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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
The new offering, MemberPass Express, will be made available via MemberPass, the first KYC-compliant, member-controlled digital identity issued by credit union cooperatives. MemberPass Express will enable credit union members to authenticate their identity during e-commerce, online, or mobile banking transactions, as well as while visiting a branch or contacting a call center. The new seamless authentication process, which provides multi-channel authentication in less than 10 seconds, is currently being piloted with a pair of credit unions.
“The joint new solution leverages artificial intelligence to protect members from fraud by analyzing the context (such as identity, behavior, location, device, and channel) of each user journey in real-time,” Entersekt CEO Schalk Nolte said. “This informs the most appropriate member authentication method that will be used, and means that members will now benefit from industry-leading authentication, while enjoying a fast and smooth user experience.”
South Africa-based Entersekt ended 2021 with a major investment from technology-based private equity firm Accel-KKR. Terms of the deal were not disclosed. Joe Porten, Principal at Accel-KKR, praised the company for its “deep vertical expertise” and its record of success in the financial services industry. “As a partner, Accel-KKR is committed to helping the Entersekt team accelerate growth and continually deliver innovation in their category.”
Zogo Finance announced a partnership with Apex Fintech Solutions to help promote financial literacy.
Clients of the two companies will be able to access more than 450 financial literacy-related educational modules.
Zogo Finance won Best of Show at FinovateFall 2019 in New York for its Teen Financial Literacy App.
Zogo Finance, which won Best of Show in its 2019 FinovateFall debut, announced a partnership with Apex Fintech Solutions that will help investors educate themselves on the fundamentals of sound money management. The collaboration will enable clients of both companies to access more than 450 learning modules on investing and financial literacy.
“Millennials and Gen Z are reinventing investing, which requires companies to adapt to their evolving interests, financial aspirations, and educational needs,” Zogo founder and CEO Bolun Li explained. “Apex shares our vision of harnessing technology to create customized, flexible, and accessible learning opportunities to support investors of all types.”
With more than 500,000 users and 180+ financial institution partners, Zogo leverages behavioral economic research – much of it developed at Duke University – to help improve youth financial literacy. The company’s app uses easy-to-comprehend lessons to educate users on complicated financial concepts, and offers rewards and incentives to encourage users to complete the coursework. Users can also earn rewards by taking positive financial actions such as logging into their mobile banking app, visiting a bank branch, or even using their debit or credit cards. Since inception, users of the Austin, Texas-based company’s technology have completed more than 16 million lessons, with the average Zogo users finishing 38 financial literacy courses.
“Our mission is all about democratizing finance through access – and education is a vital part of that,” Apex Fintech Solutions CEO Bill Capuzzi said. “Partnering with Zogo helps us empower our clients and their millions of customers.”
Founded in 2018, Zogo Finance forged 31 new partnerships with financial institutions in the first quarter of 2022. The company has raised $295,000 in funding from investors including MassChallenge and TechStars.
The news that CarbonPay has launched a new payment card that helps users determine and offset their carbon footprint is a reminder of the efforts that fintechs of all types are making to support climate sustainability.
CarbonPay’s new offering, only available in the U.S. and the U.K., is a prepaid corporate card called CarbonPay Business Ctrl. The card sits in front of a company business account and comes with an administrator dashboard to enable individual card spending limits. Because the solution is a prepaid card, there are no credit checks, interest rates, or repayment due dates for cardholders to worry about. The card includes smart features such as automating offsetting, carbon footprint tracking data, accounting software integration, and expense management.
CarbonPay says that for every $1.50 (or £1) spent using the card, it offsets 1kg of CO2 at no additional cost. CarbonPay has partnered with sustainability-as-a-service platform Ecolytiq to provide carbon footprint tracking.
“The fight against climate change can’t be solved by a handful of people, it requires systemic change and for everyone to take action,” CarbonPay CEO and founder Rory Spurway said. “That’s what inspired us to create CarbonPay, to help people and businesses around the world make a simple, but impactful change which will help us all in the fight against climate change. We turn every transaction into meaningful climate action by automatically offsetting CO2 every time you pay. It’s a simple, but important step towards making a real difference.”
