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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Enterprise risk and banking fraud protection NetGuardians landed $19 million (chf 17 million) in funding this week.
The round, which is more than double each of the company’s previous rounds, brings the company’s total funding to $34.5 million (chf 30.6 million). Investors include NetGuardians client the Pictet Group, as well as private investment group ACE & Company.
NetGuardians will use the investment to help it meet rising demand for its fraud-mitigation software. Specifically, the company will strengthen its position in existing markets and further develop its SaaS subscription model.
“Since our first round of funding, we have been able to grow and strengthen our fraud-mitigation platform worldwide, serving institutions in more than 30 countries,” said NetGuardians Chief Strategy Officer Raffael Maio. “This latest round of funding will help us to reach more clients and explore new markets with our Collective AI technology provided as software-as-a-service.”
Founded in 2007 and headquartered in Switzerland, NetGuardians employs 90 people in its offices across Singapore, Kenya, and Poland.
HooYu announced on Monday that GB Group (GBG), an identification verification specialist based in the U.K., has agreed to acquire its Investigate subsidiary in an all-share deal valued at approximately $5.34 million (£4 million).
“The acquisition of HooYu Investigate by an outstanding company like GBG is a testament to the technological achievement of the HooYu development team,” HooYu CEO Keith Marsden said. “We are now very excited to focus all our energy on taking the award-winning HooYu Identity platform forward.”
HooYu launched HooYu Investigate in 2017. The platform automates the fraud investigation process, leveraging data visualization to enhance the ability of users in compliance, anti-fraud, and law enforcement to identify and prevent cybercrime. GBG will add the technology to its portfolio of anti-fraud solutions, and both Investigate client contracts and the platform’s developers will join GBG as part of the transaction. HooYu will continue to run its digital customer onboarding and KYC solution, HooYu Identify, which includes NatWest and Vanquis Bank among its customers.
GBG CEO Chris Clark praised HooYu Investigate as an “exceptional product” that will complement GBG’s current business. He also looked forward to a future in which both the GBG and HooYu development teams are working together to build new solutions. “By joining forces with HooYu Investigate, GBG will create a scalable platform for growth, providing customers with a critical service to fight ever more sophisticated financial crime and reduce organizational risk in the U.K.” Clark said.
Founded in 2015 – and making its Finovate debut two years later at FinovateEurope – HooYu offers businesses configurable tools to make the customer boarding process easy for customers while ensuring maximum KYC compliance. With just a selfie taken by a smartphone or webcam, HooYu applies both traditional verification methods such as database checks with ID document validation, digital footprint analysis, and facial biometrics to provide an identity confidence score that reveals how many of the customer’s identity attributes (name, address, birthdate, etc.) can be confirmed. This gives businesses the insight they need not just for customer onboarding and KYC, but for age verification, customer due diligence remediation, and fraud prevention, as well.
Some of the hottest headlines in international fintech in recent days involved industry innovators from the Land Down Under. Late in the week, financial consultancy firm Synechron announced that it had agreed to acquire Australian payments provider Attra. Headquartered in Melbourne, Attra is notable for being one of pure play payments solution providers in Australia, with reach throughout the region as well as into North America, Europe, and MENA. Attra will retain its brand identity post-acquisition.
Meanwhile, National Australia Bank (NAB) unveiled a new smart receipt solution developed in collaboration with Australian fintech Slyp. The offering, Slyp Smart Receipts, are available via the NAB mobile app, and enable NAB customers to automatically get itemized smart receipts from participating retailers.
“Receipts are a burden for customers, create unnecessary cost for businesses and have a negative impact to our environment,” Slyp CEO and co-founder Paul Weingarth said. “The introduction of smart receipts allows businesses to offer a seamless and frictionless customer experience far beyond what we know it as today.”
On the e-commerce front, the buy now pay later revolution rolls on. Zip, a BNPL company based in Australia, inked a deal with Facebook this week that will enable small businesses to use its installment payment service to pay for Facebook ads.
