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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Merchant services aggregator and mobile payments company Square is making online merchants’ lives easier with a new launch today.
The Square Photo Studio app helps sellers take high-quality pictures of merchandise and sync them to their online store.
The app, which is available to both Square sellers and anyone with a Square Online Checkout link, guides merchants through easy-to-follow prompts to help them take the best photo. The photo studio automatically isolates the product from the background then helps users stylize the photo with backgrounds, shadows, and colors.
Once the seller has optimized their photo, they can connect their images to the corresponding items in their Square catalog or create a new item. After merchants list items in the catalog, they can start selling immediately.
“It’s no secret that products with professional-looking photos perform better than those without,” said Head of eCommerce at Square David Rusenko. “Unfortunately, the cost, skill set, and labor involved with taking those photos was often prohibitive. Now, with Square Photo Studio, sellers can give their items the look of a professional photo studio shoot from the comfort of their home, the office, or on the go.”
The Square Photo Studio app is available to everyone in the Apple App store, which creates a lower barrier to entry for anyone who wants to sell physical goods. Because the app is very accessible and easy-to-use, it has the potential to increase the number of transactions from Square sellers.
The Finovate Team was saddened to hear of the passing of Brandon Dewitt, co-founder and Chief Technology Officer of MX. He was 38.
In a letter to company employees, MX CEO Ryan Caldwell, who co-founded the firm with Dewitt in 2010, wrote of his colleague’s “brilliance, boundless positivity, wonderful wit, and ability to be joyous and grateful, regardless of what challenges he faced.”
Diagnosed with Stage IV cancer in 2016, Dewitt was a staple of MX’s participation at Finovate events, including leading the company’s most recent Best of Show winning demo at FinovateFall in 2019. But it may have been his presentation at Finovate’s developers’ conference, FinDEVr Silicon Valley 2016, that left the most indelible impression on so many of us. After a discussion of the company’s latest innovation, Dewitt retold the story of his battle with cancer, the way his teammates at MX rallied in support, and why he wanted to discuss this topic with our Finovate/FinDEVr audience.
What I want to say to every developer that’s here today, every entrepreneur that’s here to today, every builder that’s here today is about the seemingly impossible, certainly improbable, but necessary. I want you to know that we wake up every single day and say ‘but necessary.’ We know as an organization what our task is: to be ‘but necessary’. And I want to challenge every developer out there in saying, ‘are you working on something that is necessary?’
You may be thinking, ‘man he went from talking software to talking cancer and scared it me’ …” Dewitt conceded. “But if you look at the leading causes of death of humans, in the top ten is suicide … And if you look at the leading causes of suicide, one of the leading causes of suicide is financial stress. The World Health Organization considers financial stress one of the most significant problems facing mankind.
So what we’re doing here today and what you wake up and do on a daily basis, can be part of the solution to a very, very solvable problem. And so I want to challenge you not only as organizations, not only as builders, but as humans. Are you waking up every single day and doing something that is necessary? And if you’re not, there’s tons of organizations that are out in that hallway that have a booth set up that are doing something that is necessary, that is finding a way to change the world that is necessary for the future of humanity, and I would encourage you to check them out.
Our thoughts and deepest condolences are with Brandon Dewitt’s fiancé, Kara, as well as his family, friends, and his teammates at MX.
Buy Here, Pay Here (BHPH) crowdsourced securitization firm Agora Data is coming out with a new financing tool this week. The Texas-based company is introducing a reducing interest rate line of credit for BHPH dealers and small-to-mid-size finance companies to offer their sub-prime borrowers more vehicle financing options.
With the new reducing rate line of credit, the interest rate decreases over time. The loans also come with other advantages not typically found with traditional financing options, including no personal guaranty or recourse, flexibility to draw cash as needed, and no origination or unused line fees.
“With AgoraCapital, we remove the obstacles dealers confront in traditional lines of credit and empower them with the same secret sauce enjoyed by larger national dealer groups,” said Agora Data CEO Steve Burke. “Agora’s innovative, best-in-class financing options and robust data analytics are leveling the playing field for an underserved and underbanked industry.”
