Currency Risk Management Startup Finofo Launches with Cross-Border Payments Solution

Currency Risk Management Startup Finofo Launches with Cross-Border Payments Solution
By David Penn Posted on
Categories: Daily news, Funding
  • Currency risk management company Finofo launched today.
  • The Calgary-based startup announced that the first phase of its launch is the release of its cross-border payments tools.
  • Finofo raised $1.25 million ($1.6 million CAD) in pre-seed funding in January.

Canadian currency risk management startup Finofo launched publicly today. The company, headquartered in Calgary, Alberta, calls its platform an “all-in-one” solution for businesses’ financial needs and has unveiled tools for cross-border payments as its first offering.

In an extended blog post Finofo co-founder Prateek Sodhi announced the company’s launch and its mission to help businesses manage currency risk. Sodhi underscored the challenge of managing currency risk, calling it a “multifaceted task that requires specialized talent in finance.” He noted that larger companies can often afford to hire the specialized talent required to effectively manage currency risk. However, Sodhi said, “most regular businesses are left grappling with these complexities with a team consisting mainly of trained accountants and corporate finance specialists.”

To this end, Finofo has built a digital platform that leverages advanced algorithms to examine the intricacies of currency fluctuations for individual businesses. If currency fluctuations become an issue, the platform quantifies the value of the risk. This enables the platform to develop tools and strategies, specific to individual businesses and their financial condition, to manage this risk.

The launch of Finofo, according to Sodhi, will take place in three stages. The first stage, announced today, includes the platform’s cross-border payments tools. These tools enable businesses to send or receive money in more than 40 currencies across 180 countries. Businesses will also be able to use Finofo to convert money into different currencies and automate accounts payable.

The second stage of the launch will involve development of the company’s smart hedge engine. This solution will help streamline currency hedging trade execution to reduce the price risk of currencies during the trading process. Future initiatives include financial planning and analysis solutions to help businesses conduct real-time foreign-exchange risk analytics.

“We’re not interested in merely selling financial instruments,” Sodhi wrote this week. “Instead, we leverage our unique technology to help businesses understand if, when, and how much they need them.”

In addition to its launch announcement, Finofo also disclosed that it raised $1.25 million ($1.6 million CAD) in pre-seed funding back in January. The round was led by Motivate Venture Capital. SaaS Venture Capital, Desjardins Financial Holding, and Sweet Spot Capital also participated.

Photo by Juman Salem

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CB Insights on 2023 Fintech Funding Woes; Strength in Early Stage Investment, ex-U.S. IPOs

CB Insights on 2023 Fintech Funding Woes; Strength in Early Stage Investment, ex-U.S. IPOs
By David Penn Posted on
Categories: Report series

CB Insights shared its State of Fintech Q2 2023 report last month. The top takeaways? Fintech funding continues to take a hit, with the report noting that both funding and deals globally have retreated to “levels not seen since 2017.”

But wait, there’s more. Mega-round funding, deals valued at $100 million or more, fell to a six-year low. And payments – which were memorably referred to by the VCs on our Smart Money Power Panel at FinovateFall last year as “the gift that keeps on giving” – stopped giving. CB Insights reports that funding for payments-related companies fell 75% quarter over quarter. It was the largest decrease for any fintech sector.

What about upsides? The report noted increases in fintech funding in Latin America and the Caribbean, the only region to see significant gains. CB Insights also highlighted the fact that the five exits in the quarter all came from fintechs based outside of the U.S.

Read the whole report. There are a number of interesting observations, some of which give some reason for optimism in the second half of the year. For one, early-stage companies dominated deal volume in Q2 2023. The strength of fintech funding in Latin America, mentioned above, was also a promising sign. Some of this deal-making involved cryptocurrency and DeFi related firms – and geographies like the Cayman Islands that are outside traditional Latin American fintech powerhouses Mexico and Brazil. But much of the investment in Latin America was driven by strong trends like digitization and financial inclusion. Investors have also been encouraged by the success of fintechs like Brazil’s Nubank. The report also saw positives in the market for companies going public in Asia last quarter.

