In a round led by Santander InnoVentures, Upgrade, the San Francisco, California-based neobank co-launched by LendingClub founder Renaud Laplanche, has raised $40 million in new funding. The Series D round takes the company’s total funding to $202 million, and gives the neobank a valuation of $1 billion.

“We are thrilled to welcome Santander InnoVentures as a new shareholder,” said Laplanche, who is Upgrade’s CEO. “Our strategy of partnering with banks and credit unions of all sizes is delivering tremendous value to our partners and customers, and we are delighted to add one of the world’s largest banks to our partner roster.”

Also participating in the Series D were new investors Ventura Capital and Uncorrelated Ventures, as well as existing investors Union Square Ventures, Ribbit, Vy Capital, and Silicon Valley Bank.

Opening its doors in 2017, Upgrade specializes in providing financing for mainstream consumers via its card and personal loan products. The company, which also provides free credit monitoring and financial education tools, has provided more than $3 billion in consumer credit via its solutions. More than ten million consumers have applied for either the company’s Upgrade card or loan.

“We’re excited to support Upgrade in their next stage of growth,” senior advisor at Santander InnoVentures Chris Gottschalk said. “Upgrade is building a neobank with credit at its heart, which we believe is a smart strategy as credit represents 70% of banking revenue globally and is often the main reason customers seek banking services.”

In addition to helping drive growth at the company, the funding will support the upcoming launch of a new mobile banking product, the Upgrade Account. Named “Best Place to Work in the Bay Area” by the San Francisco Business Times and Silicon Valley Business Journal for three years in a row, Upgrade launched its first contactless-enabled Upgrade Card – as well as a digital form of the card facilitate mobile payments via Apple Pay and Google Pay – in April.

Upgrade’s personal credit lines and personal loans are issued by partner Cross River Bank. The firm’s Upgrade Card is issued by Sutton Bank, via a license from Visa.

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Photo by Quintin Gellar from Pexels

Facebook-owned messaging giant WhatsApp announced today that users in Brazil can now send payments within its app.

The digital payments capabilities, powered by Facebook Pay, will allow users to send P2P payments to friends for no fee. The app also facilitates payments between WhatsApp users and businesses, but charges the business a 3.99% transaction fee.

With 120 million monthly active WhatsApp users, Brazil seems to have cut in line in front of India, which counts 400 million monthly active WhatsApp users, for the payments service. However, according to TechCrunch, WhatsApp has had difficulty sorting through regulations in India.

In the way of security, WhatsApp requires a 6-digit PIN or fingerprint to authenticate transactions. WhatsApp is working with Banco do Brasil, Nubank, and Sicredi to accept Visa and Mastercard debit or credit cards. Latin America’s largest payment systems company, Cielo, was chosen to be the payments processor.

There is no word on further international expansion for WhatsApp’s in-app payment capabilities.

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Photo by Jason Leung on Unsplash

Symbiotic relationships, like the way bees help flowers pollinate while harvesting nectar to feed their colonies, can be found all over nature. They are also quite common in fintech.

The latest example of fintech symbiosis is today’s partnership between Amazon and Goldman Sachs. CNN reported this morning that Amazon revealed a lending program for U.S.-based small businesses that sell on its platform.

Goldman’s Marcus will offer revolving credit lines of up to $1 million. The loans will carry an annual interest rate of 6.99% to 20.99%. Minimum payments are due on a two-week cycle and if borrowers don’t use at least 30% of the funds, they are charged a maintenance fee.

Interestingly, the new offering will compete with Amazon’s existing small business lending product, which it launched with Bank of America in early 2018. According to CNN, last year Amazon loaned more than $1 billion to 14,000 sellers.

Goldman, which will service the lines of credit, will underwrite the loans using merchant data collected by Amazon (if the seller agrees to share their data). As CNN pointed out, this is a rare move by Amazon, which, “has kept a tight rein on its small business lending program, using algorithms and closely guarded sales data to determine who could use a loan.”

The data sharing doesn’t extend past lending opportunities, however. Goldman will only use seller data for lines of credit and will not use it to cross-sell other products or services. Additionally, Amazon won’t be able to access the data that Goldman collects from prospective borrowers.

The move makes Amazon the latest third party on Goldman’s list of partners for its Marcus brand, which caters to a younger and generally less wealthy client base. Furthermore, the partnership accelerates the bank’s mission to make Marcus a banking-as-a-service provider for third parties. Marcus’ existing partners include Apple, JetBlue, Intuit, and AARP.

Photo by Hoover Tung on Unsplash

In a round led by Gallatin Point Capital and The Rise Fund, mobile banking startup Varo Money has secured $241 million in new funding. The investment in the San Francisco, California-based fintech, which featured participation from HarbourVest and Progressive Insurance, takes Varo’s total capital to $419.4 million.

The funding comes at a time when Varo Money is closing in on the opportunity to be the first, fully-digital U.S. bank to earn a national charter – as early as this summer. The charter would enable the company to add credit cards, loans, and other savings products to its offerings.

This most recent investment will help Varo further develop its mobile banking solutions. In a statement, Varo Money co-founder Colin Walsh underscored growing consumer preferences in favor of digital banking services, and said that the company, founded in 2015, has been “laser-focused” on becoming the first fully digital bank in order to take advantage of this kind of opportunity from the start.

The investment also will accelerate the company’s goal of bringing better banking services to the underbanked. “Varo was founded first and foremost to make a powerful impact on systemic financial inequality in communities across the country,” Walsh said. “As the first fully digital bank, Varo will bring our mission of financial inclusion to life and create more financially resilient – and thus healthier and stronger – communities. This new investment will enable us to complete the chartering process and leverage our modern banking technology to build on our track record of innovation and inclusion,” he added.

Varo Money offers a high-yield savings account with an annual percentage yield of up to 2.8% for five-digit savers, as well as a Varo Visa Debit Card. The company also offers an online bank account with no overdraft or monthly fees charged, and no minimum balance required. Accountholders can authorize direct deposit with their Varo accounts to get their paychecks up to two days early, and can send money instantly and without fees to other Varo accounts. Deposits are FDIC insured to $250,000 courtesy of Varo’s partnership with The Bancorp Bank, and accountholders have access to fee-free ATM withdrawals at more than 55,000 ATMs worldwide.