Daily news

BOKU Launches New Mobile Payments Network

BOKU Launches New Mobile Payments Network
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Boku, Daily news

Mobile payments company BOKU announced its expansion beyond carrier billing today with the launch of M1ST, a mobile payments network.

M1ST, also known as Mobile First, features 330+ mobile payment methods, including mobile wallets, direct carrier billing, and real-time payments schemes. The payment methods reach 5.7 billion mobile payment accounts across 90 countries.

“Today, we’re launching the M1ST Network to enable global merchants to acquire, monetize, and retain mobile-first consumers,” said BOKU CEO Jon Prideaux. “For merchants to capitalize on the massive potential of mobile-first consumers, they need to accept the payment methods they have and prefer, which are increasingly behind glass screens, not rectangular pieces of plastic.”

The new network, which runs via a single integration, is a solution for the currently fragmented mobile payments space. The technology circumvents many hurdles that come with with payments, including the myriad of tax and legal regulations associated with different geographies.

With M1ST, merchants receive a single, global settlement which eliminates the complexity of local taxes, foreign exchange, and cash repatriation. Additionally, BOKU’s payment licenses enable merchants to accept regulated payments in nearly 50 countries.

BOKU’s new launch comes at a good time in the payments space. As consumers continue transitioning to digital banking and transaction methods, many are becoming increasingly comfortable with digital payments via mobile wallets.

Founded in 2008, BOKU offers digital customer acquisition, customer onboarding, and mobile user authentication tools. The San Francisco-based company currently serves more than 600 global merchant partners and processes $9 billion in payments every year.

Photo by Sander Weeteling on Unsplash

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BECU Teams Up with MX to Help Low-Balance Members Save More

BECU Teams Up with MX to Help Low-Balance Members Save More
By David Penn Posted on
Categories: Alumni News, Daily news, MX

Financial data platform MX announced a collaboration with 1.2 million-member BECU (Boeing Employees Credit Union) to build a new mobile app feature called Quick Save that will help members boost their savings. Piloted last year with BECU members that had low savings account balances, Quick Save helps increase savings via an easy-to-use “slide to save” module that enables frequent, small dollar amount transfers.

“BECU is continually innovating and leveraging technology to improve our members’ experience and empower them financially,” BECU Director of Digital Strategy Liz Wagner explained. “It’s been inspiring to see Quick Save go from a concept to a fully functioning tool that members in this pilot are using to build their savings.”

The pilot project was conducted – and evaluated – in coordination with the Financial Health Network (FHN). Over the course of five months, FHN determined that BECU members using the new solution had transferred more than $2 million into savings accounts, representing an 18% increase in savings balance for the credit union’s low-balance savers, and a 26% increase in money movement via mobile transfers. Wagner credited the “combined power” of all three parties involved for both helping build and measure the effectiveness of the Quick Save offering, adding that the solution would “meaningfully improve our members’ financial health.”

Quick Save is only the latest example of the relationship that the Utah-based fintech and BECU have cultivated. More than five years ago, BECU went live with Helios by MX, a cross-platform framework that enables device- and platform-agnostic, full-featured digital banking.

“When it comes to mobile banking, every option we looked at functioned about the same,” BECU VP of Digital Banking Howie Wu said after the technology had been implemented. “We saw Helios as a chance to stand out and provide a very different experience.” Wu highlighted digital money management, aggregation, budgeting, and alert notifications among the offerings available via the framework – “all features that would enable our members to be financially strong,” Wu explained. Within 18 months of its deployment, BECU reported a 170% increase in billpay, a 56% increase in money transfers, and a 22% increase in check deposits.

Headquartered in Tukwila, Washington (a suburb of Seattle) and founded in 1935, BECU has assets of more than $26 billion. The institution is the largest credit union in Washington State and the fourth largest credit union in the U.S.

“BECU and MX have been aligned partners for years, both resolute in our determination to help strengthen the financial well-being of BECU members and their community,” MX Chief Customer Officer Nate Gardner said. He called Quick Save “yet another example of BECU’s wholehearted commitment to financial strength” as well as delivering “intelligent and personalized money experiences for the hundreds of thousands of members they serve.”