For more on CB Insights’ examination of fintech funding so far in 2023, also check out the firm’s Fintech Midyear Review: The Data Behind the 6 Year Low webinar released last week. Lead Fintech Analyst Anisha Kothapa puts the current fintech landscape into context, and highlights where investors see opportunity around the world – and why.

“I think some of the biggest drivers of capital being invested in (Latin America) is due to, one, financial inclusion,” Kothapa explained. “There are many unbanked and underbanked people in Latin America that need innovative financial solutions. The second is that the region has seen rapid digital adoption, especially with the use of smart phones, and growing internet connectivity. The third thing is around a more favorable regulatory environment.”

By the way, Finovate’s weekly Finovate Global column is a great source of news on fintech developments around the world. With regard to Latin America in particular, recent columns have focused on fintech innovation in Brazil and Colombia.

Photo by RDNE Stock project

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PayPal Gets a New CEO

PayPal Gets a New CEO
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, PayPal
  • PayPal has appointed Alex Chriss as its new CEO.
  • Chriss, who will replace current CEO Dan Schulman, will begin his role on September 27.
  • Chriss comes to PayPal after a 19-year tenure at Intuit.

Fintech pioneer PayPal is back in the headlines today. After unveiling the launch of its stablecoin last week, the California-based company announced it has appointed Alex Chriss as new CEO.

Chriss will replace Dan Schulman on September 27 of this year. This comes after, earlier this year, Schulman declared his intention to retire. “I’m at a point in my life where I want to devote more time to my passions outside the workplace,” Schulman said in February. He will remain on the company’s Board until May 2024.

After Schulman’s statement, PayPal’s Board of Directors began a six-month long search for a new CEO who could not only drive growth, but also had extensive global payments, product, and technology experience. After an “extensive engagement and evaluation,” PayPal’s Board unanimously agreed on Chriss to lead the company.

“With his depth of experience in product development, his passion for serving customers and his longstanding commitment to empowering and enabling small businesses, and his proven track record of developing and inspiring his team, Alex is the perfect leader to take PayPal forward and accelerate the company’s growth opportunities,” said Chair of the PayPal Board of Directors John Donahoe. “The Board search committee worked diligently and thoroughly to find the right candidate to take PayPal into its next stage of growth and expansion, and we are confident Alex is that person.”

Chriss will join PayPal and its Board from Intuit, where he served as Executive Vice President and General Manager of the company’s Small Business and Self-Employed Group. He has been with Intuit for more than 19 years after starting out as a Group Manager of Business Development and Channel Sales of the Quickbase business unit.

During his tenure at Intuit, Chriss grew the Small Business segment’s customers at a 20% CAGR and its revenues at a 23% CAGR. In 2021, he led Intuit’s successful $12 billion acquisition of Mailchimp.

“PayPal is an extraordinary company that plays a critical role in the lives of consumers and merchants all over the world,” said Chriss. “Throughout my career, I have championed small and medium businesses and entrepreneurs, who are the backbone of every economy in the world. I am proud to take the baton from Dan and thrilled to have the opportunity to work with PayPal’s talented and committed team to build on PayPal’s remarkable history and draw on its unique capabilities to deliver outstanding products and services to businesses and consumers.”

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The SPAC is Back: Digital Lender Better.com Announces Latest Plan to Go Public

The SPAC is Back: Digital Lender Better.com Announces Latest Plan to Go Public
By David Penn Posted on
Categories: Daily news
  • New York-based digital mortgage lender Better.com is going public.
  • The company will combine with Auora Acquisition Corporation via SPAC “on or about August 22.”
  • The transaction between Better and Aurora has been more than two years in the making. The companies first announced the deal in May 2021.

Time to party like its 2021? The week begins with news that digital mortgage lender Better.com’s proposal to combine with Aurora Acquisition Corporation via SPAC has secured shareholder approval. The new Better.com will go public “on or about August 22, 2023.”

