This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.
Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
The last time eBay truly dominated news headlines may have been in 2015, when it split from payments giant PayPal. Since then, the online marketplace has been quietly fending off new competitors including Amazon, Etsy, Rakuten, Mercari, and even Facebook Marketplace.
Today, however, the California-based company made an announcement that will help differentiate it from every other online marketplace– the company’s users can now buy and sell non-fungible tokens (NFTs). According to eBay’s updated policy, trusted sellers can now list and sell NFTs across multiple categories.
“This isn’t new to eBay,” said Senior Vice President and General Manager for eBay’s North America Market Jordan Sweetnam. “For 25+ years we’ve been the world’s destination for collectibles, connecting millions of buyers with sellers who have deep knowledge of the things they care about most. Our platform has helped collectors turn their hobbies into their livelihoods and, along the way, collectibles – ranging from beanie babies and railroad memorabilia to high-end art and rare coins – became an alternate asset class, combining passion with investment.”
Currently, eBay is allowing NFTs that fit categories such as trading cards, music, entertainment, and art. However, the company notes it will expand to facilitate the sales of NFTs across more categories.
You may inherently associate NFTs with cryptocurrencies because they, too, are held on the blockchain. However, eBay has not indicated any current plans to accept cryptocurrencies as a form of payment, so users can expect to pay for their NFT using a traditional online payment method such as a credit card.
Self-proclaimed “financial super-app” Curve announced it will soon go live with a crowdfunding campaign.
The campaign, which will launch “sometime in May,” will be held on Crowdcube and will enable Curve’s more than two million customers to invest and be part of its journey. Curve will use the funds to fuel its launch into the U.S. market and help it to expand further into Europe.
“We know many new customers missed out on our 2019 crowdfunding, and we’ve fielded constant requests to open a new round,” said Curve Founder and CEO Shachar Bialick. “Since we place our customers at the heart of everything we do, we wanted to offer another chance for them to be involved in our success, enabling them to be part of our journey.”
Funds raised from the campaign will add to the $169 million Curve has raised since it was founded in 2015. This includes the company’s recent $103 million (£72.5 million) Series C round it closed in January which received contributions from Fuel Venture Capital.
“With increasing fragmentation in financial services, and growing demand from consumers for a simpler way to control and manage their finances, the scene is set for Curve to seize a global opportunity,” said Bialick. “We are investing in our people and the business to make that happen.”
This news follows Curve’s 2019 crowdfunding round, which raised $5.7 million (£4 million) in 42 minutes. The move tripled the company’s valuation. The announcement also comes after a year of growth during which Curve hired over 100 new employees, doubled its customer base to over two million, and saw its transaction volume increase to $3.7 billion (£2.6 billion).
Curve has big plans for 2021, including the launch of its crowdfunding campaign. This year, the company is also working on the rollout of its Curve Credit product and will increase its workforce by 60%, hiring 200 additional employees.
The firms are Fort Community Credit Union, headquartered in Fort Atkinson, Wisconsin; Alltrust Credit Union (formerly Southern Mass Credit Union) based in Fairhaven, Massachusetts; and Statewide Federal Credit Union, headquartered in Starkville, Mississippi.
“We couldn’t ask for a better way to start 2021, signing these three progressive credit unions,” Bankjoy CEO Michael Duncan said. “Since we are now officially in the digital age thanks to the pandemic, these credit unions are now poised to hit the ground running with our most advanced online, mobile, and voice banking technologies. We are excited to see how they will perform and how their members will take advantage of these new offerings.”
Founded in 2015 and making its Finovate debut a year later at FinovateFall in New York, Bankjoy provides financial institutions with a variety of digital banking solutions ranging from mobile / online banking, and e-statements to online account opening and loan origination, as well as access to conversational AI-based products. From flagship banks to credit unions, Bankjoy offers an out-of-the-box alternative to outmoded legacy systems that prevent banks and credit unions from being able to meet the rising digital expectations of their customers and members.
“Bankjoy will improve our credit union’s digital banking solution and offer an experience that is in line with our members expectations,” Alltrust Credit Union Vice President of Operations Stephanie Medeiros said. “Our partnership with Bankjoy will allow us to maintain our commitment to our members while delivering the latest digital technology.”
