Low Code Platform OutSystems Scores $150 Million in New Funding

Low Code Platform OutSystems Scores $150 Million in New Funding

In a round co-led by Abdiel Capital and Tiger Global, low code application development platform OutSystems has raised $150 million in new capital. The funding gives the company a valuation of $9.5 billion, and will help fuel investment in its R&D and go-to-market strategies.

In a statement, OutSystems CEO and founder Paulo Rosado highlighted the challenges businesses face when it comes to keeping pace with innovation in an increasingly digital and software-run world. “Developers are a scarce resource in business today, and the complexities of traditional software development exacerbate the challenges most organizations face when tackling their digital transformation agenda,” Rosado said.

“By fundamentally changing the way software is built, OutSystems makes it possible for every organization to compete, innovate and grow with the developers they already have,” Rosado explained. “We’re focused on helping customers succeed with their most challenging digital transformation initiatives, and today’s announcement is an acknowledgment of our progress on that journey.”

OutSystems gives businesses the ability to deploy and manage critical applications at speed – from enhancing the customer experience to streamlining and automating processes to modernizing legacy systems. OutSystems leverages a visually-based, model-driven development approach to enable institutions to build differentiation into their solution, maximize the development talent on hand, and accelerate the process of concept iteration to uncover new viable ideas.

OutSystems ended 2020 with a strategic collaboration agreement with AWS and began this year working with Yorkshire Building Society (YBS) and U.K.-based law firm Shepherd and Wedderburn. OutSystems helped YBS develop and build a new online mortgage calculator that has helped increase conversions by 54%, and worked with Shepherd and Wedderburn to create client-facing, “Smarter Working” applications.

“OutSystems matched our vision for reusable architecture, robust application lifecycle management, and a visual approach that would allow developers to focus more on delivering business value instead of coding,” Shepherd and Wedderburn Head of Technology Steve Dalgleish said. “It has given us the speed and agility to deliver effective process and technology solutions – both internally and for our clients – including complex, large scale, high-profile projects.”

An alum of our developers conference, OutSystems presented “Low-Code: The Next Evolution in App Dev Platforms (Oh, and 5xFaster)” at FinDEVrNewYork in 2017. In their presentation, the company showed how it helped take a European retail bank, BPI, through a major digital transformation including solutions for mobile banking, internet banking, branch, and contact center.

With headquarters in Boston, Massachusetts and Lisbon, Portugal, OutSystems has customers in 87 countries around the world and partnerships with 350 corporations including AWS, Deloitte, and fellow Finovate alum Infosys.

Photo by Suzy Hazelwood from Pexels

Blockchain.com Secures $120 Million in Funding

Blockchain.com Secures $120 Million in Funding

Cryptocurrency wallet provider Blockchain.com has picked up $120 million in funding. The Series A round featured participation from a sizable number of investors, including Access Industries, Lightspeed Venture Partners, and GV (Google Ventures) – among others. Blockchain.com’s total capital now stands at $190 million, and gives the London, U.K.-based firm a valuation of $3 billion.

In a blog post discussing the strategic financing, Blockchain.com CEO and co-founder Peter Smith highlighted the “immense optimism” toward cryptocurrencies displayed by a growing number of “serious, institutional investors.” He noted that the presence of major macro investors such as Louis Bacon’s Moore Strategic Ventures and Kyle Bass in Blockchain.com’s recent funding, and said it was “further proof that institutions are taking a serious look at their crypto strategy.”

And at Blockchain.com’s crypto strategy, as well. Smith noted that when the company began its Series A in 2014 – the same year it debuted at our developers conference, FinDEVr Silicon Valley – the company was powering “just over” two million bitcoin wallets. Today Blockchain.com powers more than 67 million wallets, representing more than $620 billion in transactions. Since 2012, Smith wrote “28% of all Bitcoin transactions … have occurred via Blockchain.com.”

Founded in 2011, Blockchain.com began by offering a blockchain information service, Explorer, and soon after introduced an open source bitcoin wallet to make it easier for investors to buy and sell cryptocurrencies. The company also unveiled Blockchain APIs that helped give a generation of bitcoin businesses the ability to provide services ranging from bitcoin wallet building to transaction verification.