When finalized, the transaction will provide the combined entity with a minimum of $550 million and as much as $750 million in new capital. The company will trade on the NASDAQ under the tickers “BETR” and “BETRW.”

Founded in 2014 by CEO Vishal Garg, Better has been trying to close its SPAC deal for years. The transaction had been extended three times since 2021, amid concerns over market conditions, financial losses, and regulatory controversies. Among the bad press Better.com dealt with during this stretch was the infamous Zoom meeting in December 2021 during which Garg announced a layoff of approximately 900 employees. The CEO and founder also allegedly admitted that the company has “probably pissed away $200 million.”

With regard to finances, Better.com reported a net loss of $888.8 million in 2022. In the first quarter of this year, the company acknowledged losses of $89.9 million. Better.com also reported a decline in the number of loans funded year-over-year. The firm funded 18,559 loans in Q1 of 2022. Better.com funded 2,347 loans in the first quarter of this year.

In one response to these challenges, the company has made significant changes to its real estate strategy. Better.com announced in June that it would begin partnering with outside agents as referral partners in its Better Real Estate subsidiary. This pivot away from in-house licensed real estate teams to this new model is designed to help the subsidiary lower costs. The company also indicated that the change will help it deal with the challenge of lower mortgage volumes. Better Real Estate, which receives a significant number of its leads from its parent company’s mortgage operation, provided Better.com with $23.1 million in revenue in 2022.

Better has also introduced new solutions along its main line of business. The company began the year with the launch of One Day Mortgage. The new offering f gives borrowers a mortgage commitment letter within 24 hours of applying for a loan.

Photo by Suzy Hazelwood

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FinovateFall 2023 Sneak Peek: SAVVI AI

FinovateFall 2023 Sneak Peek: SAVVI AI
By Madeline Clines Posted on
Categories: FinovateFall 2023, FinovateFall 2023 Sneak Peek, SAVVI AI

A look at the companies demoing at FinovateFall in New York on September 11 and 12. Register today and save your spot.

SAVVI AI is the fastest way for product and data teams to build and deploy AI apps in minutes with their patented Agile AI platform – no data scientists, pre-existing data, or custom infrastructure required.

Features

  • Easy-to-use: No need for data science, or AI expertise
  • Fast to Value: Complete end-to-end solution – launch in days
  • Cold Start AI: Start AI use cases without any historical pre-existing data

Why it’s great

SAVVI’s Agile AI platform is the fastest and easiest way to add the power of machine learning automation to a company’s decision trees, products and workflows – teams can start with just a spreadsheet.

Presenters

Maya Mikhailov, CEO & Co-Founder
Mikhailov’s previous company was acquired by Synchrony, where she led a division building AI products and services. She’s a speaker on AI and former NYU professor.
LinkedIn

Alex Muller, CPO & Co-Founder
Muller is the former CEO at GPShopper (acquired by Synchrony) and was CPO at Synchrony in AI and EIR. He holds dual masters from CMU in Engineering and a MBA and 5 patents.
LinkedIn

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FinovateFall 2023 Sneak Peek: Merlin Investor

FinovateFall 2023 Sneak Peek: Merlin Investor
By Madeline Clines Posted on
Categories: FinovateFall 2023, FinovateFall 2023 Sneak Peek, Merlin Investor

A look at the companies demoing at FinovateFall in New York on September 11 and 12. Register today and save your spot.

Merlin Investor offers a multi-asset educational, strategizing and tracking tool complementary to any trading platform and designed for any kind of retail investor.

Features

  • Access a variety of market data from different sources all in one place
  • Create, analyze, compare and backtest an infinite set of investment strategies
  • Track portfolio performance

Why it’s great

The Merlin Investor platform is a white-label solution helping financial institutions supercharge their trading platforms by going beyond the sole execution of trades and offering a full investment experience all in one place.

