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Revolut’s Newest Acquisition Accelerates its Move into India

Revolut’s Newest Acquisition Accelerates its Move into India
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions, Revolut
  • Revolut has acquired India-based Arvog Forex. Terms of the deal were not disclosed.
  • The purchase will help Revolut launch services in India in the latter half of this year.
  • Arvog Forex has more than 20 branches across India and served more than 15,000 customers last year.

Global financial services innovator Revolut recently acquired Arvog Forex to deepen its roots into India, a region with a population of 1.3 billion and ripe for fintech disruption.

Arvog Forex, an international money transfer and currency exchange company, is headquartered in Mumbai. With more than 20 branches across India, the company served over 15,000 people with its remittances and other forex services last year.

Revolut, which plans to invest $25 million into the Indian market in the coming years, expects the purchase will strengthen its foundation in India. The company initiated its India expansion plans last April after hiring Paroma Chatterjee, a former Flipkart executive, to lead its India operations. Under Chatterjee’s leadership, Revolut plans to launch bespoke financial products that serve the unique needs of Indian consumers.

The company is aiming to launch services in India in the latter half of this year. The Arvog Forex acquisition should streamline this, helping Revolut offer remittances and multi-currency accounts to Indian customers.

Chatterjee calls the buy a “first step” towards the company’s aspiration to usher in a “digital financial revolution” in India. “Our significant investment plans, this acquisition, and the quality of the team we are putting together reflect our intention to rapidly roll out these innovative products and services. India is a key region in our global expansion plan and this acquisition is testament to the rapid strides we want to make here. It is an incredible time to be a fintech company in India and we plan to make the best of this opportunity,” she said.

U.K.-based Revolut was founded in 2015 and has already expanded into other Asia-based countries, including Japan and Singapore, but has yet to enter into China, a market that will prove to be highly competitive. On the other side of the globe in North America, Revolut has applied for a bank charter in the U.S., but withdrew its operations in Canada last March. The fintech plans to reenter the region later this year.

Photo by Aditya Siva on Unsplash

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Madison Dearborn Buys MoneyGram in $1.8 Billion Deal

Madison Dearborn Buys MoneyGram in $1.8 Billion Deal
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions, MoneyGram
  • Madison Dearborn Partners has agreed to acquire MoneyGram in a $1.8 billion deal.
  • The deal will offer shareholders $11 per share and will make MoneyGram a privately-held company.
  • MoneyGram anticipates the acquisition will help it advance digital growth and compete against smaller fintechs.

MoneyGram, an 82-year-old fintech, announced today it has agreed to be acquired by private equity investment firm Madison Dearborn Partners (MDP) in a $1.8 billion deal. The transaction is expected to close in the fourth quarter of this year.

When the deal closes, MoneyGram shareholders will receive $11 per share. In addition, MoneyGram, which is currently listed publicly on the NASDAQ under the ticker MGI, will no longer be listed on a public exchange. Logistically, MoneyGram will continue to operate under its own brand. Company CEO Alex Holmes and the existing leadership team will continue to lead MoneyGram from the company’s headquarters in Dallas, Texas to continue to serve its 150 million customers.

Holmes anticipates the deal will not only deliver value to shareholders, but will also help MoneyGram as it seeks to advance its digital growth. “MoneyGram has undergone a rapid transformation over the last several years to expand our digital capabilities and adapt to the evolving needs of our customers. By partnering with MDP and becoming a private company, we will have greater opportunities to innovate and transform MoneyGram to lead the industry in cross-border payment technology and deliver a more expansive set of digital offerings, while leveraging our global platform for new customers and use cases.”

The move will place MoneyGram in a better position to compete with the onslaught of fintechs in the cross-border payments arena. And in today’s increasingly decentralized economy, this competition goes beyond cross-border payments companies of the last decade such as Azimo, Wise, Visa’s CurrencyCloud, and Payoneer. Looking ahead, MoneyGram will need to deepen its crypto roots.

The Dallas-based company dipped its toe in the crypto waters in 2018 when it initiated a partnership with Ripple to leverage xRapid for remittance payments. And last fall, MoneyGram began collaborating with Stellar to enable consumers using Circle’s USDC stablecoin to receive cash funding and payout in local currency.

“We are looking forward to applying our substantial experience growing digital businesses and deep payments knowledge to help MoneyGram further strengthen its market-leading cross-border capabilities and enhance its digital platform,” said MDP’s Managing Director Vahe Dombalagian.

