMatter Shines a Light on Alternative Investing

DarcMatter_homepage_Oct2015

For Sang Lee, co-founder and CEO of DarcMatter, capital markets are one of only a few areas to have avoided disruption. Every industry has been disintermediated except for capital markets,” he explained. “No one has ‘flung open the gates’.”

Gate opening for DarcMatter means building an online, institutional-grade investment platform that gives investors transparent access to investments in venture capital, private equity, and hedge fund products.

And more than just access, DarcMatter uses a self-learning algorithm to help investors find investments that are tailored to their needs. “Recommendations shouldn’t come from intermediaries, but from your behavior,” Lee said. He said that DarcMatter is less a traditional robo-adviser and more a platform that “streamlines the process to display the opportunities that would be best.”

Company facts:

  • Headquartered in New York
  • Founded November 2014
  • Provides $1.5 billion in alternative investment opportunities
  • Supports investment minimums of $25,000
  • Clients include:
    • Antecedent Ventures
    • Eagle’s View Capital Management
    • Exbury Capital Management
    • White Star Capital
  • Sang Lee is CEO and founder

DarcMatter_stage_FS2015

From left: DarcMatter founder and CEO Sang Lee and CTO Stan Solodkyy demonstrated the DarcMatter platform at FinovateSpring 2015.

How it works

DarcMatter is currently available only to accredited investors. The kinds of investments available through the DarcMatter platform include:

  • commercial debt offerings
  • hedge funds
  • private company equity offerings
  • private equity funds
  • startup offerings
  • venture capital funds

DarcMatter_screenshot_1

How does an investor interact with the platform? Qualified investors register and log in to the platform where they see detailed information about the various investments that are available. Investors can search through the listings by industry, offering type and subtype (for example, “managed funds” and “private equity”) and region.

When investors find what interests them, they can dig deeper and conduct the necessary due diligence. DarcMatter provides information on everything from the capital-raise goal, amount available for investment, management and performance fees, information about the management team (including founders) and more. The platform also includes a secure data room where the owner of the offering can control access to any and all documentation.

DarcMatter_stage_3

Once the investor decides to invest in a given opportunity, DarcMatter’s “Invest Now” button allows them to seamlessly and instantly reserve his or her investment without having to leave the platform.

For asset managers, after a short application process, the dashboard enables them to see all the investment offerings they have listed. The dashboard shows a variety of statistics, importantly including how many people have viewed the offering, as well as the amount of capital up for investment. Owners of the offering can adjust the amount of information to be displayed, varying the privacy setting, as well as track the behavior of interested investors. They can find out which have added the offering to be tracked, which have conducted due diligence, and so on.

DarcMatter_screen_2

For DarcMatter, this represents the kind of transparency between owners of offerings and investors—particularly in cutting out the middlemen—a transparency that Lee says has helped shape other industries in fintech for the better. Investors not only benefit from the transparency of the platform, but also the opportunity to improve their portfolio diversification through investments in alternative financial products, especially those with low correlations to systematic market risk.

At the same time, DarcMatter offers asset managers a broader range of potential investors, including family offices and individual accredited investors. Capital-raising costs are lower, investor logistics easier to manage, and the platform provides fully integrated tools to ensure regulatory compliance.

The future

DarcMatter is one of the first movers in the market to make alternative investments available to investors. Lee sees it as a matter of being “at the right time with the right idea at the right place.” He credits his experience in investment banking as alerting him to the possibilities of making a difference for those interested in participating in alternative investments.

“Coming from investment banking,” Lee said, “you figure there must be a better way, a streamlined way, without middlemen.” All that was necessary was a platform to deliver the information that investors need, and the technology to make everything happen in a transparent, efficient, cost-effective and compliant way.

Lee says while it’s critical to be on the right side of regulations, he yet understands that the “biggest disruptions (will) have you running along the edge of the regulatory line.” Regulators are often confused by new, innovative ideas and technologies, Lee said, and that can actually represent an opportunity for startups. “Incumbents are often hamstrung by regulation,” he added, saying that startups can gain an edge “by develop(ing) best practices early on.”

Lee is optimistic about the future of alternative investments and the prospects for DarcMatter. “Capital markets is the last frontier in financial innovation,” he said. “It’s the hardest and biggest to move and will take the longest.” But when innovation in capital markets gets going, he added, “it will develop efficiencies like we’ve never seen.”


Check out our video of DarcMatter’s live demonstration at FinovateSpring 2015 in San Jose.