What other “simple, but important” steps are fintechs taking when it comes to climate sustainability? CommerzVentures recently set out nine fields that fintechs and financial services companies have pursued in order to address the climate concerns of customers and clients. Here’s a look at some of the major categories, and the way fintechs are innovating within them.
Carbon Offsetting: CarbonPay’s new prepaid corporate card, mentioned above, is an example of carbon offsetting in fintech. Carbon offsetting involves lowering or removing carbon dioxide and/or other greenhouse gases in one instance to help compensate for CO2/greenhouse gas emissions elsewhere.
Carbon Accounting: Carbon accounting is a key part of carbon offsetting and involves measuring the amount of carbon dioxide or greenhouse gases created by a given process. In the fintech context, companies like Meniga are working with banks like Iceland’s Íslandsbanki to launch solutions that track the carbon footprint of a customer’s spending decisions . Carbon accounting is related to ESG Reporting, which involves the disclosure of information on a company’s environmental, social, and corporate governance. This provides interested investors with the transparency they need in order to determine whether or not a potential investment is consistent with their environmental, social, and corporate governance values.
Impact Investing/Financing: Investment strategies that seek to combine positive financial returns with positive environmental outcomes are referred to as impact investing or financing strategies. Within fintech, a growing number of roboadvisors have sought ways to enable customers to invest in companies – or funds of companies – that have a proven commitment to climate sustainability. Also known as socially responsible investing, digital investment platforms from Betterment to Personal Capital have included these kinds of investing options for their clients.
Sustainable Banking: Sustainable banking involves using ESG criteria to set the policy agenda for otherwise traditional banking. Whereas banks and other financial institutions historically have focused on the balance between risk and return, sustainable banking adds another factor, impacts, to create a third dimension that bank leaders must focus on when running their businesses. The most common example of this in the environmental context is the effort by sustainable banks and financial institutions to invest in renewable energy enterprises while eschewing investment in fossil fuel companies.
Indeed, looking at the Dow Jones Sustainability Index, which features the top 10% of the largest 2,500 companies in the S&P Global BMI based on their long-term ESG criteria, we see that those banks near the top of the list earned their lofty ranking in large part due to their hands-off attitude toward “dirty” energy such as oil and coal. BBVA, for example, secured the top spot this year as the most sustainable bank in the world – along with South Korea’s KB Financial Group. The Spanish bank earned credit for doubling its sustainable finance target and for issuing objectives to decarbonize its portfolio by 2030.
“This recognition confirms the success of our sustainability strategy and encourages us to continue working with the goal of accompanying our customers and society as a whole as they move toward a more sustainable and inclusive future,” BBVA Global Head of Sustainability Javier Rodríguez Soler said in a statement.
“Every company today is operating in the ‘decision economy,’ which is stimulated and fueled by data,” Arkose Labs Chief Product Officer Ashish Jain said. “We designed Arkose Detect to leverage the collective data from the world’s biggest companies so that those hard-to-suss-out fraud attacks can be easily detected. As fraud is constantly evolving, we have an ambitious product roadmap and will continue to innovate to stay ahead of threats.”
Arkose Detect was previously an embedded component of the company’s dynamic attack response solution, Arkose Protect. Now, in the wake of testing with major international businesses, Arkose Detect is being rolled out as its own product. Arkose Detect leverages AI to force fraudsters and cybercriminals to become increasingly sophisticated in their attacks. This raises the cost of their attacks against businesses defended with Arkose Detect, incentivizing fraudsters to go elsewhere.
Additionally, the new solution gives customers a risk score that allows them to adjust their own fraud models to better detect both automated, malicious bots as well as human-driven fraud attacks. Arkose Labs will also share the fraud data collected and analyzed by Arkose Detect with its customers in order to enable them to enhance their internal fraud prevention processes. Arkose Detect features more than 70 raw risk signals and more than 150 pre-built insights culled from Arkose Labs’ global network.
“In just six years, Arkose Labs has grown to boast a portfolio of category-leading customers across financial services, gaming, travel, ecommerce/retail, social media, and technology industries,” Arkose CEO and founder Kevin Gosschalk said. “And this is just an early chapter in our growth story. Our forecasted trajectory is exciting and attracting attention due to the efficiency of our core technology, on which Arkose Detect is built.”