Presenter

Guido Petrelli, CEO
Before starting Merlin Investor, Petrelli was the CFO and COO of a multinational company operating in the automotive sector for more than a decade.
LinkedIn

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FinovateFall 2023 Sneak Peek: Plinqit

FinovateFall 2023 Sneak Peek: Plinqit
By Madeline Clines Posted on
Categories: FinovateFall 2023, FinovateFall 2023 Sneak Peek, Plinqit

A look at the companies demoing at FinovateFall in New York on September 11 and 12. Register today and save your spot.

Plinqit’s High Yield Savings is a white-label digital savings product that generates high-growth deposits with minimal investment, giving banks a turnkey way to launch a separate, digital-only brand.

Features

  • Generates deposits
  • Offers a cost-effective way to launch a digital-only brand
  • Includes everything needed: Account opening, KYC, money movement, digital banking, and more

Why it’s great

High Yield Savings by Plinqit offers banks high-growth deposits on a highly scalable platform with low operating costs.

Presenters

Kathleen Craig, Founder & CEO
A fintech expert with a banking background, Craig is Founder and CEO of Plinqit, a venture-backed company helping banks grow deposits and expand into new markets.
LinkedIn

Kirsten Longnecker, SVP of Marketing
An award-winning fintech marketing executive with 20 years of experience in digital marketing, communications and branding, Longnecker is Plinqit’s Senior Vice President of Marketing.
LinkedIn

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FinovateFall 2023 Sneak Peek: AutoCloud

FinovateFall 2023 Sneak Peek: AutoCloud
By Madeline Clines Posted on
Categories: AutoCloud, FinovateFall 2023, FinovateFall 2023 Sneak Peek

A look at the companies demoing at FinovateFall in New York on September 11 and 12. Register today and save your spot.

AutoCloud radically accelerates and de-risks digital transformation. It builds secure cloud workloads orders of magnitude faster, cheaper, and easier than is possible today, utilizing low-code and AI automation.

Features

  • 99% fewer security breaches
  • 80% faster time to market
  • 26% less cloud spending

Why it’s great

Create any cloud system on any cloud provider in minutes using AI and low-code automation, all with the company’s current team.

Presenters

Tyson Kunovsky, CEO
Kunovsky brings with him 20 years of experience in cloud infrastructure, cybersecurity, and financial services.
LinkedIn

Evelyn LaTour, CPO
LaTour oversees product strategy, user research, and design. She has two decades of experience in finance and technology.
LinkedIn

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FinovateFall 2023 Sneak Peek: Telesign

FinovateFall 2023 Sneak Peek: Telesign
By Madeline Clines Posted on
Categories: FinovateFall 2023, FinovateFall 2023 Sneak Peek, Telesign

A look at the companies demoing at FinovateFall in New York on September 11 and 12. Register today and save your spot.

Telesign provides continuous trust to leading global enterprises by connecting, protecting, and defending their digital identities.

Features

Telesign’s brand new intelligence demonstration tool clearly depicts the risk inherent to onboarding and how to mitigate that risk through careful phone number analysis and insight.

Presenter

Michael Lappin, Sr. Director, Solutions Engineering
Lappin has been a part of the security/cybersecurity, incident response/forensic investigation, and security software space for more than 20 years.
LinkedIn

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Sila Ships New Tool to Offer Access to ACH Debits in Real Time

Sila Ships New Tool to Offer Access to ACH Debits in Real Time
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news
  • Sila launched Instant Settlement this week.
  • The new tool offers customers real-time access to ACH debits made on the Sila platform.
  • Instant Settlement works with all ACH transactions on the Sila platform and doesn’t require banks to adopt a particular payment rail.

Banking and payment infrastructure-as-a-service company Sila is launching a new product called Instant Settlement this week. The solution offers customers real-time access to ACH debits made with the Sila platform.

As its name suggests, Sila’s new tool offers companies access to funds instantly, without needing to wait the traditional two-to-five day time period of the ACH settlement to clear. Without the need to wait for funds to clear, companies no longer need to pre-fund transactions or rely on their own capital.

With Instant Settlement, Sila pre-funds the consumer’s digital wallet within a matter of seconds. The company’s approach works with all ACH transactions on the Sila platform because it doesn’t rely on any particular payment rail.