“The Bankjoy solution will allow our members to access and manage their account from anywhere,” Statewide Federal Credit Union CEO Casey Bacon added. “They will have access to all of the conveniences of modern banking at their fingertips.”
Headquartered in Troy, Michigan, Bankjoy has raised $1.8 million in funding from investors including SixThirty and CheckAlt. The company is an alum of the Y Combinator incubator program.
You can thank Gen Z’s “I want it now” mentality for Credit Karma’s freshest release. Dubbed Instant Karma, the newest product is the latest to come from Credit Karma Money, the company’s challenger banking service.
According to TechCrunch, which covered the launch, Instant Karma rewards users by randomly reimbursing their purchases.
Credit Karma General Manager Poulomi Damany told TechCrunch that, since the purpose behind Credit Karma Money is to “change people’s relationship with money” the new rewards product is an extension of that goal.
There are two major differentiating factors of Instant Karma over traditional payments rewards programs. The first is that the rewards are issued based on purchases made on debit cards, not credit cards. That’s because, as Credit Karma Product Manager Kyle Thibaut said, “Gen Z do not necessarily like credit cards. When you talk to them, they like debit cards and debit cards are the way they spend. Debit card usage is higher than credit cards in the U.S., and it’s actually growing while credit card usage is declining.”
The second point of differentiation is that the reward is issued the instant the user makes the transaction. Traditional cash-back programs, in contrast, will only issue rewards based on a time scale (eg., monthly) or once they reach a certain threshold (eg., the balance reaches $25).
So far, Credit Karma has rewarded $5 million in rewards on 100,000 transactions.
Founded in 2007, Credit Karma added a checking feature to its Credit Karma Money suite in October of last year. This complements the savings tool the company launched in October of 2019, when it initiated its entrance into the neobanking space. Prior to this, Credit Karma operated solely in the financial wellness space, in which it continues to offer its 110 million members access to credit scoring data, loan and credit card marketplaces, identity monitoring, and tax filing tools.
Railz, an API developer that helps connect financial institutions and fintechs with their customers’ accounting information in real-time, has secured an investment of $12 million. The Series A round, led by Nyca Partners, takes the Toronto, Ontario, Canada-based company’s total funding to more than $15 million.
“While there are many players who focus on collecting data across various accounting packages, the challenge of understanding what the data actually means, and how to categorize it, continues to be a major hurdle for the users of this information,” Railz CEO Sohaib Zahid said. “Railz’s data normalization solution, coupled with our insights and analytics engine, is the secret sauce that can address this challenge – and tackle it more accurately and quickly than any other service offering in market.”
Also participating in the Series A were Vestigo Ventures, Susa Ventures, Plug and Play, N49P, Hack VC, Global Founders Capital, and Entrée Capital. The company plans to use the new capital to add more talent to its sales and engineering teams.
Railz offers a single API that integrates with all major, SME-oriented accounting platforms to enable on-demand access to financial transactions, analytics, and insights. The fast, low-cost, accounting-data-as-a-service solution gives small businesses the ability to be better served by financial institutions by giving them an easier, less cumbersome way to share their critical financial information.
“Businesses use accounting software as a single source of truth to record the financial health of their company,” Nyca Partner Jeremy Solomon said. “Sharing this data with another party is currently a manual process that is slow, expensive, and error-prone.”
With just a few lines of code, Railz claims that it can get customers up and running with its technology in less than a day. The company’s real-time financial analytics and insights offer risk scoring and fraud identification, in addition to standardized accounting entries that use a universal format for easier modeling and reporting. Founded in the summer of 2020, Railz says its customers have benefitted from up to a 53% reduction in costs and a 75% reduction in fraud.
Corporate expense management platform Divvy has agreed to sell to small business financial software provider Bill.com for $2.5 billion.
Adding Divvy’s technology to its platform expands Bill.com’s solution. The new capabilities will help the California-based company enable its 115,000 customers to automatically manage accounts payable, accounts receivable, and corporate card spend. Additionally, Divvy’s tools will offer businesses real-time insight into their B2B spending and provide them access to multiple payment solutions.