A multiple-time Finovate Best of Show winner, MX returns to the Finovate stage next month in September for FinovateFall in New York.

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Plaid Lands Funding from JP Morgan Private Capital & Amex

Plaid Lands Funding from JP Morgan Private Capital & Amex
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Funding, Plaid

Financial data and infrastructure platform Plaid announced today that it received an undisclosed amount of new funding from J.P. Morgan Private Capital Growth Equity Partners and Amex Ventures, which first invested in the California-based company in 2016. The new round boosts Plaid’s total funding somewhere north of $724 million.

In a statement, the company said that today’s investment will help it “further accelerate efforts to meet rising consumer demand for digital finance; a shift powering the rapid growth of Plaid’s diverse customer ecosystem.”

The funds are an add-on to the company’s $425 million Series D round announced in April. While that investment valued Plaid at $13.4 billion, today’s new funds do not alter the valuation.

This may be J.P. Morgan’s first investment in Plaid, but the two have been data partners since 2018. There is also a storied history between Plaid and J.P. Morgan CEO Jamie Dimon. Earlier this year Dimon cited Plaid as an example of a company that improperly uses client data. However, Dimon did not cite any specific scenarios to back up his accusation.

Plaid was founded in 2013. The company builds APIs to connect consumers, financial institutions, and developers. Plaid also offers a suite of analytics products that provides further insights into transactions. As the rise of open finance in the U.S. has begun to impact firms both in and out of fintech, Plaid is on its way to becoming a household name.

“While we’re still in the early innings of the digital transformation in financial services,” said Plaid CEO Zach Perret, “we’re excited to work with the thousands of banks, fintechs and non-financial institutions in our network to create what’s next.”

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Chime Scores $750 Million to Earn $25 Billion Valuation

Chime Scores $750 Million to Earn $25 Billion Valuation
By David Penn Posted on
Categories: Daily news, Funding

In a round led by Sequoia Capital Global Equities, Chime Financial has raised $750 million in new funding. The investment gives the San Francisco, California-based company a valuation of $25 billion and likely anticipates the firm’s debut as a publicly listed company next year.

Also participating in the Series G round were SoftBank’s Vision Fund 2, along with existing investors Dragoneer Investment Group, General Atlantic, and Tiger Global Management. Chime CEO and co-founder Chris Britt said that the new funding would help support the company’s growth as well as the launch of new services. Chime also introduced a trio of independent directors to its board: Cynt Marshall, CEO of professional basketball team the Dallas Mavericks; Jimmy Dunne, Vice Chairman of investment bank Piper Sandler; and Sue Decker, founder and CEO of community building platform Raftr.

Founded in 2013 by Britt and current Chief Technology Officer Ryan King, Chime gives consumers a digital-first alternative to traditional banks. Chime offers an online checking account with no hidden fees or overdraft charges, and a spending account with a Visa debit card with no minimum balance or monthly fees. The company has an early payday service for customers who choose direct deposit, no fee money transfers, and a “credit builder” program with a secured, Visa-branded credit card to help customers improve their credit scores.

Chime’s banking services are provided courtesy of a partnership with The Bancorp Bank or Stride Bank (issuer of Chime’s Visa Credit Builder Card). With more than eight million account holders – and on track to reach more than 13 million account holders this year – Chime reached EBITDA profitability last year during the COVID-19 pandemic, according to CNBC.

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Paysafe Acquires SafetyPay for $441 Million

Paysafe Acquires SafetyPay for $441 Million
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Mergers & Acquisitions, SafetyPay

In the latest fintech tie-up, Paysafe has acquired SafetyPay. The all-cash transaction marks Paysafe’s 13th acquisition and is expected to close for $441 million in the fourth quarter of this year.

Paysafe aims to leverage Florida-based SafetyPay, which has locations in 16 countries– 11 of which are located in Latin America– to boost its own presence in that geography.

SafetyPay was founded in 2006. The company enables users to make online cash payments, bank transfers, and cross border transactions without a payment card. The company’s network includes more than 380 banks and it works with 180,000 brick-and-mortar locations as cash collection points.