“With Instant Settlement, we are revolutionizing the way businesses and individuals access and manage their funds,” said Sila Co-Founder & Chief Strategy Officer Shamir Karkal. “We understand the importance of transaction speed in today’s fast-paced business landscape, and by offering Instant Settlement, we are providing our customers with a competitive advantage that sets them apart in their respective industries.”

Sila notes that Instant Settlement works best in situations such as payroll processing, back-office money movements, B2B transactions, and physical cash transactions where ACH is preferred, but return risks are low. That’s because it requires customers to maintain sufficient funds in a reserve wallet to cover potential return risks.

The timing of today’s release is notable as it comes shortly after the launch of the U.S. Federal Reserve’s launch of FedNow real-time payments system. Sila differentiates itself from FedNow and other real-time payments companies such as RTP because it doesn’t require banks to adopt a specific rail. “While everyone is rushing to RTP (65% coverage) and FedNow both of those instant payment systems are limited by the number of banks that adopt a particular instant payment rail while Sila’s Instant Settlement doesn’t rely on banks to adopt anything and instead, it is applicable to 100% of ACH transactions on its platform,” the company explained.

Sila was founded in 2018 by Karkal, who was one of the entrepreneurs who co-founded challenger bank Simple in 2009. The Oregon-based company has gone on to raise $20.7 million.

Photo by Ivan Samkov

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Finovate Global India: Conversational AI Comes to UPI, Debt-Collection-as-a-Service Scores $50 Million

Finovate Global India: Conversational AI Comes to UPI, Debt-Collection-as-a-Service Scores $50 Million
By David Penn Posted on
Categories: Finovate Global, Thought Machine, VISA

The Reserve Bank of India (RBI) announced a number of new fintech initiatives this week. Among the more interesting was a plan to bring AI-powered, conversational payments to the country’s UPI (Unified Payments Interface) system.

The National Payments Corporation of India (NPCI) launched the platform in 2016. Today, UPI has more than 300 million monthly active users in India. There are also 500 million merchants who use the platform to accept payments. With UPI, users can link multiple bank accounts to a single mobile app, and then make real-time, P2P transactions via mobile device or smartphone. Analysts expect daily transaction volume on UPI to reach one billion by 2026-2027.

The proposal would enable users to initiate payments from within both chat and messaging apps. “As Artificial Intelligence (AI) is becoming increasingly integrated into the digital economy, conversational instructions hold immense potential in enhancing ease of use, and consequently reach, of the UPI system,” the RBI press release read. “It is, therefore, proposed to launch an innovative payment mode viz., ‘Conversational Payments’ on UPI, that will enable users to engage in a conversation with an AI-powered system to initiate and complete transactions in a safe and secure environment.”

Conversational Payments will be available initially in Hindi and English, with other Indian languages to be added. The technology will be available via smartphones and feature phone-based UPI channels, which the Reserve Bank of India believes will lead to broader adoption and further financial inclusion. To this end, the RBI has also proposed to bring Near Field Communications (NFC) technology to its UPI-Lite on-device wallet. Launched last fall, UPI-Lite is designed to facilitate small value transactions and now processes more than ten million transactions a month.

An investment of $50 million has given Indian debt collection software-as-a-service (SaaS) platform Credgenics a valuation of $340 million. Accel, Westbridge Capital, Tanglin Ventures, Beams Fintech Fund, and other strategic investors participated in the Series B round.

Company co-founder and CEO Rishabh Goel said that the capital would do more than just help the firm expand into new markets. “This funding not only accelerates our growth, but also enables us to make a meaningful impact on the economic landscape of countries, unlocking new opportunities for financial well-being,” Goel said.

Founded in 2019, Credgenics currently serves more than 100 private banks, non-bank financial companies, fintechs, and asset reconstruction companies. The company’s debt resolution platform provides a suite of solutions including digital collections, collections analytics, litigation management, agent performance management, and a field collections mobile app. The technology leverages AI-driven intelligent automation and machine learning to bring greater efficiency to the collections process.