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Marqeta Teams Up with Plaid to Simplify ACH Transfers

Marqeta Teams Up with Plaid to Simplify ACH Transfers
By David Penn Posted on
Categories: Alumni News, Daily news, Marqeta, Plaid
  • Marqeta and Plaid have teamed up to simplify and streamline the ACH transfer process to enable faster funding of financial accounts.
  • The collaboration is designed to provide both seamless account funding as well as additional security during data transfer.
  • Both Marqeta and Plaid made their Finovate debuts as part of Finovate’s developer conference series, FinDEVr.

A partnership between a pair of Finovate alums – card-issuing platform Marqeta and financial data network Plaid – will simplify ACH transfers to make it easier for customers to authenticate and fund their accounts.

Per the agreement, Marqeta customer cardholders will be able to transfer money seamlessly between customers and external accounts, as well as verify and link to external accounts faster. The company’s customers also will be able to keep cardholders informed on the status of fund transfers via real-time notifications, and better manage issues ranging from initiations to cancellations to return. Enhanced security is another benefit of the partnership. Marqeta customers no longer will need to store sensitive information from cardholders’ external bank accounts – relying instead on tokens while Plaid and Marqeta exchange necessary bank account information in the background.

“We’re making it as simple as possible for consumers to access their bank information from one application, and reduce the time it takes to fund and begin using their account,” Marqeta Chief Operating Officer Vidya Peters explained. “Through our Plaid integration, developers building on Marqeta can authenticate users’ bank accounts without the complexity and extra time associated with traditional ACH processing, creating an overall more seamless experience.”

Founded in 2010 and headquartered in Oakland, California, Marqeta is an alum of our developers conference FinDEVr Silicon Valley. The company’s card issuing platform provides businesses with the infrastructure, technology, and tools to build and manage their own payment programs. Last month, Marqeta announced that it has secured certification to operate in three countries in Southeast Asia – Singapore, Thailand, and the Philippines – which means the company’s platform is now enabled in 39 countries around the world. Marqeta announced that, with its further expansion into the Asia Pacific (the company is also active in Australia and New Zealand), it will establish an Asia Pacific regional hub in Singapore later this year.

Also a veteran of our developers conference, Plaid began 2022 with the launch of its data privacy solution, Plaid Portal. The new privacy tool is designed for customers who have used Plaid to connect their financial accounts to apps and services in the U.S. Plaid Portal allows account holders to see which apps have accessed their financial data and to control where the data is shared. The company calls the new offering “one of many tools” under development to give customers both greater visibility into and control over how their data is shared. Ideally, this additional transparency will help allay data privacy concerns and provide users with greater confidence when it comes to taking advantage of increasingly open nature of the modern digital financial ecosystem.

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Thought Machine Secures $54 Million Investment from Italian Bank Intesa Sanpaolo

Thought Machine Secures $54 Million Investment from Italian Bank Intesa Sanpaolo
By David Penn Posted on
Categories: Alumni News, Daily news, Funding, Thought Machine
  • Core banking technology innovator Thought Machine has signed a partnership with Intesa Sanpaolo, Italy’s largest bank by total assets.
  • As part of the partnership, the bank has invested $54 million (£40 million) in the U.K.-based fintech.
  • The partnership with Intesa Sanpaolo is the third bank partnership Thought Machine has secured this year.

U.K. based core banking technology company Thought Machine inked its third bank partnership of 2022 this week, teaming up with Italian Bank Intesa Sanpaolo. The collaboration will bring Thought Machine’s core banking engine, Vault, to the Italian financial institution, who will use the technology to power its new digital banking platform Isybank. The new platform will be geared initially toward the bank’s four million mass-market customers in Italy. Beyond that, Intesa Sanpaolo plans to further deploy Thought Machine’s core banking technology into its infrastructure more broadly, swapping out mainframe-based core technology in favor of the cloud.

Pointing to the digital preferences of its younger clientele, Intesa Sanpaolo CEO Carlo Messina said, “this new digital bank will evolve our retail business from incumbent to fintech challenger in the mass market, with the option to expand internationally.”

In addition to the technology partnership, Intesa Sanpaolo announced that it would invest $54 million (£40 million) in the U.K.-based bank technology firm. The funding takes Thought Machine’s total capital to more than $402 million.