Combining the two companies also boosts Divvy’s capabilities. The Utah-based company will be able to offer its 7,500 small business customers automated payable, receivables, and workflow capabilities. “As we listened to our customers, we heard them ask for a comprehensive payments platform so that they don’t have to use multiple software systems to manage their finances,” said Divvy CEO and Co-Founder Blake Murray. “Today I’m proud that Divvy is joining Bill.com to bring the one-stop-shop platform that our customers and the market have been asking for.”
“Since founding Bill.com, I have been driven by the desire to build solutions that make a real difference for small and mid-sized businesses. Customers have been asking us to help them with their spend management, and I am excited that together with Divvy, we can deliver on that ask, furthering our vision to transform SMB financial operations. Our expanded platform will provide more automation and real-time information to SMBs, enabling them to make more informed decisions,” said Bill.com CEO and Founder René Lacerte. “We are excited to work with the talented Divvy team. We have a shared passion for helping SMBs succeed and both companies are driving our customers’ digital transformations. Together, we can further empower SMBs to transition quickly and easily.”
Today’s deal is expected to close by the end of September and is subject to regulatory approvals closing conditions.
Bill.com was founded in 2006 and went public in 2019. With a market capitalization of $12.33 billion, the company trades on the New York Stock Exchange under the ticker BILL.
Founded in 2016, Divvy has raised $418 million from investors including PayPal Ventures, Insight Partners, and New Enterprise Associates.
Payments network Ripple is bolstering its ranks this week with the appointment of Kristina Campbell as CFO.
Campbell has been tapped to drive Ripple’s financial strategy, accelerate growth, and deliver value to shareholders. She most recently served as CFO at PayNearMe and has also held multiple roles at GreenDot.
“Digital asset technology allows us to rethink and improve the systems and infrastructure around how money moves. With this technology, we will make the global financial system accessible to all,” said Campbell. “Ripple is uniquely positioned to improve global payments in ways that have yet to be defined and I’m excited to be a part of that solution.”
Ripple also revealed that Rosa Gumataotao Rios, 43rd Treasurer of the United States, has joined its Board of Directors. In her role as Treasurer, Rios oversaw all currency and coin production and focused on economic development, urban revitalization, and real estate finance.
“I’ve dedicated my career to financial inclusion and empowerment, which requires bringing new and innovative solutions to staid processes. Ripple is one of the best examples of how to use cryptocurrency in a substantive and legitimate role to facilitate payments globally,” said Rios. “Blockchain and digital assets will underpin our future global financial systems. Cryptocurrency is the what. Ripple is the how.”
Ripple CEO Brad Garlinghouse said that the new appointees come “at a pivotal time for the company.” Garlinghouse’s phrase, “pivotal time,” is in reference to Ripple’s international expansion efforts; earlier this spring the company acquired a 40% stake in Asia-based cross-border payment specialist Tranglo. It is also a head nod to the lawsuit Ripple is currently facing.
The U.S. Securities and Exchange Commission (SEC) alleged that Ripple co-founder Chris Larsen and CEO Brad Garlinghouse conducted an illegal securities offering that raised more than $1.3 billion through sales of Ripple’s XRP currency. Ripple, which considers XRP as a currency and not an investment contract, is denying the allegations.
Backed by SBI Holdings, Santander, Andreessen Horowitz, and Lightspeed, Ripple has raised $294 million and is valued at $10 billion.
We caught up with Taylor Burton, co-founder of Till Financial, one of the many companies that are innovating in the youth financial wellness space. The Massachusetts-based startup, launched in 2018, introduced its free, collaborative family banking platform this spring. At the same time, Till secured $5 million in funding in a round led by Afore Capital – which is where our conversation begins.
You’ve just secured a significant investment. What does the funding mean for Till?
Taylor Burton: It means an increased ability to positively impact the trajectory of kids as they prepare for launch. The group of investors that we assembled share our vision for how collaborative family banking should look—we are excited to continue to add more supporters as we scale our platform.
We are thrilled to have the support of like-minded investors including Elysian Park Ventures, Pivotal Ventures with Magnify Ventures, Afore Capital, Luge Capital, Alpine Meridian Ventures, The Gramercy Fund, SM Ventures (the family office of the founders/CEOs of Stadium Goods) and Lightspeed Venture Partners’ Scout Fund. Also participating were angel investors such as the founders of fintech Petal, the founders of alcohol marketplace Drizly, the president of Transactis, and the president of 1800Flowers.