A Finovate alum since its Best of Show-winning demo at FinovateSpring in 2019, Arkose Labs has since partnered with Bugcrowd to launch a private bug bounty program, introduced the industry’s first warranty against credential stuffing attacks, and unveiled a range of “significant updates” to its fraud detection platform including the development of Arkose Enforce, Arkose Insights, and Arkose Detect.
“The latest product enhancements include detection capabilities which are adapted to a world where attackers are spoofing devices and other identifying information,” Jain said when the updates were announced in October. “Customers also have easier access to the multi-layered risk insights that we use in our machine learning-powered decision engine.”
Headquartered in San Francisco, California, Arkose Labs was founded in 2015. The company has raised more than $106 million in funding from investors including the SoftBank Vision Fund 2, M12 – Microsoft’s Venture Fund, and the Sony Innovation Fund, among others.
Revolut announced a partnership with fintech technology infrastructure company Cross River.
The partnership will enable Revolut to offer personal loans to its customers in the U.S.
The announcement comes in the wake of Cross River’s announcement that it raised $620 million in March.
International superapp Revolut has partnered with fintech infrastructure provider Cross River to help it build and scale its business in the U.S. The collaboration will facilitate the first personal loans for Revolut’s U.S. customers and, courtesy of Cross River’s technology infrastructure, will be followed by additional credit solutions to be launched later this year.
“At Revolut, we’re building the world’s first global financial superapp so the move into credit and personal loans is a natural next step,” Revolut U.S. Head of Lending Tarun Bhushan said. “Revolut has developed technology to provide loans instantly to approved customers, with no origination fees – so customers can get the credit they need, when they need it.”
In addition to the absence of origination fees, the partnership means that Revolut borrowers will also be liberated from late fees and prepayment penalties, as well. Potential borrowers can also use the Revolut app to check their rates without affecting their credit score. Revolut’s “near-instant” and same-day loan funding solution means that users receive their funds in their Revolut wallet accounts within minutes of approval. Customers can also establish automatic loan repayments using the app’s AutoPay feature.
“At Cross River, we’re always looking for new and innovative ways to provide access to credit,” EVP and Head of Fintech Banking at Cross River Adam Goller said. “Our partnership with Revolut is instrumental in facilitating responsible financial solutions to consumers, and we’re excited to be powering Revolut’s U.S. expansion.”
Loans from Revolut are currently available only to the company’s U.S, customers. Revolut expects to be able to make the personal loans available to all U.S. consumers “in the coming months.”
Revolut’s partnership news comes as the company makes headlines for both personnel moves and expansion into new markets. This spring, Revolut appointed a new APAC General Manager, a new CEO for Brazil ahead of its expansion into that Latin American country, as well as a new General Manager and a new Head of Growth to support Revolut’s move into the U.S. market.
“It’s an exciting time to be joining Revolut as we further establish and grow our brand in the U.S.,” new Revolut General Manager for the U.S. Yuval Rechter said in March. “The pandemic has supercharged the digitalization of banking and Revolut is the best answer for U.S. consumers seeking greater value, transparency, and flexibility in how they manage their money.”
Cross River made fintech headlines less than a month ago with the news of its $620 million capital raise led by Eldridge and Andreessen Horowitz. The funds will be used to accelerate the company’s tech-focused growth strategy which consists of projects in embedded finance – including payments, lending, and crypto – as well as investments in “people and communities,” plans for international expansion, and “bolstering strategic partnerships.”
“Cross River is powering the future digital economy and changing lives by reinventing the way financial services are accessed,” Cross River founder, President, and CEO Gilles Gade said last month with the financing was announced.
Finovate alums Boss Insights and MX are partnering to give SMEs access to real-time financial business data.
The partnership will support faster, more accurate lending and funding for SMEs, as well as enhancing payment services.
A multiple-time Finovate Best of Show winner, MX is headquartered in Lehi, Utah. Boss Insights is based in Toronto, Ontario, Canada.
A partnership between open finance company MX and business data aggregation innovator Boss Insights will make it easier for small and medium-sized businesses to access real-time financial business data. Announced late last week, the collaboration will help banks and other financial institutions better serve their SME customers.