“We chose Thought Machine as our partner due to its international standing as a fintech innovator,” Messina added. “We believe so strongly that Thought Machine is the right partners for this transformation that we are also announcing our investment in the company to be a part of its growth story.”

With 13.5 million customers in Italy and 7.1 million customers around the world, Intesa Sanpaolo and its subsidiaries are active in 12 countries in Central and Eastern Europe, as well as in Egypt. The bank is the largest in Italy by total assets and one of the 30 biggest banks in the world.

A Finovate alum since its debut at FinovateEurope in 2018, Thought Machine has sealed partnerships with three banks so far in 2022, including Intesa Sanpaolo. Thought Machine began the year announcing that Al Rajhi Bank Malaysia (ARBM) would leverage its technology to build an Islamic digital bank later this year. ARBM is a subsidiary of Al Rajhi Bank of the Kingdom of Saudi Arabia, the world’s largest Islamic bank by assets. The deployment of Thought Machine’s Vault is part of a multi-year digital transformation project begun last year by ARBM. The bank has credited Vault’s product building functionality for enabling it to create a full suite of Shariah-compliant banking products.

Also this year, Thought Machine announced that U.S. mutual savings bank Mascoma Bank will deploy Vault and migrate its customers to the new technology. A certified B corporation serving customers in the New England states of New Hampshire, Vermont, and Maine, Mascoma Bank will use Vault to both innovate and add new solutions to its product line, as well as provide the institution with a single source of record by housing all of its data in a single location to more easily understand and serve its customers.

“We believe that modern technology is the key to unlocking superior customer service,” Mascoma Bank president and CEO Clay Adams said. “We are proud at Mascoma Bank to be different by design – we are adopting Thought Machine’s modern technology to deliver on our mission of better serving our customers and communities, to offer new products and be a leader in community banking.”

Photo by Lorenzo Pacifico from Pexels

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Self-Directed IRA Platform Alto Partners with Prosper

Self-Directed IRA Platform Alto Partners with Prosper
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Prosper
  • IRA company Alto Solutions is partnering with P2P marketplace Prosper.
  • Under the agreement, Alto’s clients can now invest IRA funds in Prosper’s consumer loans.
  • Prosper has facilitated more than $20 billion in P2P loans to nearly 1.2 million people across America.

Peer-to-peer (P2P) investment marketplace Prosper may likely see a new slough of investors in the coming months. That’s because the California-based company just inked a partnership with self-directed IRA platform Alto Solutions.

Alto users can now invest their IRA funds in loans originated through Prosper’s online marketplace lending platform. Prosper’s alternative investment platform connects people who want to borrow money with individuals and institutions that want to invest in consumer credit. As a result, borrowers are able to secure credit outside of a traditional financial institution and investors can gain diversification along with attractive returns.

“We are extremely proud to partner with Prosper,” said Alto Chief Revenue Officer Tara Fung. “Prosper was the first peer-to-peer consumer lending marketplace in the U.S. and has given everyday Americans a first-of-its-kind investment opportunity to better diversify their portfolios. Thanks to our partnership, Alto investors can now deploy IRA funds to invest in consumer loans.”

Prosper was founded in 2006 and has since facilitated more than $20 billion in P2P loans to nearly 1.2 million people across America. In 2019, the company launched a HELOC tool that BBVA integrated into its website.

Tennessee-based Alto was founded in 2018. The company helps users access alternative investments such as real estate, crypto, startups, and more. Alto’s current investment partners include AngelList, DiversyFund, Eaglebrook Advisors, Fundr, Grayscale, Masterworks, Republic, Vint, and others.

Photo by Beth Macdonald on Unsplash

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Payments Orchestration Platform Spreedly Inks Pact with Stripe

Payments Orchestration Platform Spreedly Inks Pact with Stripe
By David Penn Posted on
Categories: Alumni News, Daily news, Spreedly
  • Spreedly announced an integration that will expand the number of local payment methods available via Stripe.
  • Among the supported payment methods are IDEAL, Bancontact, Giropay, EPS, Alipay, Afterpay / Clearpay, Sofort, and Przelewy24, as well as Apple Pay and Google Pay.
  • Spreedly’s announcement comes in the wake of strong transaction volume growth from its operations in Latin America.

Payments orchestration platform Spreedly and payments processor Stripe have expanded their partnership to enable access to more local payment options. As part of the announcement, Spreedly underscored that its customers will have access to Stripe’s fraud fighting solution, Radar, as well.