Agora Data was founded in 2017 and its team of auto retail, finance industry experts, and top data scientists leverage AI to bring BHPH car dealers a simplified experience when it comes to selling auto loans. Agora Data aids dealers in selling their auto loans to banks, finance companies, hedge funds, and private equity firms. The selling tool groups all firms’ offers together and analyzes each one in order to provide the dealer with the most competitive offer.
In addition to the selling service, the company offers AgoraInsights, a product that helps dealers maximize portfolio performance, reduce risk, and manage cashflow. “Agora is already making a positive difference for the BHPH industry by helping our members strengthen their financial footing and realize unprecedented growth, knowledge, ability to compete and ultimately build wealth,” added Burke.
News about auto financing has consistently appeared in the fintech headlines since the beginning of the COVID pandemic. However, while Agora Data’s announcement is aimed at auto financing for the underbanked community, most of the news we’ve seen in this sector has focused on digitizing and managing the loan application portion of auto loans and refinances. One such company, MotoRefi, partnered with SoFi in April of this year and received $45 million in funding in May.
In an extension of its $200 million Series E financing round, digital payments company Airwallex has secured an additional $100 million in funding. The extension came from Lone Pine Capital and featured the participation of existing investors such as 1835i Ventures and Sequoia Capital China. Now standing at $300 million, Airwallex’s latest funding gives the company a valuation of $5.5 billion. The company has raised a total of $802 million.
“As we approach our sixth anniversary, we want to continue to connect entrepreneurs, business builders, and makers with opportunities in every corner of the world,” co-founder and CEO of Airwallex Jack Zhang said. “This new capital injection will allow us to do just that, fueling M&A opportunities that will accelerate our global expansion plans, pursuing our mission to empower businesses to grow without borders.”
Headquartered in Australia, Airwallex offers a financial infrastructure and platform that enables businesses to manage payments online. The company’s business accounts allow businesses to transfers funds worldwide to more than 130 countries in 31 currencies, at a cost of 0.4% to 1.0% above the interbank FX rate. Airwallex’s business accounts connect seamlessly with online stores such as eBay, Shopify, and PayPal, as well as with accounting packages like Xero, and enable firms to issue virtual “borderless” payment cards to their employees.
Airwallex’s funding comes as the company reports a 1.6x year-over-year revenue increase for Q3, along with annualized revenue of more than $100 million. Launching its virtual employee cards in Hong Kong and the U.K. this past quarter, Airwallex also secured licenses to operate in both Singapore and Malaysia.
“Receiving this approval reflects our robust policies, compliance framework and risk management systems we have put in place,” Zhang said when Airwallex received its Major Payment Institution License by the Monetary Authority of Singapore (MAS) earlier this month. “We will continue to work closely with regulators and partners to ensure we facilitate a safe, effective, and transparent way to manage their cross-border financial transaction needs.”
Founded in 2015, Airwallex has recently announced partnerships with Australian digital brokerage company Stake and travel lifestyle brand Cathay. In October, the company was named to the 2021 CB Insights Fintech 250 list for the fourth consecutive year.
U.S. Bank has agreed to acquire San Francisco, California-based expense and travel management company TravelBank. Financial terms of the transaction were not disclosed, but one outlet, Skift, has said that the deal was valued at $200 million.
“We are focused on giving businesses more confidence, control, and convenience in managing payments and expenses,” U.S. Bank Vice Chair of Payment Services Shailesh Kotwal said. “TravelBank will help us accelerate these efforts.”
Founded in 2016, TravelBank offers an all-in-one solution for expense and travel management. Relying on a single platform, reporting model, and subscription price, TravelBank helps employees and businesses control and track expenses, automate traditionally manual processes, streamline both approvals and reporting, and remain compliant. With more than 20,000 customers, TravelBank claims to have reduced business travel spending by its clients by 30% on average, while simultaneously boosting employee morale with a user-friendly design and a travel rewards program. Ahead of this week’s acquisition, the company had raised $35 million in funding from investors including Dreamers VC and DCM Ventures.