Blockchain currently supports a cryptocurrency exchange, as well as an “exponentially growing” institutional business of digital asset trading, lending, and custody. Smith added that while the wallet remains “at the core” of Blockchain.com’s business, “our Institutional business is now significant enough to cover the entire operating cost of the business globally” in addition to providing further operating profits.

Photo by Joey Kyber from Pexels

Small Banks Can Now Use Kasasa to Offer Bitcoin Wallet

Small Banks Can Now Use Kasasa to Offer Bitcoin Wallet

Cryptocurrencies have dominated the fintech headlines this week- from Mastercard agreeing to allow merchants to accept payments in cryptocurrencies to BNY Mellon’s announcement that it will begin custody of cryptocurrencies.

Today, after bitcoin reached an all-time high of over $48,000, marketing services company Kasasa unveiled plans to help its bank and credit union clients provide bitcoin wallets to their consumers.

The new capabilities will be powered by a partnership with New York Digital Investment Group (NYDIG), a technology and financial services firm dedicated to Bitcoin. The collaboration will help Kasasa’s bank clients stay ahead of the rapidly growing bitcoin adoption.

“Clearly, Bitcoin is here to stay, and consumers are demanding that Bitcoin offerings be made through their trusted financial institutions,” said Kasasa CIO John Waupsh. “With this new partnership, we’re looking across the product and services that Kasasa currently offers, as well as future product and service ideas. With NYDIG we can evaluate new offerings such as a buy-sell-hold wallet while also incorporating Bitcoin into our core rewards business.”

This partnership will be a major selling point for Kasasa, especially as consumer interest in cryptocurrencies rise. According to NYDIG, more than 22% of U.S. adults over the age of 18 own Bitcoin today.

This interest, combined with the creation of formal regulation like the OCC’s recent ruling that banks may use stablecoins for payment facilitation, is bringing cyrptocurrencies into the forefront of banks’ agendas. With today’s partnership, Kasasa is better positioned to help small financial institutions compete with larger players when it comes to cryptocurrencies.

Photo by Executium on Unsplash

Credit Karma Announces Integration with TurboTax

Credit Karma Announces Integration with TurboTax

An integration between two of Intuit’s top acquisitions, consumer financial technology platform Credit Karma and TurboTax tax management software, will help put the former’s new U.S. checking account – Credit Karma Money Spend – in the hands of more consumers.

The integration will provide a seamless process for getting refunds to eligible taxpayers when they file their taxes with TurboTax – and then turn those taxpayers into Credit Karma checking accountholders. Filers on TurboTax will have the ability to open a Credit Karma Money Spend account and have their refund sent directly to that new checking account. Users then can access the full Credit Karma Money experience – for example, setting up direct deposit and adding debit cards to their digital wallets – from within TurboTax. The checking account’s Instant Karma feature also encourages users to make payments with their Credit Karma Money Spend accounts by offering monetary rewards for actions like on-time credit card bill payments and automating direct deposits.

“We believe consumers should have a checking account that helps them make financial progress, which is why we created Credit Karma Money Spend,” Credit Karma founder and CEO Kenneth Lin explained. “We’re starting 2021 off by leveraging our relationship with Intuit to bring Credit Karma Money to millions of tax filers this tax season.” Lin referred to tax refunds as “the biggest paychecks” many Americans receive, and added that getting taxpayers the refunds they are owed and helping them put that money to work “(maximizing) their day-to-day spending and billpay” is a critical role the new integration will play.

Acquired by Intuit in a deal just completed in December, Credit Karma is among Finovate’s earliest alums, demonstrating its consumer credit score monitoring platform back in 2008. Now with more than 110 million members in the United States, Canada, and the U.K., Credit Karma offers a wide range of financial wellness solutions for individuals including identity monitoring, credit cards and loan shopping, insurance, high-yield savings accounts and, most recently, its new checking accounts backed by bank partner MVB Bank.

The integration news comes in the wake of a flurry of recent criticism that Credit Karma’s credit scores varied from what users were expecting when engaging with credit card companies or prospective lenders. The differences have since been explained – Credit Karma uses a credit score model, VantageScore 3.0, that not only examines factors other than those traditionally considered for FICO scores, but also can weigh like factors differently. But the issue may reflect a growing trend of popular annoyance with some of the ways fintechs are able to provide the services they do. This “Robinhood Syndrome” is a challenge that is only likely to grow as more customers – with varied expectations and financial sophistication – continue to migrate to fintech platforms.