“This latest integration allows joint Stripe and Spreedly customers to offer their customers a variety of payment methods and provides access to Radar, helping to manage the fraud risks associated with accepting payments online,” Spreedly Senior Director of Product Andy McHale explained.

By offering customers a broader range of local payment alternatives, merchants are able to reach more customers, bring down transaction costs, and boost conversion rates. Payment orchestration, such as that available from Spreedly, helps provide this flexibility, giving merchants and merchant aggregators the option of not only transacting with a wider variety of gateways and payment services, but also enabling them to test and experiment to find out which services work best for their customers.

First announced in November, access to Stripe’s Radar feature gives Spreedly customers the ability to bring machine learning to bear to detect and block fraud. Radar leverages data across millions of international companies processing billions of payments a year to assign risk scores and block high-risk payments. McHale noted that while many merchants and platforms do integrate fraud fighting solutions, working with companies like Spreedly can provide significant advantages.

“(Integrating) fraud tools and payment gateways via a Payment Orchestration Platform simplifies system complexity by reducing the number of direct vendor integrations and orchestrating them to work together,” McHale said.

This week’s news from Spreedly arrives in the wake of the company’s announcement that European payments company Worldline had joined Spreedly’s Payment Service Provider program. The Durham, North Carolina-based company began the year with news that transaction volume from Latin America had grown by more than 100% year-over-year.

Photo by Gabriel Santos Fotografia from Pexels

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Zip Integrates with Singtel to Bring its BNPL Tools to Singapore

Zip Integrates with Singtel to Bring its BNPL Tools to Singapore
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news
  • Australia BNPL player Zip is partnering with Singapore telecommunications firm Singtel.
  • Singtel is integrating Zip’s Pay Later into its mobile wallet, Dash.
  • Over the next six months, Zip will launch new payment schemes and onboard more than 2,000 new merchants to its existing network of 51,000.

Australian buy now, pay later (BNPL) company Zip is partnering with Singapore’s largest telecommunications firm Singtel this week. Through their collaboration, Zip’s Pay Later service will be available to Singaporeans on Singtel’s Dash app.

The integration provides Dash customers with the option to pay for a purchase in full or to pay over time with Zip. Zip’s Pay Later tool enables users to pay for everyday purchases between $350 and $1,000 in interest-free installments on a flexible schedule.

“Many of our customers want greater choice and control over managing their finances and our partnership with Zip provides just that with an alternative payment method that is transparent and flexible,” said Singtel Head of Financial and Lifestyle Services Gilbert Chuah. “This collaboration adds to Dash’s rapidly growing financial services business and we are working on expanding our suite of financial products and services to meet our customers’ diverse needs.”

Dash is a Singapore-centric mobile wallet that offers users remittance services, insurance and investment products, in-person and online contactless payments, rewards, and deals. By partnering with Dash, which counts one million registered users, Zip will have a running start in Singapore, a new geography for the BNPL company. Zip initiated operations in the South East Asia region after investing in Philippine-based TendoPay, a fellow BNPL player, in May of last year.

Over the next six months, Zip will be rolling out new payment schemes and onboarding more than 2,000 new merchants to its network of 51,000– including Target, North Face, and Wrangler– that have already integrated Zip’s BNPL technology into their checkout flows.

There has been a consistent pulse of news coming from BNPL providers over the past 12 months. Just today, Bloomberg reported that Sweden-based Klarna is looking to raise new funds, while France-based Alma closed $130 million in Series C funding and $109 million in debt financing. Last fall, Marqeta announced it would help banks get in on the action. The firm partnered with Amount to offer a BNPL-as-a-service offering.

Photo by Huy Pham on Unsplash

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Trulioo Acquires Client Onboarding Tool Provider HelloFlow

Trulioo Acquires Client Onboarding Tool Provider HelloFlow
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions, Trulioo
  • Trulioo has acquired HelloFlow, a digital onboarding startup. Financial terms of the deal were not disclosed.
  • HelloFlow’s no-code, drag-and-drop tools “vastly simplify” the onboarding process and will offer efficiencies to Trulioo’s GlobalGateway customers.
  • Trulioo will leverage Denmark-based HelloFlow to help expand its global footprint, specifically in Europe. The company plans to double the size of its team by the end of the year.