U.K.-based Paysafe was founded in 1996 and offers similar payment services as SafetyPay, including an online cash payments tool. Paysafe also provides digital wallets, standalone and integrated point of sale tools, and a digital marketing marketplace where advertisers can acquire new customers, monetize their traffic and generate revenue through partnerships.

Once the acquisition closes, the SafetyPay team will work as part of Paysafe’s eCash and online banking solutions group. SafetyPay CEO Gustavo Ruiz Moya will become CEO of eCash for Latin America and Global Head of Open Banking.

Paysafe’s previous acquisitions have greatly increased the breadth of its services. The company’s brands include Income Access, Paysafecard, Paysafecash, Neteller, Petroleum Card Services, and Skrill. Among Paysafe’s clients are MindBody, RentMoola, Policy Expert, and Amilia.

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Acquisitions, Partnerships, and Pivots: Getting In On the Buy Now Pay Later Revolution

Acquisitions, Partnerships, and Pivots: Getting In On the Buy Now Pay Later Revolution
By David Penn Posted on
Categories: Daily news, List series

From partnership to acquisition, the Buy Now Pay Later revolution shows few signs, if any, of abating any time soon.

Apple, one of the Big Tech companies that has been aggressive in its expansion into fintech and financial services, recently announced that it is teaming up with BNPL company Affirm Holdings to offer new, interest-free financing options for qualifying Apple customers in Canada. The new program enables consumers to finance iPhone purchases over a 24-month period and iPad and Mac purchases over a 12-month period, both with 0% APR.

The new initiative comes a month after Apple announced that it was teaming up with Goldman Sachs to help introduce its own Buy Now Pay Later service – ostensibly to rival companies like the aforementioned Affirm. The offering will reportedly be called Apple Pay Later.

And filed in the “if you can’t beat ’em, buy ’em” folder is the news from London, U.K.-based Buy Now Pay Later company Zilch. The firm agreed this week to acquire San Francisco, California-based debt funding platform Neptune Financial as part of setting up shop in the U.S. “We’ve been exploring growth options in the U.S. for some time and following the additional funding,” Zilch founder and CEO Philip Belamant said. “Now was the perfect time to take another meaningful step towards our U.S. launch.”

Zilch’s acquisition news comes less than a month after the company secured $110 million as part of an extension of its Series B round. One of the first Buy Now Pay Later firms in the U.K. (founded in 2018), Zilch enables consumers to pay for purchases using their virtual Zilch card by splitting their transaction into four, interest-free payments over a six week period. The company has raised more than $200 million and boasts 150,000 new sign-ups a month for its BNPL services.

One of the more interesting pivots in the BNPL space of late was an internal one as Canada’s Scotiabank announced that it will convert its credit card repayments into BNPL plans. The new arrangement will give cardholders the ability to pay off their debt balances in fixed installments over three-, six-, or 12-month periods.

“Our customers told us that they’re looking for more options to help them manage their finances,” Scotiabank SVP for Credit Cards and Lending Brett Mooney explained. “This new credit card feature offers our customers more flexibility in how they pay for purchases, in addition to the convenience, rewards and lifestyle benefits that our credit cards already provide.”

The new service is called Scotia SelectPay and can be accessed via the Scotia mobile banking app as well as online. Purchases of more than $100 are eligible for the new financing option, which requires no additional credit check or application.

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RightCapital Launches Dynamic Retirement Spending Strategies

RightCapital Launches Dynamic Retirement Spending Strategies
By David Penn Posted on
Categories: Alumni News, Alumni profile, Daily news, RightCapital

Financial planning software company RightCapital unveiled new dynamic retirement spending strategies on its platform this week. The new offering gives investors the ability to better plan their finances once their working days are done.

“The industry has been using a rather simple retirement expense approach in the financial planning process for many years,” RightCapital CEO Shuang Chen said. “The ability to offer multiple options for retirement spending within our comprehensive planning tool is a significant step forward.”