“We created TravelBank to provide a single experience for expense reporting and travel management,” co-founder and CEO of TravelBank Duke Chung explained. “Our combined offering with U.S. Bank will be the most comprehensive expense, travel, and payment management solution in the industry.”
Skift further reported that Chung will “move over to the bank” post-acquisition, while TravelBank will continue to support its existing clients.
The acquisition is the fruit of a partnership between the two companies that extends back to September of 2020. In the fall of last year, U.S. Bank integrated TravelBank’s travel and expense management platform into its U.S. Bank Instant Card. The collaboration enabled program administrators to issue Instant Cards directly from their expense management platforms.
With nearly 70,000 employees and $567 billon in assets, U.S. Bancorp is the parent company of U.S. Bank National Association. Headquartered in Minneapolis, the bank serves millions of customers, both in the U.S. and around the world, with a variety of services including consumer and business banking, payments, corporate and commercial banking, wealth management, and investments.
U.S. Bank demonstrated its Card-as-a-Service (CaaS) solution at FinovateFall 2021 in September. The technology enables companies to leverage API integration to extend corporate credit digitally and create a custom virtual payment experience in their ecosystem.
MoneyLion made a move today that will help it catch the eye of prospective customers and retain its existing ones. The digital bank acquired MALKA, a creator network and content platform, to help it better engage with consumers and connect with communities.
MALKA was founded in 2012 and works with creators to develop content across digital mediums including advertising campaigns, original branded content, e-gaming livestreams, podcast series, feature length documentaries, sports representation, and marketing. One of MALKA’s differentiating factors is that it maintains a talent base of 170 employees in-house in order to maintain relationships instead of working with different freelancers on different projects.
MALKA will help MoneyLion, which already offers MoneyLife content, in its mission to become a daily destination by bringing evergreen content to educate, inform, and support customers’ financial decisions. Ultimately, integrating MALKA’s content into MoneyLion will support the digital bank’s marketing and brand-building efforts.
“Through this acquisition, which we anticipate will be accretive and cash flow positive in 2022,” said MoneyLion Co-Founder and CEO Dee Choubey, “we will now be able to fully leverage MALKA’s capabilities so that the MoneyLion brand can truly live wherever our customers are investing their attention.” CMO Bill Davaris added, “This fundamental shift will allow us to own and not rent the relationships we are cultivating with new and existing MoneyLion customers.”
At face value, a tie-up between a digital bank and a content creation company seems a bit odd. The acquisition, however, can be seen as MoneyLion simply buying its own creative marketing and content department. No matter how you look at it, the acquisition is a hat tip to the new creator economy and speaks to how content-driven today’s consumers are.
MALKA will operate independently from MoneyLion and the company’s Founder and CEO Louis Krubich and Co-Founder and President Jeff Frommer will continue to lead daily operations. “This partnership will allow us to exponentially grow our creator network and engage with millions of more fans,” said Krubich.
MoneyLion launched in 2013 and offers a full-service platform that delivers mobile banking, lending, and investment solutions. Earlier this year the company teamed up with Zero Hash to launch the ability for users to buy, sell, and hold cryptocurrencies. The company went public on the New York Stock Exchange in September via a SPAC merger with Fusion Acquisition Corporation.
Alternative credit provider and digital bank Upgradeannounced a $280 million investment this week. The Series F round brings the company’s total funding to $600 million and boosts its valuation to $6 billion, which is almost double its last valuation of $3.3 billion in August.
The round was led by Coatue Management and DST Global with participation from Dragoneer Investment Group, Gopher Asset Management, G-Squared, Koch Disruptive Technologies, Old Well Partners, Ribbit Capital, Sands Capital, Ventura Capital, and Vy Capital.
Upgrade was founded in 2016 and offers a variety of low-cost personal loans and credit cards that come with rewards ranging from Bitcoin cashback to 3% cashback. Earlier this year the company debuted a checking account with a debit card that pays 2% cashback for common expenses.