Trulioo is making an acquisition today that will boost the digital onboarding aspect of its global identity platform. The company announced it has acquired HelloFlow, a startup that enables businesses to build client onboarding, monitoring, and digital workflow solutions using a no-code, drag-and-drop interface. Financial terms of the deal were not disclosed.

HelloFlow was founded in 2020 by Mikkel Skarnager and Ciprian Florescu who set out to disrupt the onboarding process by creating a digital solution with low barriers to digitalization. They came up with a no-code solution that minimizes coding and developer costs. The Denmark-based company has raised $3.3 million.

“We set out to build a platform that businesses could leverage for digital onboarding regardless of company size, resources, market, or jurisdiction,” said Skarnager. “We’re thrilled to be joining Trulioo and continue the journey of digital innovation and inclusion.”

The purchase combines Trulioo’s GlobalGateway data and identity services network built to verify the identity of both business and individuals with HelloFlow’s suite of orchestration, onboarding workflow, and risk management capabilities. By integrating HelloFlow’s technology, Trulioo will offer a single platform that combines Trulioo’s eIDV, KYB and DocV capabilities with the orchestration solution from HelloFlow. According to the press release, HelloFlow will “vastly simplify” the onboarding process, which will offer efficiencies for Trulioo customers.

“Establishing and securing trust online is a foundational step for all digital activity,” said Trulioo President and CEO Steve Munford. “Our ability to verify both businesses and individuals globally combined with HelloFlow’s advanced orchestration delivers unmatched capabilities and helps us accelerate an end-to-end identity platform that meets the evolving needs of our customers.”

Throughout 2022, the company plans to expand its global footprint. As part of this strategy, Trulioo will leverage HelloFlow’s current locations and operations to support its European expansion. By the end of this year, Trulioo anticipates it will have doubled the size of its team.

This purchase is Trulioo’s second acquisition since it was founded in 2011. Last June, the company raised $394 million in funding, boosting its total funding to almost $475 million and increasing its valuation to $1.75 billion.

For a look at the newest technology coming out of Trulioo, check out the company’s live demo at FinovateEurope next month. Trulioo is a Platinum sponsor of the event, which is taking place in person this year on March 22 and 23 at the Intercontinental O2 in London. Book your ticket today to save.

Photo by Jud Mackrill on Unsplash

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Charitable Giving App Daffy Secures $17.1 Million in Funding

Charitable Giving App Daffy Secures $17.1 Million in Funding
By David Penn Posted on
Categories: Daily news, Funding
  • Charitable giving app Daffy has received $17.1 million in funding.
  • Daffy was co-founded by CEO Adam Nash, former president and CEO of Wealthfront.
  • In the U.S., individuals gave more than $324 billion to charitable organizations in 2020.

Aside, the company behind charitable giving app Daffy, has secured $17.1 million in Series A funding. The round was led by Ribbit Capital and featured participation from XYZ Capital and Coinbase Ventures, along with more than 50 angel investors including Amy Chang and John Lilly. The company will use the funds to help scale Daffy and bring additional product innovations to market to help encourage more people to participate in charitable giving.

“People want to be generous and help those less fortunate than themselves, but we are all busy and life gets in the way,” explained Daffy CEO and co-founder Adam Nash. “My co-founder Alejandro and I believe that all of the innovations that have helped us shop, save, and plan, Daffy can also use to help people make giving a habit.”

Americans are often credited for being among the most generous charitable givers in the world. One study by Giving USA revealed that individuals in the U.S. gave more than $324 billion to charities in 2020. That said, Nash believes there remains a “Generosity Gap” between what Americans give to charities and what they would give if the process were easier. The company cites a study by the Stockholm School of Economics that suggested that something as simple as pre-commitment – agreeing in advance to make a charitable contribution – can boost an individual’s contribution amount by as much as 32%.

To this point, Daffy works by encouraging users to provide a charitable giving goal for the year and asking them to take the “Daffy Pledge” to set aside money on a weekly, monthly, or quarterly basis to reach that goal. As the funds accumulate, Daffy invests the money in one of nine portfolios – rather than having the money sit in low-to-zero interest-bearing cash accounts. When the goal is reached, user can access the funds to make their tax-deductible donation to one of more than 1.5 million U.S. charities available via the Daffy platform. The company said that 40% of its users take advantage of the “Daffy Pledge” option for regular contributions.

Headquartered in San Francisco, California, Daffy takes its name from the acronym DAF, which stands for donor-advised fund. These funds are tax-deductible accounts specifically designed for charitable giving. Assets from cash to stock to cryptocurrencies can be placed in a DAF and donors can take immediate tax deductions on those contributions.