Traditionally, financial planners have relied on an inflation-adjusted retirement spending model which focuses on a single input – the rising cost of living – to anticipate an increase in retirement spending each year. One criticism of this approach is that it does not account for changes in an individual’s portfolio that might significantly affect how much they are able to spend in retirement. RightCapital’s new offering factors in changes in portfolio value, reducing retirement spending projections when the portfolio loses value and giving investors the option to spend more in retirement should their portfolio significantly increase in value. The two dynamic strategies – referred to as guardrail and floor and ceiling – enable retirement spending to adjust in sync with portfolio performance and investment strategy parameters rather than being limited to tracking the rate of inflation.

Dynamic strategies such as those now available on the RightCapital platform more accurately reflect how individuals respond to changes in their investments in the real world. As Michael Kitces, Chief Financial Planning Nerd for Kitces.com and Head of Planning Strategy for Buckingham Wealth Partners explained, “as advisors, we cannot eliminate the uncertainty of markets themselves, but tools like RightCapital’s dynamic spending can help eliminate the uncertainty for clients of what they’d have to do in response to those market events, facilitating better client conversations about how to keep their retirement on track.”

Other features of RightCapital’s dynamic retirement spending strategies include the ability to customize spending levels by age, anticipating a higher level of spending early in the investor’s retirement life and tapering off as the investor ages. The strategies can also incorporate changes in healthcare expenditures over the course of the investor’s retirement, as well.

Founded in 2015 and headquartered in Shelton, Connecticut, RightCapital demonstrated its technology most recently at FinovateSpring in 2019. At the conference, the RightCapital team demonstrated the company’s API/Enterprise solution, which gives financial advisors the ability to offer their clients access to custom applications ranging from PFM to account aggregation to secure document sharing. In June, RightCapital announced that it would “enhance (its) integration” with partner Riskalyze, a specialist in risk alignment and portfolio analytics. Also that month, RightCapital and a coalition of fintechs including fellow Finovate alum Betterment launched the RIA Tech Suite to provide financial advisors with services and tools to automate back-office operations.

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Banking-as-a-Service Innovator NYMBUS Secures $3 Million in New Funding

Banking-as-a-Service Innovator NYMBUS Secures $3 Million in New Funding
By David Penn Posted on
Categories: Alumni News, Daily news, Funding, NYMBUS

In a round led by OFG Ventures – a subsidiary of OFG Bancorp – bank technology solution provider NYMBUS has secured $3 million in new funding.

“Our mission has remained steadfast to help financial institutions of any size succeed with impactful, intentional innovation,” Nymbus CEO and Chairman Jeffery Kendall said. “OFG Ventures’ investment is an added vote-of-confidence to the value our strategy brings to an industry widely in need of immediate and sustainable business growth opportunities.”

Most recently demonstrating its technology two years ago at FinovateFall, banking-as-a-service innovator Nymbus provides financial institutions with both the technical and operational tools necessary to digitally transform their businesses. The company’s solutions – ranging from its flagship SmartCore, SmartDigital, and SmartPayments offerings to its full-service, standalone digital banking alternative SmartLaunch – give banks, credit unions, and other financial services-based companies greater ability to streamline processes and offer new digital services – without requiring a major core conversion or significant additional human resources.

This week’s investment is only the latest infusion of capital the Miami Beach, Florida-based fintech has received this year. The company picked up $15 million in funding from private equity firm Financial Services Capital this spring and, in February, Nymbus announced a $53 million Series C round led by Insight Partners. The company’s total funding now stands at more than $121 million, according to Crunchbase.

Nymbus has been one of the busier banking-as-a-service innovators of late, partnering with a variety of fintechs and financial institutions in the past year. These partnerships have included collaborations with fellow Finovate alums like Plaid and Segmint, credit unions and challenger banks like VyStar CU and PeoplesBank’s ZYNLO Bank, as well as with innovators in open finance and cryptocurrencies like Red Hat and NYDIG. The company also launched a new credit union service organization (CUSO) in March, Nymbus CUSO, to help credit unions take better advantage of fintech offerings that can enable them to create new revenue opportunities and boost engagement with their members.

“Our CUSO signifies a commitment to credit unions by providing strategic partnerships and flexible technology that will create sustainable growth and loyal members,” Kendall said when the new organization was introduced earlier this year. “For those wanting to innovate, Nymbus CUSO moves past traditional vendor thinking to create supportive structures for credit unions ready to grow and reach new niche markets.”