Photo by Joslyn Pickens from Pexels

Moody’s to Acquire Cortera

Moody’s to Acquire Cortera

Data analytics firm Moody’s announced plans to acquire data insights company Cortera this week. Terms of the deal, which is expected to close in the first quarter of this year, are undisclosed.

Moody’s anticipates the purchase will enhance its risk assessment capabilities. The move will also significantly extend Moody’s coverage in the SME market– the segment that serves as Cortera’s focus.

“Cortera plays an important role in helping businesses understand each other,” said President of Moody’s Analytics Stephen Tulenko. “Our customers will be able to leverage Cortera’s extensive information on small businesses with Moody’s proprietary analytic tools to make better decisions.”

Cortera was founded in 1993 and provides credit data and workflow solutions on North America-based public and private organizations. The Florida-based company maintains a database of credit information on more than 36 million businesses across the continent.

Cortera sources this data from thousands of resources and scrubs it using AI. As a result, the company is able to provide analytics, reports, and monitoring services to help inform businesses’ decisions.

Specifically, the acquisition will augment Moody’s Orbis database of private company information and enhance its KYC, commercial lending, and supply chain solutions.

Moody’s was founded in 1900 and provides data, analytical solutions, and insights to help businesses identify opportunities and manage risk. The company employs more than 11,000 people across 40+ countries. Headquartered in New York City, Moody’s is publicly traded on the NYSE under the ticker MCO. The company has a market capitalization of $52 billion.

Photo by Hunter Harritt on Unsplash

Klarna Launches Bank Account Offering in Germany

Klarna Launches Bank Account Offering in Germany

Klarna is taking its Buy Now, Pay Later (BNPL) platform to a logical next step. The Sweden-based company announced today it will launch a bank account offering in Germany.

This move makes Klarna the first BNPL firm to make such a move. The company will now compete with the growing roster of digital banks in Germany, including N26 and Tomorrow.

Users will receive a Visa debit card, which is available in two colors, and will have tools on the app to track, manage, budget, and analyze their spending habits. Klarna will also reimburse users for two global ATM transactions per month.

“Our focus is to provide a superior shopping experience to our consumers at the intersection of retail and banking,” said Klarna CEO Sebastian Siemiatkowski. “And we know that there’s still massive room for improvement to the way many people bank and save their money today. Users are demanding more seamless, intuitive and transparent services to meet their daily needs, but many banks still do not cater for this.”

As Siemiatkowski points out, Klarna banking will be useful for “bundling shopping and banking in one app.” However, it is difficult to see the extra value a Klarna bank account will bring to users who aren’t big on shopping. N26 touts an integration with Transferwise for easy and inexpensive foreign money transfers and Tomorrow differentiates itself with a positive approach to sustainability and social causes. Klarna, in contrast, makes shopping a more embedded experience. This isn’t necessarily a positive attribute for one’s finances.

To counteract this “spend, spend, spend” mentality, Klarna said it has plans to add savings goals to the banking app, a feature that is already available in Sweden.

A pilot of Klarna’s bank account will initially be available to the company’s “most loyal” users and will roll out to all Germany-based users “in the coming months.”

Photo by Christian Wiediger on Unsplash

Cirrus Helps Berkshire Bank Deliver on SBA and PPP Lending

Cirrus Helps Berkshire Bank Deliver on SBA and PPP Lending

One of the biggest impacts of COVID-19 in the financial services world has been to invigorate the relationship between banks and fintechs. This week’s news that Berkshire Bank has turned to cloud-based document management solution provider Cirrus to help it manage financial relief efforts for small businesses is another example of this trend.

“Cirrus’ portal plays a key role in expediting the process of managing SBA loans, enabling Berkshire Bank to collaborate remotely, execute rapidly, and scale quickly to efficiently address the influx in loan requests and alleviate the document chaos associated with SBA lending,” Cirrus founder and CEO David Brooks explained.

Challenged with a massive inflow of SBA loan requests, including 942 Paycheck Protection Program loans on the program’s first day, Berkshire Bank will also benefit from real-time transparency into the progress of each loan. The combination of automation and greater visibility via the integration make the overall lending process faster and more efficient, for both the bank and the customer.