“Daffy takes many of the amazing innovations we’ve seen in fintech to a large new space, charitable giving,” Ribbit Capital Managing Partner Micky Malka said. “Within seconds, you can donate to your favorite causes and charities from anywhere. By building a seamless and habit–forming giving experience, Daffy is not only creating a better way to give, but a better way to live.”

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Apple Launches iPhone Tap-to-Pay as Payment Acceptance Tool for Merchants

Apple Launches iPhone Tap-to-Pay as Payment Acceptance Tool for Merchants
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news
  • Apple launched its Tap to Pay capability enabling merchants to accept payments via iPhone
  • Stripe will be the first payment platform to offer the new Tap to Pay functionality.
  • The new solution will compete with Block’s Square, PayPal’s contactless QR code payment offering, and others

Rumors circulated about the launch of a contactless payment acceptance tool for iPhone a few weeks ago. Today, the news is no longer a rumor; Apple confirmed the details.

The tech giant announced plans to launch Tap to Pay on iPhone, a new capability that lets merchants use their iPhone to accept Apple Pay, contactless payment cards, and other digital wallets by tapping it to their iPhone. The new payment tool will be available as a service. Apple will allow payment platforms and app developers to integrate the new contactless payment capability into their iOS apps for business customers.

“As more and more consumers are tapping to pay with digital wallets and credit cards, Tap to Pay on iPhone will provide businesses with a secure, private, and easy way to accept contactless payments and unlock new checkout experiences using the power, security, and convenience of iPhone,” said Apple’s Vice President of Apple Pay and Apple Wallet Jennifer Bailey. “In collaboration with payment platforms, app developers, and payment networks, we’re making it easier than ever for businesses of all sizes — from solopreneurs to large retailers — to seamlessly accept contactless payments and continue to grow their business.”

Tap to Pay leverages NFC technology to enable customers to pay by holding their iPhone, Apple Watch, contactless credit or debit card, or other digital wallet near the merchant’s iPhone, to complete a purchase in person. Once the technology becomes available, merchants simply need to unlock the capability on their iPhone; no additional hardware is necessary.

Stripe will be the first payment platform to offer Tap to Pay. The fintech will offer the payment technology to its merchant customers via its new Shopify app. Additional payment platforms will be added later this year. “Whether you’re a salesperson at an internet-first retailer or an individual entrepreneur, you can soon accept contactless payments on a device that’s already in your pocket: your iPhone,” said Stripe Chief Business Officer Billy Alvarado. “With Tap to Pay on iPhone, millions of businesses using Stripe can enhance their in-person commerce experience by offering their customers a fast and secure checkout.”

The new payment acceptance tool is a direct competitor to the multiple merchant acceptance solutions that launched over a decade ago, including Block’s Square, which launched its card reading dongle in May of 2010, and PayPal, which launched its contactless QR code payment technology in 2020.

Despite this well-established competition, Apple still has more than a fighting chance to gain traction with Tap to Pay. That’s because not only is it hardware-free, it is also virtually friction-free for customers, and doesn’t require shoppers to download a new app or change their existing habits. Additionally, because it is an Apple product, we can count on it to build a customer-first user interface.

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Betterment Embraces the Cryptocurrency Revolution with Makara Acquisition

Betterment Embraces the Cryptocurrency Revolution with Makara Acquisition
By David Penn Posted on
Categories: Acquisition, Alumni News, Betterment, Daily news
  • Investment platform Betterment will acquire cryptocurrency portfolio manager Makara. Terms were not disclosed.
  • The acquisition will enable Betterment to incorporate automated, personalized digital asset investing into its roboadvisory services.
  • Seattle, Washington-based Makara was founded in 2021 and has raised $2.1 million in seed funding.

Mr. Money Mustache may not like it. But the news that online investment platform Betterment has agreed to acquire cryptocurrency portfolio manager Makara is yet another sign that incumbent fintechs are playing a major role in helping crypto go mainstream.

“Crypto is here to stay and Betterment wants to live our promise of long-term diversification and to provide our customers with the best variety of assets in the marketplace,” Betterment CEO Sarah Levy explained. Levy praised the Makara acquisition as a unique opportunity to bring Betterment customers managed cryptocurrency portfolios “combined with the guidance and ease-of-use that have defined Betterment.”