Courtesy of the new partnership, firms will have a 360-degree view of their business customers’ financial health via a single API. The API offers real-time access and integration with accounting, banking, and commerce data from more than 1,000 sources including QuickBooks, Xero, Shopify, Stripe, and Amazon.
“Boss Insights shares MX’s view that finances should be simple, useful, and intuitive,” Boss Insights CEO Keren Moynihan said. “Together, MX and Boss will empower fintechs, private lenders, and financial institutions with a platform to originate, decide, and monitor the business requests of their SMB and commercial business customers. This will help them make faster, more accurate lending, funding, and payment decisions.”
Among Finovate’s newer alums, making its Finovate debut in 2019, Boss Insights leverages big data and AI to accelerate the lending process for SMEs. The company’s Smart Capital product suite offers automated screening, due diligence, and portfolio management, and empowers lenders with real-time insights that lower risk and boost revenue opportunities. Founded in 2017, Boss Insights is headquartered in Toronto, Ontario, Canada.
“The partnership of MX and Boss Insights demonstrates the power and role of connectivity and data in the future of finance,” MX EVP of Partnerships Don Parker said in a statement. “As a leader in Open Finance, MX is committed to expanding our partner ecosystem with reputable partners who align to our overarching mission and stringent data and security standards. Today’s partnership with Boss Insights demonstrates our commitment to Power the Open Finance Economy.”
The newly-announced collaboration with Boss Insights is one of a number of partnerships that Lehi, Utah-based MX has announced in recent weeks. Earlier this month, the company teamed up with omnichannel payments platform Qolo Partners to help fintechs and neobanks scale their businesses faster. In March, MX worked with fellow Finovate alum Fiserv to enable secure consumer financial data access and sharing. That same month, MX announced that it had forged a new data access partnership with the University of Wisconsin Credit Union.
The investment includes $115 in debt funding and $60 in equity funding.
Wagestream will use the funds to add to its product lineup and fuel its U.S. expansion.
Earned wage access tool Wagestreamlanded $175 million in combined debt and equity funding today. The Series C round, which brought $115 in debt and $60 in equity, boosts the U.K.-based company to a total of $254 million in total funding.
New investors in the round include Smash Capital, BlackRock Innovation and Growth Trust, and Silicon Valley Bank. Existing investors Northzone, Balderton, QED, LocalGlobe, XYZ, Village Global, and Fair By Design also contributed.
Founded in 2018, Wagestream has offered one million workers access to $4.7 billion in wages that they’ve earned. The company considers one measure of its success as capital raised to liquidity released. Wagestream estimates that, prior to today’s investment, the company’s ratio was 1:55. That is, for every $1 of capital it raised, it released $55 of capital. “We’re aiming for a ratio of 1:100, meaning every $1 of capital raised by Wagestream will unlock $100 of impact for frontline workers,” said Wagestream Co-founders Peter Briffett and Portman Wills.
In addition to making that ratio possible, today’s investment will also power the development of new services, including an insurance offering that automatically adjusts coverage and premium, an app that enrolls users into optimal energy plans, fair credit without the need for a traditional credit score, and an intelligent savings installment plan.
Wagestream will also leverage the investment to expand internationally. Specifically, the company will focus on serving U.S. users. To fuel this move, Wagestream recently opened its U.S. headquarters in Washington, D.C.
Payment-card-as-a-service startup Deserveannounced it can now empower its banks and B2B clients via a new tool, the Commercial Card Platform, that enables customers to add a commercial payment card offering to their product lineup.
“We are extending our digital, cloud-native, mobile-first platform from consumer cards to commercial,” said Deserve CEO and Cofounder Kalpesh Kapadia. “With this, we will enable any financial institution or platform that serves other businesses to embed and issue commercial credit cards. For non-banks, this can be a significant source of revenue and can enhance brand loyalty. Our platform will enable those who serve small and medium-size businesses and corporations to offer true credit combined with sophisticated expense management.”
Formerly known as SelfScore, Deserve has re-imagined traditional credit cards by transforming the application and onboarding processes, as well as the credit card itself by bringing them into the digital-first era. The company enables businesses to provide a white-labeled or co-branded card program made possible via a set of configurable APIs and SDKs.