The company differentiates its card, which is issued by Sutton Bank, from traditional credit cards by combining monthly charges into installment plans that the borrower repays over 24 to 60 months. Upgrade structures the repayment this way to get its users into the habit of paying down their balance every month and avoid getting trapped in a continuous cycle of debt.
The funding news comes four months after Upgrade closed its $105 million Series E round. Company CEO Renaud Laplanche said that the round “demonstrates Upgrade’s rapid growth and commitment to delivering innovative financial products that benefit consumers.”
The “rapid growth” Laplanche references has been seen in recent acclamations. Earlier this year the Financial Times selected Upgrade as the fastest growing company in the Americas and the Nilson Report recognized the Upgrade Card as the fastest growing credit card in America, placing Upgrade among the top 50 U.S. credit card issuers.
Since launching its credit card in 2017, Upgrade has delivered $10 billion in total credit to customers via the company’s credit cards and loan products. The majority of this credit has been issued this year alone; the company is on track to deliver $8 billion in credit in 2021.
Upgrade is headquartered in California with an operations center in Arizona and a technology center in Canada. The company is partnered with Cross River Bank and Blue Ridge Bank for credit lines and banking services, NYDIG for Bitcoin rewards, and Sutton Bank for card issuance.
Bank software innovator ebankIT and worldwide money transfer platform Wise (formerly Transferwise) announced today that Wise’s international money transfer service will be the first solution of its kind to be made available on the ebankIT platform marketplace. Relied upon by financial institutions to build up their digital banking service options, the marketplace will enable these firms to add the money transfer service to their offerings without having to integrate it separately on their own.
“We believe in a better future for banking with true omnichannel capabilities – and international transfers are an essential part of this,” ebankIT CEO Renato Oliveira said. “By bringing together Wise, ebankIT, and our clients, we are changing international transfers for everyday people across the world. We’re delighted to offer Wise platform to our clients, so they can instantly tap into Wise’s world-leading infrastructure.”
Wise Platform has 12 distribution partners and 18 banks in 11 countries using the technology, along with seven enterprises. The company notes that 40% of its transfers are delivered in less than 20 seconds, and Wise charges no hidden fees by way of exchange rate mark-ups or other calculations. On average, Wise’s international money transfers are as much as eight times less expensive than those offered by traditional money service firms and other providers.
“For too long, international transfers have been slow, inconvenient, and blighted by traditional providers charging high, hidden fees,” Wise Head of Product Steve Naudé said. “It’s time for change. We aim to set a new global standard for international transfers across the industry. We’re thrilled to be working with ebankIT, a company that shares our vision. Together, along with ebankIT’s network of banks and financial institutions, we can help drag international transfers into the twenty-first century.”
Rebranding as Wise in February, the company formerly known as Transferwise has been a Finovate alum since its appearance on stage at FinovateEurope in 2013. In the years since, the London-based company has reached more than eight million customers worldwide and transfers more than $7.5 billion in customer funds every month. Wise’s technology currently comes pre-integrated in a number of core banking platforms including those from Temenos, Mambu, and Thought Machine.
The company went public on the London Stock Exchange this summer, earning a market valuation of $11 billion. Last month, Wise announced an integration with The Orchard, a subsidiary of Sony Music that specializes in music distribution and artist services. The partnership offers the company a more streamlined way for music labels to make royalty payments to musicians in multiple countries and currencies.
A Finovate Best of Show winner in 2019, ebankIT was founded in 2014 and is headquartered in Porto, Portugal. The company’s core-agnostic Omnichannel Digital Banking platform was recognized last year in both Gartner’s Market Guide for Multichannel Digital Banking Solutions and its Market Guide for Digital Banking Platforms. In partnership with Celero, a Canada-based solutions integrator for credit unions and other financial institutions, ebankIT’s technology this year has powered digital transformations at institutions such as Swan Valley Credit Union, 1st Choice Savings and Credit Union, and Entegra Credit Union.
Float, a Canada-based startup that offers a corporate card and spend management solution, landed $30 million (C$37 million) in funding this week. The Series A round was led by Tiger Global and brings the company’s total funding to $34 million (C$42 million).