Zip’s partnership with Facebook is its second big, e-commerce collaboration in recent months. In August, the company teamed up with eBay, bringing its buy now pay later offering to the online marketplace.
Risk decisioning leader Provenir announces data integration partnership with Philippines-based alternative credit scoring company FinScore.
South Korean payments firm CHAI scores $60 million in Series B funding.
Mastercard and Pine Labs to bring their integrated buy now pay later solution to five markets in Southeast Asia early in 2021.
Sub-Saharan Africa
The Banker looks at how Nigeria’s fintech industry is thriving in the face of economic challenges.
TechFinancial reviews the growth of fintech in South Africa through the lens of the country’s Financial Sector Conduct Authority.
Convergence Partners, a South African technology investment management company, announces $5 million investment in sub-Saharan mobile money services company Channel VAS.
Central and Eastern Europe
German digital asset custody technology provider Bitbondpartners with Bankhaus von Der Heydt to issue a Euro stablecoin on the Stellar network.
Hungary’s Magyar Nemzeti Bank (MNB) inks cooperation agreement with the Monetary Authority of Singapore to boost collaboration in fintech innovation between Hungary and Singapore.
Berlin-based plug and play, European securities API provider Upvest raises additional €five million to boost its Series A to €12 million.
Middle East and Northern Africa
Egyptian fintech Zeal Rewards secures “six-figure” seed investment from an unnamed angel investor.
Israeli entrepreneur Uri Levine predicts that the next unicorn from the MENA region will come from the UAE.
SME10x looks at how the buy now pay later movement is transforming ecommerce in the Middle East.
Central and Southern Asia
IBS Intelligence features five top digital lenders in India.
Bangalore-based i-exceedreports gains in digital onboarding adoption rates in corporate banking.
SafePay, a company that enables B2C payments, secures funding from new Pakistan-based VC firm backed by Gobi Ventures.
Latin America and the Caribbean
Bitso, a cryptocurrency platform based in Mexico, raises $62 million in Series B.
Cross border B2B paytech provider TransferMate announces licensing approvals in Brazil and Chile.
Mexican challenger bank albo secures $45 million in funding.
The new curriculum, Sallie Mae’s Knowledge for College program, will be made available to high school juniors and seniors in California either in a classroom or virtually. The program is focused on helping provide students – and their families – with the information they need to know in order to finance their higher education goals. The partnership between EVERFI and Sallie Mae comes as research indicates that eight in ten families find affording college “challenging,” less than half of families have a plan to pay for college, and just over half (51%) of students have researched financial aid opportunities.
The two companies also noted that California is unique in that it does not require high school students to take coursework in personal finance before graduating.
“Students and families continue to value higher education, but there’s still a certain level of anxiety and angst about how to pay for it,” Ray Martinez, co-founder and president of EVERFI, said. “(This) is why it is crucial that we provide these students with necessary tools to become confident in their ability to make smart financial decisions well into adulthood. Ensuring students and their families fully understand not only the process by which to apply for student financial aid, but also the responsibilities it carries is of the utmost importance and will help set them up for financial success.”
Knowledge for College includes five interactive modules to help students develop strategies for financing their post-secondary education and, beyond that, building good financial habits for life. Saving and budgeting are among the topics included in the curriculum, as are more advanced topics such as student loans and consumer financing.
“Financial literacy provides students with a strong foundation of knowledge and confidence in making informed decisions about the future,” Sallie Mae SVP Jen O’Donald said. “That future includes planning and paying for higher education, which is one of the first major financial decisions for many students and families. We want families to make these decisions with eyes wide open and that means providing critical education and information early in the process through programs like Knowledge for College.”