Headquartered in Seattle, Washington, Makara was founded in 2021 by Jesse Proudman and Sadie Raney. The company is the first crypto-based roboadvisor to be registered with the SEC, and offers investment exposure to the cryptocurrency market that is both automated and personalized to the investor’s goals and preferences. Makara investors can select cryptocurrencies organized into thematic baskets – Bitcoin, Blue Chip, Decentralized Finance, Ethereum, Inflation Hedge, Metaverse, Universe, and Web 3.0 – that cover the wide (and growing) range of digital asset offerings.

Betterment leverages passive index-tracking and fixed income ETFs to offer goal-based investing strategies via both taxable and tax-advantaged accounts such traditional and Roth IRAs. The addition of Makara will enable the New York-based investment platform to give investors the ability to diversify their accounts without having to worry about selecting individual digital assets. The acquisition will also make it easier for Betterment’s financial advisor customers to offer cryptocurrency exposure to their clients without those advisors having to be experts in the digital asset arena.

The acquisition is expected to close later in Q1 of 2022. Makara’s team of experts and engineers will join the Betterment team at that point.

“We developed Makara to bring an easy and accessible long-term investing approach to cryptocurrencies,” Makara co-founder and CEO Jesse Proudman said. “Combining our crypto expertise with Betterment’s scale will accelerate the growth of the platform with both retail investors and financial advisors.”

Betterment made its Finovate debut in 2010, winning Best of Show for its online savings and investment platform. In the years since, the company has grown into one of the world’s leading digital investment advisors, with more than 700,000 customers and more than $33 billion in assets under management. Last fall, the company announced raising $160 million in funding – including a $60 million in Series F equity investment – earning the New York-based firm a valuation of $1.3 billion.

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American Express Launches Digital Checking Account to Compete with Challenger Banks

American Express Launches Digital Checking Account to Compete with Challenger Banks
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Alumni profile, American Express, Daily news
  • American Express is launching a new, digital checking account called Amex Rewards Checking
  • The Amex Rewards Checking account will offer a 0.50% high-yield APY on account balances, along with other membership rewards
  • The new checking account is only open to primary American Express credit cardholders and is limited to individual users.

Financial services giant American Express is expanding its horizons into the crowded world of digital checking. The company is launching Amex Rewards Checking, an all-digital consumer checking account, for eligible U.S. card members.

As an incumbent player, American Express has multiple advantages over the many smaller digital challenger upstarts that have launched in the past two years. That’s because not only does the New York-based firm have credibility and a pre-existing large customer base, it also comes with a reputation for its rewards and perks.

“Our Members want more banking products and services from us,” said American Express Executive Vice President and General Manager of Consumer Banking Eva Reda. “And they want more from their checking account, without giving up the benefits that are important to them. That’s why we built Amex Rewards Checking to deliver more value for Members with the powerful and trusted backing of American Express. It’s digital checking without compromises.”

The checking account product will be a draw to Millennial and Gen Z users, who look for banking products with incentives and rewards. In fact, according to a study from Amex, 35% of consumers rank rewards and offers at the top when considering opening a new account. Given this, Amex packed competitive features into its new checking account. Accountholders can:

  • Earn 0.50% high-yield APY on their account balance, which is 10x higher than the national rate
  • Gain one Membership Rewards point for every $2 spent on eligible debit card purchases. Users can redeem these points for deposits into their Amex checking account
  • Pay no monthly maintenance fees or minimum balance fees
  • Receive purchase protection for accidental damage or theft on eligible purchases
  • Access Amex’s customer care providers 24/7 via phone or chat
  • Receive fraud protection and monitoring
  • Make fee-free ATM withdrawals at 37,000 MoneyPass ATM locations

The new Rewards Checking account is only open to primary American Express credit cardholders who have had their account for more than three months. Currently, the new checking account is limited to individuals and cannot accommodate joint accounts.

The new Amex Rewards Checking is American Express’ first checking account for retail customers. The financial services giant has offered small business checking for a little over a year now. The company acquired Kabbage in 2020 for $850 million and leveraged the purchase to launch a small business checking offering in 2021. That said, it’s worth noting that Amex’s new debit card is not available to its small business checking customers.

American Express, which presented at our developers conference in 2015, is listed on the New York Stock Exchange under the ticker AXP. The company saw $36 billion in revenue in 2020 and has a market capitalization of $149 billion. Stephen Squeri is CEO.

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