This capacity, Brooks noted in an article written last month, is important. But so is scalability and the ability of businesses and the solutions they depend on to react and adapt to new potential challenges. “With a new administration in place, it is uncertain what additional relief programs may be on the horizon,” Brooks wrote. “By taking time to evaluate existing technology and operational workflows to ensure they are configurable and scalable to support PPP, financial institutions will be better positioned to accommodate future programs.”

Headquartered in Evergreen, Colorado, Cirrus works with banks and other businesses to help them better manage the document processing needs of their commercial and small business accountholders during onboarding and when seeking financing. The company made its Finovate debut last year at our all-digital conference, demonstrating version six of its front-end document management solution.

Founded in 2018, Cirrus includes The FIS FinTech Accelerator in Partnership with The Venture Center and Queen City Fintech among its investors.

Berkshire Bank operates 130 branch offices in New England and New York, and has $12.9 billion in assets. The bank is owned by Berkshire Hills Bancorp, a Boston, Massachusetts-based bank holding company.

Photo by Johann Piber from Pexels

Mambu and Signicat Team Up to Digitize Identity Management in Europe

Mambu and Signicat Team Up to Digitize Identity Management in Europe

A just-announced partnership between two Finovate alums – Mambu and Signicat – will bring digitized identity management services to banks, fintechs, and financial service providers across Europe. The collaboration between the SaaS banking platform and the digital identity company is designed to help institutions in the region leverage innovations in identity management to boost customer acquisition, enhance the customer experience, and defend against identity fraud.

The single-API integration between Signicat’s identity platform and Mambu will enable users to apply a variety of digital identity verification solutions to a range of processes, including onboarding, identity authentication, and e-signatures. In their joint statement, both companies highlighted abandonment as one challenge the new integration will help companies meet. They noted that 63% of consumers in Europe quit at least one financial app in the last year, citing research conducted by Signicat.

At the same time, the integration also will help companies deal with the new environment for cybercrime, particularly identity fraud, which has flourished in the work-from-home, COVID-19 era. “Identity fraud continues to be a major threat to businesses across the globe and damages trust,” Mambu Managing Director for EMEA Eelco-Jan Boonstra said. “And with everyone working from home – the COVID-19 pandemic has only accelerated this. Therefore financial service providers are relying on customer trust and loyalty more than ever.”

Asger Hattel, who took over as Signicat’s CEO in January of last year, underscored the way the pandemic had accelerated pre-existing trends toward digitization. “Global lockdowns have turned a desire for digital services into an urgent need,” Hattel said. “Our research into consumer attitudes towards onboarding show that financial service providers are struggling to keep up with consumer’s digital demands – and it is costing them customers.”

Mambu’s partnership with Signicat comes in the wake of the Mambu’s $132+ million (€110 million) fundraising last month – which brought the company’s total valuation to more than $2 billion (€1.7 billion). Also last month, Mambu announced the addition of new Chief Financial Officer Langley Eide. Founded in 2011 and headquartered in Berlin, Germany, Mambu is an alum of both our Finovate conferences – debuting in 2013 at FinovateAsia – and our event for developers and engineers – FinDEVr New York, in 2016.

Based in Trondheim, Norway, Signicat specializes in providing identity assurance worldwide, enabling banks to leverage existing customer identity to accelerate onboarding, improve access to services, and connect users, devices, and more across channels and markets. A Finovate alum since 2017, Signicat has raised $8.8 million in funding from investors including Horizon 2020, Viking Venture, and Secure Identity Holding.

Photo by Engin Akyurt from Pexels

Payoneer To Go Public Via SPAC, Now Valued at $3.3 Billion

Payoneer To Go Public Via SPAC, Now Valued at $3.3 Billion

Cross-border payments expert Payoneer is the latest fintech to go public via SPAC merger. The New York-based company has agreed to merge with FTAC Olympus Acquisition Corp.

The transaction is expected to close during the first half of this year.

Once the reorganization is complete, the newly created holding company will be renamed Payoneer Global Inc. and the combined company will operate as Payoneer, a U.S. publicly listed entity. After the deal is finalized, Payoneer will have an estimated value of $3.3 billion.