Washington, D.C.-based EVERFI made its Finovate debut last year at FinovateSpring. Founded in 2008, the company has been busy making friends this fall: teaming up with Athletes First this month and the Anti-Defamation League (ADL) last month to help develop educational programs to boost African American history and fight anti-semitism, respectively. On the fintech front, EVERFI announced in November that it was working with Zelle to launch a free digital financial literacy course for high schools, and, in October, partnered with Citizens Financial Group to enhance the company’s existing College Bound Citizens education outreach initiative with a “robust digital component.”
We featured EVERFI in our look at the importance of financial literacy earlier this year. The company has raised more than $250 million in funding from investors including Jeff Bezos, Eric Schmidt, and the Rise Fund, among others.
Restaurant payments and analytics innovator Upserve is the latest company to be acquired by point of sale (POS) and ecommerce solutions firm Lightspeed.
The $430 million purchase was announced earlier this week, marking Lightspeed’s 10th acquisition since it was founded in 2005. The deal comes on the heels of Lightspeed’s November purchase of ShopKeep that is anticipated to close for $440 million.
“Lightspeed is quickly emerging as a world-leading commerce platform for SMBs and partnering with them to deliver data-based insights through a single digital hub was a natural choice,” said Upserve CEO Sheryl Hoskins. “Together we look forward to empowering North American restaurateurs to deliver superior guest experiences and make them wildly successful.”
Lightspeed anticipates the acquisition will accelerate product innovation and boost its analytics commerce platform. The company’s purchase of Upserve will also help Lightspeed reach an additional 7,000 U.S.-based clients in the hospitality industry.
Originally founded under the name Swipely in 2009, the company rebranded to Upserve in 2016 to reflect the company’s focus on the restaurant industry.
Upserve has raised a total of $40.5 million from 14 investors, including Greylock and Vista Equity Partners. From October 2019 to October 2020, the company recorded approximately $40 million in revenue.
It’s been a grand week for Finland’s ReceiptHero. The company announced a few days ago that it was teaming up with SEB Kort to have its digital receipt functionality integrated into SEB Kort’s corporate card, Eurocard. Then, we learned that ReceiptHero had inked a deal with fellow Finovate alum ETRONIKA that will enable the launch of the first e-receipt solution in the Baltic region. The new offering will allow ETRONIKA’s business customers to use their KASU retail network management system and ReceiptHero’s technology to issue digital receipts to their customers.
“ETRONIKA has built a truly modern retail chain management and POS product and we are thrilled to be partnering on a wider partnership that allows us the initial steps of building out the Baltic ecosystem.” ReceiptHero CEO Joel Ojala said.
Today comes more news from the Finland-based fintech. Courtesy of an investment from VC Lifeline Ventures, Superhero Capital, and Vidici Ventures of Sweden, ReceiptHero has picked up $2.43 million (€2 million) in seed funding.
“We’re making some real strides now with merchants and potential bank partners,” Ojala said. “We’ve hit an inflection point where banks understand the potential of digital receipts and value for their customers. For merchants they feel safe with ReceiptHero protecting their customer data and payment information.”
Growing interest in ReceiptHero’s technology, which transmits digital receipts from merchants directly to customer banking or account apps, comes as Finland’s government has decreed that digital receipts will be mandatory by 2025. Finland launched a digital receipt pilot project in 2019 that saw more than 50,000 state workers shopping exclusively with merchants using ReceiptHero’s platform.
ReceiptHero made its Finovate debut earlier this year at FinovateEurope in Berlin. Headquartered in Helsinki, the company is also partnered with Nordea, integrating its technology with the bank’s Nordea Wallet offering at the beginning of last year. Other recent ReceiptHero partners include SKJ Systems, Diebold Nixdorf, and global IT system integrator CGI.
With more than $9 billion in assets, VyStar Credit Union is the latest community-based financial institution to partner with open finance money experience innovator MX. VyStar, one of the 20 largest credit unions in the U.S., will leverage MX’s data connectivity APIs, account aggregation, and data enhancement tools to enhance the online experience for its more than 735,000 members in Georgia and northeastern Florida.