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FintechOS Raises $10 Million to Help Banks Deliver on Financial Inclusion

FintechOS Raises $10 Million to Help Banks Deliver on Financial Inclusion
By David Penn Posted on
Categories: Alumni News, Daily news, Fintech OS, Funding

London-based financial services technology provider FintechOS secured $10 million in funding from the IFC, a member of the World Bank Group. The investment is part of the company’s $60 million Series B round, announced in April, and will support FintechOS’ goals of promoting financial inclusion by helping FIs expand access to financial services to un- and underbanked communities.

Many fintechs talk the financial inclusion talk. But even those companies committed to serving overlooked individuals and communities, often discover that actually “walking the walk” on financial inclusion can be more difficult than it seems at first. Speaking to this conundrum, FintechOS co-founder and CEO Teodor Blidarus said, “today financial technology is too often an inhibitor rather than an enabler of inclusion. Financial institutions both large and small simply don’t have the right tools at the right price point to meet market demands.” Blidarus highlighted enabling technologies like low-code, but lamented that these solutions remain under-utilized. “And this impacts those at the bottom of the (financial) pyramid most acutely,” he added.

For financial institutions eager to undergo digital transformation, FintechOS offers an alternative to what it calls “painful rip-and-replace” approaches to the transformation journey. Instead, FintechOS provides a low-code, plug and play strategy that enables banks and insurance firms to take advantage of digital end-to-end services, automated processes, and personalized, customer-centric solutions “in weeks, not months.”

FintechOS made its Finovate debut in 2018, demonstrating its platform at FinovateEurope in London. More recently, the company released its Configuration Management update, which boosts FintechOS’ scalability and helps pave the way for full Git integration. Git is a change-tracking software that helps developers collaborate during the source code writing process. The technology enables distributed teams to write code, test new functionalities, and securely deploy new versions.

“Configuration Management will make life easier for developers and streamline the wider operation of the FintechOS platform,” Blidarus explained. He added that full Git integration “will help our clients self-serve and customize their enterprise-grade solutions based on our technology.”

Recognized last month as the 2021 Microsoft Romania Partner of the Year, FintechOS includes Reliance Bank, Raiffeisen Bank, Societe General, and Vienna Insurance Group among its more than 40 partners around the world. This spring, the company’s founders, who hail from Romania, became the first Romanians to join Endeavor’s global community supporting “high-impact entrepreneurs.”

“For the Romanian entrepreneurial ecosystem, the selection of FintechOS in the Endeavor Network is a confirmation of the value and the huge development potential of Romanian companies in a truly global setting,” Endeavor Romania board chair Marius Stefan said. “We are eager to discover together other innovative companies and other entrepreneurs as focused and enthusiastic as (co-founders) Teodor and Sergiu (Negut) and enhance their development with the help of Endeavor.”

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CuneXus Inks Pact with Origence to Streamline Digital Lending

CuneXus Inks Pact with Origence to Streamline Digital Lending
By David Penn Posted on
Categories: Alumni News, CUneXus, CUneXus Solutions, Daily news

A strategic partnership between digital lending solution provider CuneXus and lending technology company Origence will give more than 1,100 credit unions the ability to offer their members access to personalized, pre-approved financing offers.

“We are focused on changing the way credit unions interact with their members, and this means tearing down old, and painful banking experiences” CuneXus co-founder and President Dave Buerger said. “We’re empowering people with unrivaled transparency and convenience, and this partnership with Origence makes that easily accessible to many more credit unions and consumers. Together we can provide the modern seamless lending experience that members deserve, one that equips them for financial excellence.”

The partnership allows credit unions to access CuneXus’ digital storefront, which leverages a proactive, “Perpetual Approval” approach that continuously analyzes hundreds of internal and external data points to ensure that qualified borrowers can get personalized loan offers, while simultaneously helping keep the credit union “top of mind” whenever one of its members has expressed an interest in securing financing. The methodology exchanges the typical credit application process for an ongoing automated credit approval that make the financing process less complicated for credit union members.