The new Commercial Credit Card product helps companies, banks, and online lenders offer a white-labeled or co-branded credit card product for their business customers. The full-service card product offering will include underwriting, instant virtual card issuance, digital wallet provisioning, and enterprise controls that will enable management to track, manage, and understand business expenses.
Customers Bank, which is headquartered in Pennsylvania and counts $19.6 billion in assets, will be the first bank on Deserve’s Commercial Card Platform. “Together with Deserve, we are looking forward to offering an exciting and valuable product to our small business customers, combining credit with powerful expense management,” said Customers Bank President and CEO Sam Sidhu.
Founded in 2013, Deserve raised an undisclosed amount of funding from Visa last fall, adding to the company’s $287 million in total funding. Among Deserves investors are Mastercard, Goldman Sachs Asset Management, Sallie Mae, Ally Ventures, Visa, Accel, Pelion Venture Partners, Aspect Ventures, and Mission Holdings.
Identity expert SailPoint is making waves this week. The Texas-based company has agreed to be acquired by private equity firm Thoma Bravo.
The all-cash deal, which values SailPoint at $6.9 million, will take the company private. SailPoint debuted on the New York Stock Exchange under the ticker SAIL in 2017. As part of the transaction, SailPoint stockholders will receive $65.25 per share, which represents a premium of 48% to the company’s 90-day volume-weighted average price.
SailPoint cited multiple benefits of the new arrangement. As a private firm, the company will have increased flexibility and resources to provide identity security solutions. Additionally, SailPoint can now tap into Thoma Bravo’s operating capabilities, capital support, and software expertise. “The transaction will also allow us to pursue our long-term growth trajectory with greater flexibility and effectiveness to support our customers, expand our markets, and accelerate innovation in identity security with the backing of a strong financial partner with deep sector expertise,” said SailPoint Founder and CEO Mark McClain.
The deal comes at a time of increased interest in cybersecurity. Because many employees are still working at home after the pandemic, fraudulent attackers are taking advantage of increased security vulnerabilities. Additionally, experts have warned of potential cyber threats arising from the Russia-Ukraine war.
“SailPoint is ideally positioned to capitalize on the large and growing demand from modern enterprises for robust identity security solutions that secure their business and reduce risk,” said Thoma Bravo Managing Partner Seth Boro. “Their market-leading identity security platform provides the autonomous and intelligent approach that the market requires today, especially among larger enterprises and as hybrid working becomes more common.”
The transaction is expected to close in the second half of 2022.
Social investing platform eToro is launching eToro Art, a $20 million fund to support NFT creators.
Once the company’s $20 million collection of NFTs is complete, eToro will be one of the world’s leading NFT collectors.
eToro has made it clear that, while its new project supports creators, it is not an NFT marketplace.
When it comes to trends in fintech, NFTs are red hot. To capture some of this heat, social trading and investment network eToro is launchingetoro Art, a $20 million fund to support NFT creators, agencies, and brands by purchasing blue chip NFTs and investing in emerging creators and NFT projects.
As part of etoro Art, the Israel-based company has amassed its own collection of NFTs, which includes projects from Bored Ape Yacht Club, CryptoPunks, World of Women, and pieces from emerging artists. After eToro spends the full $20 million on NFTs, the company will be one of the world’s leading NFT collectors. This week, eToro will debut its NFT collection during an event at the Bass Contemporary Art Museum in Miami.
eToro Cofounder and CEO Yoni Assia said that the company’s entrance into the NFT space “is only natural” and that the move will serve as the bridge to bring its community of 27 million registered users into NFTs and the metaverse. “We’re incredibly excited to see the developments in this space over the coming months,” Assia added.
As part of today’s move, eToro will spend an additional $10 million to support up-and-coming creators and brands on new, emerging projects. Creators simply fill out an intake application and, if they are selected to participate, eToro will offer “a range of support and services” to help them bring their project to fruition.
“As the leading social investing platform, eToro is well positioned to lead this space,” said eToro Art Managing Director Guy Hirsch. He added, “eToro.art will bring creators and investors together through technology, uniting communities around art.”