“Our strategy is to harness innovation and strategic fintech relationships that provide the best experiences that will improve our members’ financial well-being, and this partnership with an innovative fintech like MX is a big step in furthering that strategy,” Joseph R. Colca, SVP of Digital Experience at VyStar Credit Union, said. “We’ve been impressed not only with MX’s world-class data enhancement tools, but also with the alignment of our missions to empower financial strength through member advocacy.”
The partnership will enable members of VyStar Credit Union to aggregate and view accounts from all of their financial institutions into a single interface. MX’s technology collects, cleanses, and enriches transaction data, providing insights that help users more accurately plan their financial futures, as well as take smarter financial actions in the present. VyStar believes that embracing the technology will enable the Jacksonville, Florida-based credit union to gain wallet share among its customers by removing any need to log in to other apps or websites.
“With MX, VyStar is giving its customers greater clarity into their finances, which is exactly the kind of innovation, partnership, and money experience that MX loves to enable through our powerful data platform,” Chief Customer Officer for MX Nate Gardner said.
A multiple time Finovate Best of Show winner, MX most recently demonstrated its technology last year at FinovateFall. A leading data platform for banks, credit unions, fintechs, and other financial services providers, MX offers solutions to quickly and accurately collect, enhance, analyze, and present financial data. The company enables financial institutions to better understand and serve their customers, and helps them empower their customers to make better, more informed financial decisions.
Founded in 2010 and headquartered in Lehi, Utah, MX has made headlines in recent months via its partnerships with companies like Borrowell, a leading credit education firm based in Toronto, Ontario, Canada; Advicent, a SaaS technology solution provider for financial advisors and planners headquartered in Milwaukee, Wisconsin; and Central Pacific Bank , a full-service financial institution based in Honolulu, Hawaii. Named to the 2020 CB Insights Fintech 250 and highlighted as one of the fastest growing companies in Utah, MX unveiled its open finance platform, MX Open, in September. Ryan Caldwell is co-founder and CEO.
Branded payments firm Blackhawk Network has always been busy over the holiday season. Between its gift cards, digital rewards, and prepaid cards, the California-based company has helped people embrace the spirit of giving.
And while Blackhawk Network is still helping fuel the gifting and rewards economy this year, it is moving to an even more 2020-friendly (that is to say, digital-first) approach.
Last week Blackhawk announced it has teamed up with Evite to power the digital greeting card and invitation company’s eGift card program. Evite users can now choose from more than 100 eGift card options from popular brands including Lowe’s, Red Lobster, and Old Navy.
“It’s no surprise we’ve seen the demand for virtual gifts and greetings skyrocket in 2020. Contactless gifting is now a must-have, especially with the holidays approaching,” said Evite CEO Victor Cho. “Adding an extra touch like an eGift card can help people create personal connections with family and friends that they haven’t been able to see. It also helps our users stay safe, creates maximum flexibility for gifters and receivers, and modernizes the 2020 gifting experience. Thanks to Blackhawk’s expansive network of eGift card choices, our users have a broad selection to choose from at the tip of their fingertips.”
Brett Narlinger, head of global commerce at Blackhawk Network, noted that Blackhawk has seen a 70% increase in eGift sales– all before the peak holiday shopping season.
In addition to its partnership with Evite, Blackhawk announced a new payment solutions suite called Pay4It that connects physical and digital payments. The suite helps merchants reach underbanked populations with the ability to add cash to a digital wallet, mobile app or account, or make payments for digital goods with cash. It also offers consumers more choices to pay by enabling additional digital wallets and transforming loyalty points and rewards into purchasing power. Finally, Pay4It brings the gift card mall to non-traditional locations and into the digital realm.
“Retailers’ and merchants’ businesses changed instantly this year, and Blackhawk has responded with a product suite that brings once-disparate physical, digital and stored value payments together, keeping brands and consumers connected in a seamless way,” said VP of Global Product Strategy at Blackhawk Network Helena Mao.