VP of Strategic Alliances at Origence, Aleks Bogoeski, said that the partnership with CuneXus comes at an opportune moment as consumer behavior and spending begins to rebound in the wake of COVID-19. “Our partnership with CuneXus provides a timely opportunity for credit unions to implement a dynamic digital experience that further simplifies the lending process, as member spending returns to a normal, post-pandemic pace,” Bogoeski said. “We are happy to have partnered with CuneXus to bring this service to our credit unions.”

Founded in 2011 and headquartered in Santa Rosa, California, CuneXus made its Finovate debut at FinovateSpring 2014. In the years since, the company has grown to serve more than 145 of the biggest lenders in the U.S. with its digital storefront, helping these institutions increase wallet share, generate branch revenue, and grow non-interest income. CuneXus clients represent more than $400 billion in combined assets and serve 20 million customers and members.

CuneXus was acquired by CUNA Mutual Group in the fall of last year. Announcing the move, CUNA Mutual president and CEO Robert N. Trunzo highlighted CuneXus’ “growth trajectory” – as well as its expertise and products – as features that would enhance CUNA Mutual Group’s opportunity for growth. “We are continuing our journey into a more diverse, digital-first world,” Trunzo said. “Our company is committed to using technology to enhance consumers’ access to financial solutions that work for them and create a more equitable financial system and society. This is a top priority for all of our core businesses.”

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Behalf Raises $100 Million Debt Facility for B2B BNPL Offering

Behalf Raises $100 Million Debt Facility for B2B BNPL Offering
By David Penn Posted on
Categories: Alumni News, Blend, Daily news, Funding

Now more small businesses can get in on the Buy Now Pay Later game just like retail consumers.

Courtesy of a new $100 million debt facility, small business financing company Behalf will be able to make its In-Purchase Financing offering available to a broader range of B2B merchants and their small business customers. In-Purchase Financing gives B2B merchants the same sort of Buy Now Pay Later benefits that retail consumers enjoy, and includes a range of features designed especially to meet the needs of B2B commerce. The facility was provided by funds managed by Ares Management Corporation.

Behalf also announced $19 million in new venture financing led by MissionOG, Viola Growth, Viola Credit, and Vintage Investment Partners. Migdal Insurance and La Maison Partners also participated in the round. Behalf’s total funding now stands at more than $250 million.

Describing the B2B e-commerce market as more than ready for transformation, Behalf CEO Rob Rosenblatt said that in-purchase financing gives merchants the opportunity to source new revenues. The offering also gives small and medium-sized businesses access to an affordable financing alternative.

“Even as the U.S. economy is improving, SMBs continue to seek financial assistance to purchase critical supplies, inventory and equipment,” Rosenblatt explained. “Oftentimes they lack the requisite spend capacity on their personal or business credit cards. By offering In-Purchase Financing with flexible terms, B2B merchants can increase average order size by as much as 50-80 percent while reducing their risk, improving cash flow and driving operational efficiencies,” he said.

Among the features included in Behalf’s In-Purchase Financing solution are:

  • Seamless checkout to improve CX and customer loyalty
  • Easy integration with existing point-of-sale systems
  • Advanced underwriting and scoring models to handle the complexity and risk of SME lending

The solution scales to enable merchants to serve a range of business customers, from small to large, and supports financing for transactions of “significantly greater” average order value relative to consumer financing options.

“We think there is a great market opportunity for a B2B offering targeting the more complex, real-time financing needs of SMBs,” Ares Credit Group Partner Jeffrey Kramer said. “We are excited to provide a debt facility that will help support the company to achieve its growth objectives.”

Founded in 2011, Behalf made its Finovate debut at FinovateFall three years later. Since then, the company has enabled its B2B merchant partners to achieve an 83% increase in Average Order Value (AOV), an 80% gain in purchase frequency, and 44% growth in sales revenue.

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StackSource Brings Innovation to Commercial Real Estate Lending

StackSource Brings Innovation to Commercial Real Estate Lending
By David Penn Posted on
Categories: CEO Interview, Daily news

Fintech’s innovations in the real estate market for homebuyers have prompted the emergence of an entire new kind of fintech company, the mortgagetech, that specializes in leveraging technology to improve the homebuying experience for all parties involved.