We will be adding to our high-quality team in all areas that support our customers through their journey on Till. Marketing that provides the content to help families have the first “real” conversation about money. Development to accelerate our vision of what our product can be, plus integrate all the great ideas coming out of the Till user community. And customer success to ensure that a Till family is maximizing its experience on the platform.
How does Till help empower children to become smarter spenders?
Burton: Till is designed to encourage open and honest discussions between parents and their kids. The goal is to help kids learn by doing and to gain confidence in spending decisions. We do this in the following ways:
The right tools: Till equips kids with their own bank account, digital and physical debit cards, and goal-based savings tools.
Emphasis on community: A child can easily set up a goal on the app that they can use to start saving toward and give family members (such as grandparents, other family members or community members) the opportunity to help pitch in. This gives members of the child’s network an opportunity to support them towards their goals. After all, it takes a village, and Till helps facilitate that.
Visualizing financial responsibility: Kids can also set up recurring payments for different ongoing responsibilities or subscription services that will get them used to the concept of paying bills on a timely basis.
That being said, along with teaching kids valuable saving habits, we want to be advocates for kids to feel empowered in their spending decisions just as much, if not more. Parents and the traditional legacy banking options tend to focus mostly on a child’s savings. At Till, we believe that we need to prioritize preparing kids to be smarter spenders, while supporting them through savings and investing. On our platform, kids learn to spend with intention and purpose, while parents gain confidence and trust based on transparency and accountability.
What is unique about the method that Till Financial uses?
Burton: One unique part of the app are the financial agreements which allow kids to have greater agency and responsibility over their money. Parents can create agreements and tasks that encourage kids/teens to understand the value of every dollar. By visualizing the financial responsibility of earning every allowance, they are able to be active participants in their financial journeys.
Additionally, as families are more spread out over time, Till reinforces the impact of community by leveraging family, friends, and members of their close networks to help the child reach their financial goals. Till also offers merchant partners curated with kids’ interests in mind. As we continue to grow, we will have more opportunities to add on to this list and provide kids with more incentives.
How does Till make money?
Burton: Till aims to be “first in wallet” and “only in wallet,” unlike other card offerings targeted at adults fighting to be “top of wallet.” Till captures value (revenue) when we deliver value to our customers. Unlike other legacy banks—and even some early digital ones that often time charge monthly or subscription fees—Till is free to all consumers, making us accessible to all users.
Till earns revenue in three ways: We earn an interchange fee (like all debit/credit cards) for facilitating the transaction between our users on vendors. There are also affiliate fees. We want our user’s dollars to go farther. We are negotiating both broad and proprietary relationships with the vendors that our kids spend with each day. Our kids get access to discounts and exclusive access and we get a percentage when the kid does choose to make a purchase. Everyone’s a winner: the kids receive a steeper discount on items that they were already planning to buy, while the merchant gains a new customer.
Lastly, there’s origination. Consumers’ needs change over time and our ability to create the best outcomes for our families depends on focus. It is not Till’s intention to be a kid’s forever bank, just their first bank. With that in mind a Till kid should be treated with the respect that they have earned on our platform for positive financial decisions at launch. When the time comes for kids to leave the house and strike out on their own, Till introduces them to our launch offers market. There, they can receive preferential treatment on loans, credit cards, and adult debit/checking. The adult financial institution gets a better, more valuable client; our consumer receives the advantages they deserve for being of sound financial mind; and Till receives an origination fee.
How important are partnerships to Till’s business plan?
Burton: Till’s merchant and venture partners are interwoven into our business plan to seamlessly offer kids/teens and their families the best resources to develop responsible spending habits. As Till continues to expand their merchant partnerships, kids will have greater access to exclusive offers that they can use on items that they are already planning to purchase. These key partners include top tier brands that kids already shop at such as Adidas, Stadium Goods, and Dick’s Sporting Goods. And, of course, we also believe that the partnerships with our investors are a key component of the continued success of Till. We want our investors to share the same mission of empowering the next generation of economic actors.