An alum of FinovateFall 2012, Blackhawk Network was founded in 2001 and was acquired in January of 2018 by Silver Lake and P2 Capital Partners in a deal worth $3.5 billion. The company works with more than 1,000 brands and card partners, is in more than 200,000 retail locations in 28 countries, and connects with more than 300,000,000 shoppers each week. Talbott Roche is CEO.
One of the more fascinating stories in the history of black America is the rise of black-run banking institutions in the final decades of the 19th century. And while the early days of black banking and finance had their fair share of tragedy – the massacre at “Black Wall Street” in Tulsa, Oklahoma in 1921 among the more horrific – the industry persisted nevertheless, enabling black SMEs and families to access basic banking services and credit at a time when mainstream financial institutions refused to serve them.
It’s hard not to recall this history when reading the news that Fiserv has become a corporate partner of the non-profit African-American Credit Union Coalition (AACUC). As a new corporate partner, Fiserv will support the Coalition’s internship and mentorship programs, as well as make a financial contribution and back Coalition efforts such as its I’ve Got Five on It Giving Tuesday campaign.
AACUC President and Executive Officer Renée Sattiewhite acknowledged that Fiserv’s participation comes at a time of heightened awareness of and renewed determination to fight forms of systemic racism in particular. “As a year that has galvanized support for African-American community comes to a close,” Sattiewhite said, “we are looking forward to the future along with organizations like Fiserv.”
Fiserv General Manager of Credit Union Solutions and executive sponsor of the partnership Derek Everett put the collaboration in the context of Fiserv’s goal of better engaging underbanked communities. In addition to its partnership with AACUC, Fiserv is also investing $10 million in black- and minority-owned businesses via its Back2Business initiative. “As we begin our work with AACUC, our team is looking forward to strengthening existing relationships and forging new ones with the diverse communities and professionals AACUC strives to empower,” Everett said.
Headquartered in Duluth, Georgia, the Coalition promotes racial equality and fairness in the credit union industry, and supports black-led credit unions and credit unions serving black communities. Larry Sewell, who recently took over as chairman of the AACUC, discussed the challenge of diversity in an interview this fall. Currently Vice President of Corporate Partnerships and Advocacy for Together Credit Union, Sewell noted that of the more than 5,000 credit unions in the U.S., there are “approximately 170 African-American CEOs.” The number of women among those 170 CEOs, it should be noted, is impressive at more than 58%. But the industry clearly has room to improve in terms of ethnic diversity at its most senior, leadership ranks.
From in-house innovation to outright acquisition, businesses have myriad paths to consider when looking to expand their product portfolios. We learned late last week that mobile payments company Square has taken one of the less flashy routes to growing its offerings: paying $50 million in cash for Credit Karma’s tax business. Square will add the service’s DIY tax filing functionality to its own Cash App.
The free tax filing option will be featured along with the app’s other financial tools, including P2P payments, Cash Card, direct deposit, and the ability to make fractional investments in stocks and bitcoin. Cash App was launched by Square seven years ago as a P2P money transfer service and has grown into an integrated financial ecosystem with more than 30 million monthly active customers as of June 2020.
“We created Cash App to provide more access to the masses of people left out of the financial system and are constantly looking for ways to redefine our customers’ relationship with money by making it more relatable, instantly available, and universally acceptable,” Cash App lead Brian Grassadonia said.
One in two tax filers – a total of 80 million taxpayers – prepared and filed their own Federal income taxes electronically in 2020, according to the IRS, and the trend is expected to accelerate. Credit Karma Tax Director of Engineering Patrick Fink underscored this point, noting that despite the “challenge” of filing taxes, more customers are transitioning toward filing taxes on their own. “Credit Karma Tax provides a seamless, mobile-first solution for individuals to file their taxes at no cost,” Fink said. “We’re excited to be joining an entrepreneurial team and continue to build simple, innovative tools for Cash App customers.” Credit Karma tax processed more than two million tax filers last year.
The acquisition is expected to close by the end of 2020 and is subject to customary closing conditions.