Less discussed are the ways that technology is helping those involved in the commercial end of the real estate market do their jobs better and more efficiently. To this end, we caught up with Tim Milazzo, co-founder and CEO of StackSource, a company that connects borrowers and lenders seeking commercial real estate financing.

Headquartered in New York City and founded in 2015, StackSource recently made fintech headlines with the appointment of commercial real estate industry veteran Richard Caldwell as EVP – Head of Originations. We talked with Milazzo via email about his company, how it serves the CRE industry, and the importance of blending technical innovation with human experience and talent.

What problem does your technology solve and who does it solve it for? 

Tim Milazzo: StackSource simplifies the process of finding the best commercial mortgage for a given property investment by tracking the loan programs of hundreds of active lenders and offering borrowers a transparent experience.

Commercial mortgage brokerage has traditionally been a local, relationship-driven game. If you’re buying a home in 2021, you can know your rate and get pre-approved for a mortgage in minutes. But in commercial real estate, finding the right financing is only unlocked by developing relationships with the right set of lenders based on dozens of variables from the property’s asset type, location, income, and physical characteristics, as well as the borrower’s track record, financial strength, and business plan. We’ve streamlined that process of finding and connecting with suitable lenders to boost the investors’ financial returns with the right debt.

What in your background gave you the confidence to tackle this challenge? 

Milazzo: My first exposure to commercial real estate was through family ties. My father was a successful commercial real estate broker in New York City, so I’d hear stories about office building negotiations at the dinner table growing up. While I went to college to study Finance, I interned at a large real estate firm, where I was known as the smart spreadsheet kid that sat in the corner. Honestly, I didn’t come away with a big interest in the industry at that time; my eye was on big tech companies. I went on to work in advertising technology, first with Google and later with Facebook. I came back to commercial real estate because I found an area where online technology could deliver a superior value proposition: helping investors find the best financing for a commercial property investment without the need to track hundreds of lenders’ programs themselves.

What do you think is the most misunderstood aspect of investing in commercial real estate? 

Milazzo: Many old-school brokers are quick to point out that commercial real estate is a “relationship business.” And that’s true. But what’s missed is the fact that it’s also an information business. If you can leverage the correct information, you can scale beyond your local relationships in the capital markets, which is a significant advantage.

You recently launched a new Chrome browser extension to make the discovery process easier. Can you tell us more about this feature?

Milazzo: We’ve been delivering competitive financing quotes to real estate investor clients for a couple of years now. Still, we wanted to go the extra mile in the name of transparency and efficiency. We came up with a tool that draws on our pool of loan quote data to allow real estate investors to apply financing quotes to any commercial property listing across the web and analyze potential investment opportunities. Sourcing acquisition opportunities is a competitive process, and this tool can add speed and accuracy to acquisition analysis. It’s completely free and open, with no obligation to use our financing service.

One interesting aspect of StackSource is how you combine a technology platform with a fleet of experienced industry veterans. How do you see the balance between enabling technologies and “the human touch”? 

Milazzo: The commercial mortgage space is not nearly as commoditized as residential mortgages. Even in the most “simple” commercial mortgage lending scenarios, where we can go as far as automating an instant soft quote, these are major financial investments, and borrowers want the guidance of an experienced Capital Advisor from submission to close.

How did COVID-19 impact your business and customers?

Milazzo: We doubled our market share in 2020 as many investors were looking for answers on how to secure the best financing for their real estate investment properties. People were staying home, and our online process is easy to access from anywhere, which was especially attractive. At the same time, funding from many local banks was pulled back in response to the pandemic. We even saw many traditional financing sources get distracted by things like issuing PPP loans, while we kept our focus on the long-term and stayed exclusively focused on commercial real estate.

What can we expect from StackSource over the balance of 2021? 

Milazzo: We just raised our first proper fundraising round for the company in Q2, allowing us to push the limits of how efficient the commercial mortgage origination process can become. Think automated quotes on specific qualified properties and integrating additional data sources seamlessly into the investment and financing process.

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