The company is making it clear that it is not launching an NFT marketplace. “No NFTs may be purchased through eToro by use of the services provided by eToro, and eToro is not responsible for any trading activity in NFTs which may occur on any third-party platforms to which eToro may direct its customers,” the company said in a statement. Instead, eToro Art is simply an aggregation platform with referral to third-party platforms.
Founded in 2007, eToro went public in a $10 billion SPAC last year. The company was an early adopter of cryptocurrency, having purchased 100 bitcoin in 2012.
Women-focused roboadvisor Ellevest received a $53 million Series B investment, bringing its total funding to $153 million.
The company will use the funds to deepen its offerings and to help fulfill its goal of getting more money into the hands of women.
Ninety percent of the investors in the Series B round are women and underrepresented investors.
Women-focused wealthtech startup Ellevest just raised $53 million in Series B funding to fulfill its mission to get more money into the hands of women.
BMO and Contour Venture Partners co-led the round, which brings the company’s total funding to $153 million. Contributions also came from new investors Halogen Ventures, Cleo Capital, Stardust Equity, The Venture Collective, Envestnet, as well as the LGBTQIA+ investment syndicate Gaingels. Existing investors Pivotal Ventures, Venture Fund, Khosla, AME Cloud Ventures, Rethink Impact SPV, Salesforce Ventures, PayPal Ventures, and Allianz Life Insurance Company of North America also contributed.
Ninety percent of the investors in today’s Series B round are women and underrepresented investors. “What we’ve got here is women investing, women investing in women, and women investing to help women invest,” the company stated in the press release.
“Ellevest was built by women, for women. It is also funded by women, with 360 women and underrepresented investors participating in this funding round. This group recognizes that women have been disproportionately losing financial ground, and that’s bad news for all of us. Ellevest has a key role to play in addressing this issue: to help women — and their families — rewrite their financial narratives and thrive,” said Ellevest CEO Sallie Krawcheck.
Founded in 2014 by Krawcheck, Ellevest has grown to $1.44 billion in assets under management. The company will use today’s investment to deepen its offerings, which currently consists of a roboadvisor, financial and career coaching, insurance, and a digital bank with a debit card that offers a savings roundup tool and cashback rewards.
In addition to its financial products and services, Ellevest also serves financial content to its community of three million members, a number that includes Sallie Krawcheck’s connections on LinkedIn and Ellevest’s followers on Instagram.
BankiFi launched its Open Cash Management platform this week.
The U.K.-based fintech built its latest offering to bring the benefits of both embedded banking and open banking to small and medium-sized businesses.
A “supercharged” version of BankiFi’s current platform, the new offering works alongside existing accounting systems and requires no tech integration.
The new Open Cash Management platform offered by BankiFi will provide SMEs with a fully embedded banking service that enables them to manage a wide variety of banking capabilities. Invoicing, payments, collections, accounting, cash forecasting, and working capital optimization insights are all available via the platform, which is built with small and medium-sized businesses in mind.
“The Open Cash Management Platform is a business banking super app,” BankiFi Chief Product Officer Marijke Koninckx said. “With Open Cash Management, banks can offer their small business customers a full embedded banking service, which revolves around procure to pay and order to cash workflows. Instead of offering a banking channel for simple tasks, such as checking account balances and making payments, banks can instead offer a rich and comprehensive service to their SMBs centered around a bank’s brand and digital channel.”
The new offering is described by the company as a “supercharged” version of its current service that combines the benefits of both embedded and open banking. The platform leverages a suite of pre-existing bank connectors that allow the solution to be onboarded without the hassles of technology integration. The solution also works alongside the company’s existing accounting system.
Founded in 2018 and headquartered in Manchester, U.K., BankiFi began 2022 by helping TSB launch a new app, Revenu, that will enable small businesses to leverage SMS, WhatsApp, email, and QR codes to get paid faster. Also this year, BankiFi announced that it was joining the Visa Fintech Partner Connect program to help bring SME business banking solutions to Visa’s clients and partners.
BankiFi has raised $3.7 million in funding, according to Crunchbase. The company includes Co-Operative Bank, Praetura Ventures, Tech Nation Fintech, the Nationwide Building Society, and the FIS FinTech Accelerator in Partnership with The Venture Center among its investors.