Square’s investment in its Cash App is timely. At the beginning of the month, the company noted in its third quarter financial reporting that Cash App had generated more than $2 billion in net revenue and $385 million of its gross profit for the quarter. The performance reflected gains of 5.74x and 2.12x, year over year, respectively.
The timeliness of the transaction also has a lot to do with Intuit’s acquisition of Credit Karma, which was cleared by the U.S. Department of Justice last week. Announced at the beginning of the year, the $7 billion deal is Intuit’s largest acquisition to date, and by shedding Credit Karma’s tax business, an obstacle to the union between the two companies has been removed. Intuit is the developer of it own online tax filing service, TurboTax.
“We are very excited to reach this important milestone today,” Intuit CEO Sasan Goodarzi said. “This brings us one step closer to transforming personal finance by making it simpler for consumers to find the right financial products, put more money in their pockets, and provide financial expertise and advice.”
The Credit Karma Tax announcement also comes one month after Square announced a $50 million investment in bitcoin, a sum the company said represented “approximately one percent” of the firm’s total assets as of the end of Q2 2020. Bitcoin trading has been available on Square’s Cash App since 2018 and, as of 2019, the company’s Square Crypto team has been contributing to bitcoin open-source efforts.
“We believe that bitcoin has the potential to be a more ubiquitous currency in the future,” Square Chief Financial Officer Amrita Ahuja said. “As it grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey.”
Venture investing platform OurCrowd is taking home an investment of its own this week. The Israel-based company announced today it received $60 million in capital from Japan-based ORIX. The investment brings OurCrowd’s total funding to $172 million.
The goal of the funding and strategic partnership is to bring opportunities for Israel-based startups in the Asia region and will strengthen trade between the two regions.
“We are excited about investing in OurCrowd, Israel’s most active venture investor and one of the world’s most innovative venture capital platforms,” said ORIX UK CEO Kiyoshi Habiro. “We intend to be active partners with OurCrowd and help them accelerate their already impressive growth, while bringing the best of Israeli tech to Japan’s large industrial and financial sectors.”
Today’s deal isn’t the first time OurCrowd has made Japanese ties. Last year the company teamed up with Toyota Tsusho Corporation, a Japanese general trading company, to scout for startups that support autonomous driving industry.
OurCrowd was founded in 2013 and offers a platform that allows its 58,000 users to invest in 220+ pre-vetted startups and 23 venture funds. Jonathan Medved is CEO.
Mastercard has been busy this week. In addition to finalizing its acquisition of data aggregation provider Finicity, the company is also enhancing its Mastercard TrackBusiness Payment Service.
Mastercard launched its Track Business Payments Service in May of this year to help modernize the business payments experience. The overall goal of the initiative has been to provide businesses with a richer data exchange experience and greater control over payments.
Today’s launch adds account-to-account (A2A) functionality to the Track Business Payments Service. The new addition offers businesses a similar experience for A2A payments as they had with card payments. That is, businesses can exchange data with greater efficiency and facilitate payments across multiple payment rails including Real Time Payments (RTP) and the Automated Clearing House (ACH). Overall, the new tool enhances security, as it doesn’t require suppliers to share their bank account details with buyers, nor does it require buyers to store those details.
“Today, the vast majority of B2B payments are made through bank account transfers. Extending Mastercard Track Business Payment Service to support these transfers is a step on our way to building out the best and most secure B2B payment network in the world,” said Mastercard EVP of Global Commercial and B2B Solutions James Anderson. “Our commitment to supporting multiple payment rails has always been about helping customers operate more efficiently and effectively leveraging all the capabilities available in the market with as little change as possible.”
The A2A functionality is now available for Track Business Payments Service customers in the U.S. Mastercard plans to roll out the service for users in all geographies by the end of next year.
“This milestone is another step in the journey away from paper-based frustration, incomplete data, and manual reconciliation work and toward a fully digitized business payments process,” added Anderson.