Payoneer was founded in 2005 and offers multi-currency accounts to marketplaces, sellers, freelancers, gig workers, manufacturers, banks, suppliers, and buyers. With a mission to “democratize access to financial services and drive growth for digital businesses of all sizes from around the world,” Payoneer helps users pay and get paid globally as easily as they do locally.

“Payoneer is at the forefront of the rapid, global shift to digital commerce across all sectors,” said Betsy Z. Cohen, Chairman of the Board of Directors of FTAC Olympus Acquisition Corp. “Its innovative and unique high-tech, high-touch platform positions Payoneer at the epicenter of some of the most powerful and enduring trends driving global commerce today. Its proven ability to facilitate the overall growth of e-commerce through capabilities such as B2B payment digitization, global risk and compliance infrastructure, and the enablement for SMBs to rapidly grow and scale sets Payoneer apart.”

Payoneer has raised $270 million from 18 investors including CBC Capital and 83North. Scott Galit is CEO.

Today’s news of Payoneer opting to go public via a SPAC merger echoes a larger trend. Lately, we’ve seen a rising number of tech companies, including Bank Mobile and SoFi, use SPAC mergers to go public. Benefits of the IPO alternative include a faster and cheaper process, no qualification threshold, and no IPO window.

Photo by NastyaSensei from Pexels

Brazilian Challenger Nubank Hauls in $400 Million

Brazilian Challenger Nubank Hauls in $400 Million

Followers of Finovate Global, our weekly look at fintech innovation around the world, are likely familiar with the story of Brazilian challenger bank Nubank. But with news of the firm’s $400 million Series G round – announced today – we suspect there will be quite a few fintech fans brushing up on the fintech industry in Latin America.

Company founder and CEO David Velez said that the funding will help Nubank grow and diversify its client base, as well as fuel expansion. He added that bringing more products to market is key to becoming the kind of “full service financial institution for clients” that Latin American consumers need. Nubank currently offers a digital savings account, and a no-fee credit card, as well as personal loans. A recent acquisition of Brazilian broker Easyinvest last fall, Nubank’s third of 2020, suggests that investment products also may soon be among the challenger bank’s offerings.

Headquartered in Brazil’s largest city São Paulo, NuBank has earned a valuation of $25 billion with its latest investment. The Series G was led by GIC, Whale Rock Capital Management, and Invesco, and featured participation from existing investors Sequoia Capital, Tencent Holdings, Dragoneer Investment Group, and Ribbit Capital. The investment more than doubles Nubank’s previous valuation, based its July 2019 funding. The funding also takes the company’s total capital to $1.2 billion and places Nubank among the top five financial institutions in the region.

Nubank serves more than 34 million customers in Brazil and Mexico, and recently expanded to Colombia. The company is part of a growing neobank movement in the country – and the region – that is taking advantage of the inefficiencies of incumbent banks. This, in fact, was a major motivating factor for Velez, as he explained last fall announcing the move into neighboring Colombia.

“Nubank was born out of the conviction that through technology, design, data science and a customer-centric vision we could create a new generation of financial services that make people’s lives easier, with no complexity and no bureaucracy,” Velez said last fall. “All Latin Americans deserve a more simple, transparent and human banking experience. Today, I’m proud to announce the arrival of Nubank in Colombia, my motherland. Our goal is to have a positive impact in the life of millions.”

Founded in 2013, Nubank participated in our developers conference, FinDEVR New York in 2016. At the event, Nubank co-founder and CTO Edward Wible and Principal Software Engineer Lucas Cavalcanti dos Santos led a presentation titled, “Our Money, Our Rulebook,” that explained how they build an in-house accounting system based on functional programming principles. For the past two years in a row, Nubank has been named by Forbes magazine as the Best Bank in Brazil, and Fast Company has dubbed Nubank the “most innovative company in Latin America.”

Photo by C. Cagnin from Pexels

In the Battle for Direct Deposits, Plaid Stands with the Little Guys

In the Battle for Direct Deposits, Plaid Stands with the Little Guys

Plaid’s newest product is sure to make consumers happy and large banks slightly terrified. The company is tapping the power of direct deposits for its new launch, Deposit Switch.

The new offering, which goes live in beta today, does exactly as it sounds. It offers financial institutions and fintechs a tool to help end consumers easily change which account their paychecks are deposited into.