What in your background gave you the confidence to tackle this challenge?
Burton: For starters, all three of us co-founders are dads and we’ve all had our share of financial awakenings whether with our kids or ourselves personally. That being said, Till is not just for us, but for the 50 million families that know there is a better way to raise a family; where financial conversations are collaborative not confrontational, and where all of our kids are better prepared for the modern economy.
On the company-building front, the founding team brings together everything needed to build a valued and valuable company. I bring expertise in direct-to-consumer products in a heavily regulated market (Drizly and alcohol delivery), coupled with innovation success in payments rails and merchant partners integration (PayPal and card-linked offers). Tom (Pincince) came to me with this idea after selling his third company. This serial entrepreneur has built a career by finding gaps and opportunities created by market movements and technology changes. And then Brian (Chemel), a multi-time technical founder equipped to marry the best of the old and the new to build a secure and scalable infrastructure backing a delightful and engaging user experience.
Looking back on 2020, what is your biggest professional takeaway?
Burton: We learned to be comfortable with being uncomfortable. COVID-19 impacted people’s businesses differently and when you layer in a fundraise and being an early stage start up, that can either make you or break you. In our case I think it really codified our commitment to our mission and vision and has ultimately put us in the position we are in now.
What can we expect from Till over the balance of 2021 and beyond?
Burton: Our first job is to become an integral part of millions of families’ every day financial activities. We do this by building an engaging platform that delivers both economic and social value. Along the way you will see Till add features that help parents and kids understand where they are on a financial journey and how their decisions can be rewarded by access to opportunities, experiences, and offerings. We are here to serve our users who are already helping us set priorities and guide us to new features and functionality. We are already getting requests for collaborative investing and philanthropic giving features, for example.
We are thinking big because the market is massive– there are currently 50 million pre-banked kids in the U.S. and yet, the average middle-class family in America spends $284,570 per child by age 18. At Till, we believe kids are a major economic force, as $18 billion per year is given by parents to children in the form of an allowance (mostly as cash). We recognize that they are influencers on larger family decisions, such as cars, vacations, etc. By putting the spending power back into the hands of young people, we want to be the driving force that replaces awkward family conversations about money with real actions and experiential learning.
A new challenger bank launched this week with the goal of serving the needs of Latin American consumers in the U.S. Built on Galileo’s payment processing platform, Miami, Florida-based Fortú is dedicated to providing culturally-contextual financial and banking services to the country’s growing Latino and Hispanic populations.
Fortú co-founders Charles Yim and Apoio Doca bring a combination of Big Tech savvy and global neobanking experience to the task of better serving the 22% of Hispanic adults who, according to the Federal Reserve, are underbanked. Yim is a former Amazon Web Services and Google executive with a background in business development and partnerships. Doca helped build a pre-smartphone era digital bank based in Brazil called Lemon Bank that was acquired by Banco do Brasil.
The Fortú team features both first and second generation immigrants with family ties to many of the largest Spanish-speaking countries in Latin America. Together they bring this experience to the cause of helping others negotiate the unique challenges many Latinos and Hispanics face when banking in the U.S.
“Compared to other demographics, Latinos in the U.S. are more likely to live in multigenerational and multilingual households, with a significant percentage needing to send regular cross-border remittances, leading to an over-reliance on non-bank financial services,” Doca said. He added that financial barriers for Latinos and Hispanics can range broadly from a lack of non-English language services to more mundane annoyances like the tendency to randomly truncate Latino names – many of which do not fit within the 24-character embossing standard used by most financial institutions.
Fortú offers a digital bank account that can be opened without needing a social security number; a Mastercard debit card; fast, no-hidden-fee international transfers (courtesy of a partnership with Finovate alum Wise), as well as the ability to deposit cash at more than 100,000 retail locations like CVS and Walmart, and make free cash withdrawals at more than 55,000 Allpoint ATM locations.
“By creating products to answer the needs of Latinos, who are more likely than the general population to be under- and unbanked, Fortú has set itself apart from other neobanks, while transforming financial wellness for the Latino community,” Galileo CEO Clay Wilkes said.