Credgenics handles 11 million retail loan accounts and touched an overall loan book worth $60 billion in fiscal year 2023. The company became operationally profitable this spring. This summer, Credegnics announced a partnership with Indonesia-based lender Investree. The company also was recognized as the Best Selling Loan Collections Platform in IBS Intelligence India Sales League Table for the second year in a row.

There are more than 3,000 recognized fintech startups in India. And the Indian government is giving itself a gentle pat on the back for helping make that happen.

Minister of State for Corporate Affairs (independent charge) Rao Inderjit Singh provided the report to Parliament as part of the Startup India initiative. Launched by the Department for Promotion of Industry and Internal Trade in 2016, this initiative establishes the criteria that confers recognition by the Department. These factors include data of incorporation, as well as revenue and profit benchmarks.

Singh pointed to the “Fintech Entity Framework” as an example of one of the actions taken by the government – in this case the International Financial Services Centres Authority (IFSCA) – to promote the country’s fintech startup ecosystem. This framework includes a comprehensive scheme of grants for startups, sandboxes, proof-of-concepts (PoC), accelerators, and more.

Singh also credited the government for the success of an initiative which streamlined beneficiary account opening and direct benefit transfers, and improved access to multiple financial services applications. The initiative is called the Pradhan Mantri Jan Dhan Yojana (PMJDY), meaning “The Prime Minister’s Public Finance Scheme,” and it set a new world record for account openings upon its launch in 2014. This spring, the initiative reached a major milestone of more than $28 billion (₹2 lakh crore) in deposits.

Here is our look at fintech innovation around the world.

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Sub-Saharan Africa

Photo by Sagar Soneji

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Alkami Has a New AI Model that Helps Banks Retain Customers

Alkami Has a New AI Model that Helps Banks Retain Customers
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alkami Technology, Alumni News, Daily news
  • Alkami launched a new Engagement Artificial Intelligence (AI) Predictive Model.
  • The new model helps financial institutions identify accountholders whose behaviors are indicative of retention and account growth.
  • The Engagement AI Model leverages Alkami’s Key Lifestyle Indicators (KLIs) as well as its AI Predictive Modeling technology.

Everyone knows that it is easier (and less expensive) to maintain an existing customer than it is to acquire a new one. So Alkami, which launched a new AI model to help banks retain customers, is likely to garner a lot of attention.

The cloud-based digital banking solutions provider unveiled its Engagement Artificial Intelligence (AI) Predictive Model this week to tackle customer attrition. The solution not only identifies accountholders whose behaviors are indicative of retention and account growth, but it also flags customers who may be at risk of leaving.

The new predictive model leverages Alkami’s Key Lifestyle Indicators (KLIs) as well as its AI Predictive Modeling solution that uses data to identify accountholders’ shifts in spend categories and recognize their financial patterns.

“When we looked at the full spectrum of attrition scoring,” explained Alkami Director of Product Management Mark Leher, “our research showed that attrition is significantly lower among highly engaged account holders, so we developed a model that not only identifies these highly engaged account holders but also layers in Alkami’s KLIs—labels describing the type of transaction or behavior a customer or member engages in—to best predict which behaviors drive incremental engagement.”

The company recently conducted research that found that accountholders who score the highest risk for attrition are, on average, 15 times more likely to leave a financial institution than those who score as highly engaged.

When financial institutions use Alkami’s Engagement AI Model to identify the users that exhibit growth behavior, they can understand where to prioritize spend and what areas they should focus on to grow the customers’ engagement.

“Not only does this save on account acquisition costs, but it also empowers the financial institution to engage with those who are more likely to take action on a targeted campaign,” added Leher.

Alkami was founded in 2009 and went public in 2021. A year later, the company acquired competitor Segmint— and its KLI technology– for $135.5 million. Alkami is currently listed on the New York Stock Exchange under the ticker ALKT with a market capitalization of $1.43 billion.

Photo by Trinity Kubassek

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