Switching the destination of direct deposits is a hassle for consumers, and generally requires manual paperwork that has to change hands between their bank and employer. Deposit Switch aims to end this headache. The company is relying on its instant switch method that connects a consumer’s payroll account directly through Plaid Link, the quick-start method to integrating with Plaid’s API.

For end users, the direct deposit switch can be done in four steps, as illustrated below:

deposit switch flow

“For financial institutions, high-friction onboarding experiences can lead to consumer drop-off and inactive accounts—and can ultimately prevent banks from becoming a consumer’s primary financial institution,” Plaid noted in a blog post announcement. “A significant opportunity exists for expanded innovation that leads to better consumer outcomes. Plaid can help by building the infrastructure that bridges the gap between financial institutions and payroll data, starting with direct deposits.”

In addition to giving consumers more control over their financial lives, Deposit Switch could also be a boon for smaller financial institutions (FIs) and fintechs. That’s because Deposit Switch is a new tool for them to win over consumer deposits.

Generally, banks use a high interest rate, a one-time bonus, or an enticing gift to incentivize their clients to change their direct deposit. These options are costly, And for smaller FIs and digital banks especially, may not be feasible.

Many digital banks are having difficulty boosting their total assets under management in the first place. This is due to two reasons 1) consumers use them as an “accessory” bank while storing and depositing the bulk of their money in larger institutions and 2) Many clients that use a digital bank as their primary financial institution may not have as much net worth and/or don’t receive as high a salary as those who choose to bank with traditional FIs.

Yotta, a fintech app that helps users build their savings, is one of the fintechs beta testing Plaid’s Deposit Switch. “Working with Plaid, we’ve made it faster and easier for customers to take the first step by establishing and funding their accounts with direct deposit,” said Yotta co-founder, Ben Doyle. “Yotta also integrates with Plaid Exchange, so customers can securely use their Yotta account with other fintech apps for digital payments, financial planning, investments and more. Fintech is the new normal for most Americans and Plaid helps Yotta meet customers where they are.”

So what about large, traditional FIs? Should they be worried that fintechs are making it too easy for clients to pour their paychecks into competing accounts? The short answer: yes.

Photo by Kristina Paukshtite from Pexels

Ten Finovate Alums Join FedNow Instant Payments Pilot Program

Ten Finovate Alums Join FedNow Instant Payments Pilot Program

More than two years in the making, the FedNow payments initiative – launched by the U.S. Federal Reserve to accelerate payments and transfers – is picking up speed. The project currently has more than 110 banks, financial services providers, and other organizations slated to participate, and among them are ten Finovate alums.

“We’re gratified by the industry’s tremendous interest and willingness to devote time and energy to help us develop the FedNow Service,” Esther George, executive sponsor of the Federal Reserve’s payments improvement initiatives, said. George, who is also President and CEO of the Federal Reserve Bank of Kansas City, added that the pilot has had to “adjust” to accommodate greater than expected interest.

The idea behind the service is to expand the reach of instant payment services offered by financial institutions and enable businesses and individuals to send and receive instant payments, with full access to their funds within seconds. The FedNow Service will leverage the Federal Reserve’s FedLine network, which connects to more than 10,000 financial institutions directly or via their agents.

The pilot program is designed to review the technology’s features and functionality, assess the user experience, and greenlight the product for further testing and eventual general availability. Participating institutions will be retained, post-launch, to provide additional review and advice with regard to issues like adoption roadmap, industry readiness, and overall payments strategy.

“The FedNow Service marks a turning point in the industry’s move to making real-time payments a reality,” Booshan Rengachari, founder and CEO of Finzly, explained. Finzly is one of Finovate’s newest alums – most recently demoing its technology at FinovateWest Digital last fall – and is one of the participants in FedNow’s pilot program.

Rengachari further suggested that this “turning point” was a moment his company had anticipated. “We created our Payment Hub specifically to help FIs prepare and go to market faster with newer RTP networks,” he said. Finzly’s CEO added that this helps “address the challenges of offering single payment API for multiple payment networks without having to run disparate payment systems from multiple vendors.”

The 10 Finovate alums participating in the FedNow project are listed below.

Photo by Inge Wallumrød from Pexels