Fortú has raised $5 million in funding from Valar Ventures and other investors. The fintech’s banking services are provided by LendingClub Bank.
Loyalty and rewards may seem like dated technology. After all, the conversation around loyalty and rewards peaked in 2012 when merchant-funded rewards and in-statement offers were the hottest new customer acquisition bait.
Today’s banking environment that focuses on the customer is proving that the technology isn’t all hype, however. Almost a decade after the merchant-funded rewards conversation, there’s still activity going on in the loyalty and rewards space.
As proof, banking app and smart card Curve announced today it is partnering with purchase-based marketing intelligence firm Cardlytics, which will power Curve’s new rewards program. Dubbed Curve Rewards, the app will offer Curve users a range of rewards from Cardlytics’ brand partners, including Pret a Manger, JustEat, FatFace, Harvey Nichols, and Cult Beauty. Two of the merchants piloting Curve’s new program, Harvey Nichols and Cult Beauty, will offer 20% off and 5% off respectively.
Curve Rewards leverages Cardlytics’ purchase intelligence data and will help customers earn while they spend. This data-driven approach ensures that the rewards offered to the consumer are personalized to their spending habits.
“Today’s consumers want a reward scheme that is tailored to how they shop and why they shop,” said Cardlytics’ Head of Bank Partnerships Campbell Shaw. “We’re pleased to have built a reward scheme for Curve that does just that, putting customers back in the driving seat while building loyalty and engagement for Curve.”
The partnership is especially notable for Cardlytics. In the company’s thirteen year history, the partnership with Curve is its first digital-native brand. Up until this point, Cardlytics’ partnerships were primarily with traditional financial institutions, including Lloyds Banking Group, JP Morgan Chase, Wells Fargo, and Santander.
In an era when SPACs are the hip new way to take a company public, corporate expense management technology company Expensify is taking the old fashioned route.
The San Francisco-based fintech announced this week it has submitted an S-1 document– a key step on the road to an initial public offering to the SEC. The S-1 was submitted confidentially. Since Expensify is considered an “emerging growth company,” the contents of the filing do not need to be made public until 21 days prior to the road show for the IPO.
Expensify, which reached profitability at the end of 2018, has not yet determined the size and price range for the proposed IPO.
Founded in 2008, Expensify launched with its flagship receipt-scanning app and a simple motto, “Expense reports that don’t suck!” Since then, the company has gone on to launch a corporate payment card, offer a COVID-friendly virtual travel assistant, andexpand into billpay.
Expensify’s IPO is expected to commence after the completion of the SEC review process, subject to market and other conditions. The company has raised a total of $38.2 million. David Barrett, who Finovate interviewed about the company’s launch, is CEO.
Buy now, pay later (BNPL) company Sezzle is planning to strike while the iron is hot.
The Minnesota-based firm, which is already publicly-listed on the Australian Stock Exchange (ASX), is hoping to capture U.S. investors, now that the BNPL trend has exploded in this continent. Plans for the public listing are still in early stages. Details, such as the timing, price, and use, have not been revealed.
Prompting the plan to list is the company’s recent growth. According to its latest earnings announcement, Sezzle added 400,000 customers and recruited 7,300 active merchants in the first quarter of this year. This boost brings the firm’s total users to 2.6 million and total merchants to 34,000. Not surprisingly, the surge in usage helped increase the company’s first quarter income, which was reported at $22.3 million.
Sezzle initially went public on the ASX in July of 2019, raising $30 million on its first day of trading. The company now has a market cap of over $777 million. This figure is almost 5x higher than it was at the start of 2020. Sezzle’s move to the U.S. public markets follows its competitor, Affirm, which debuted on the Nasdaq at the start of this year.
Sezzle’s BNPL technology allows customers to split their ecommerce purchases into four installments with only 25% down and no fees. The offering is currently available to shoppers in the U.S., Canada, and India, and will soon be offered to residents in Brazil.
In February, Sezzle teamed up with Discover to work with select merchants on Discover’s network to help them provide their customers with additional payment options. Last September, the company launched a virtual payments card that helps customers benefit from Sezzle’s BNPL tech when they make purchases at brick-and-mortar stores.
Sezzle was founded in 2016. Charlie Youakim is CEO.