The funding will help Float with its mission to deliver an end-to-end spend management platform for SMBs. “We want this platform to enable businesses and teams to focus on investing in their growth and eliminate the need to use different banking and software tools to make day-to-day payments… Float’s mission is to simplify spending for companies and teams,” the company explained in a blog post.
Float was founded in 2019 to offer Canadian SMBs a high-limit, no personal guarantee corporate card that is available in three business days or less. This turnaround is impressive when compared to the average four+ week wait time most businesses face to receive their corporate spending cards. Businesses can set custom spending limits, assign cards to employees, and review and approve transactions in real time.
In addition to the card capabilities, Float also offers spend management software that natively integrates with accounting software such as QuickBooks and Xero. The dashboard helps employers track real-time spending and provides an overview of individual, departmental, and categorical spending.
The investment comes at a good time for Float, which has seen significant growth since launching to the public in March of this year. The company now has hundreds of small business clients and continues to experience increased engagement. Float’s total payment volume has increased ~20x since June and its average monthly customer spend has increased more than 6x since March.
Float offers a freemium pricing model with varying features. All tiers come with 1% cashback, 0% FX fees, unlimited users, automatic top-ups, and a $100,000 spending limit. The paid tiers provide custom integrations, team management, and more.
BM Technologies (formerly known as Bank Mobile) has agreed to merge with Seattle-based community lender First Sound Bank for $23 million. The combined entity will be called BMTX Bank and will serve customers across the country digitally while maintaining a community banking division that will continue serving customers in the greater Seattle market.
“This is a thrilling milestone for BM Technologies and is a major step forward in executing our vision to create a disruptive FinTech bank that combines the best of financial technology with a strong and compliant FDIC-insured institution,” BM Technologies, Chair, Founder, and CEO Luvleen Sidhu said.
BMTX will pay up to $7.22 in cash for each share of First Sound Bank common stock, which amounts to approximately $23 million. Subject to regulatory approvals and customary closing conditions, the strategic merger is slated to close in the second half of 2022. The deal is expected to add significantly to the combined company’s revenue, EBITDA, and earnings trajectory over the next one to three years. Sidhu said that the strategic merger will enable BMTX Bank to offer a variety of new services including direct to consumer and small business operations, marketplace lending, robo-advisory, and blockchain-based payment systems.
“As one of the largest digital banking platforms in the country with approximately 2 million accounts, this merger allows BMTX to lead a new wave of financial innovation by enhancing its focus on technology, inclusion, easy-to-use products, and customer education with the mission of creating ‘customers for life,'” Sidhu explained.
Sidhu will serve as Chair and CEO of BMTX Bank, and will be directly responsible for digital banking initiatives. First Sound Bank President and CEO Marty Steele will serve as COO of BMTX Bank and will lead the company’s community banking division.
“As a local bank, we remain committed to our community and are excited about the opportunity to leverage BMTX’s innovative digital banking technology, Banking-as-a-Service business model, low-cost deposit funding, and better access to the capital markets in order to scale our SBA, commercial and private banking, mortgage, and other business lines,” Steele said.
Founded in 2004 with the largest initial capital base of any de novo bank in the Pacific Northwest at the time, First Sound Bank provides commercial banking services for SMEs, not-for-profit organizations, entrepreneurs, and professional service firms in the Puget Sound region. Headquartered in Seattle, Washington, First Sound Bank has approximately $150 million in assets.
Formerly known as Bank Mobile, BM Technologies was launched in 2015 with a goal of providing a simple, affordable, and financially empowering, digital-first banking experience. The company went public via SPAC at the beginning of the year, listing on the New York Stock Exchange under the ticker BMTX. BM Technologies currently has a market capitalization of $145 million.
The company’s strategic merger announcement comes on the heels of BM Technologies’ Q3 results. Among the quarter’s highlights, BM Technologies reported that serviced deposits topped $2 billion for the first time. The company also earned recognition in the 2021 Finovate Awards in September, winning Best Fintech Partnership courtesy of its collaboration with T-Mobile.
To learn more about BM Technologies, check out our Fireside Chat with Luvleen Sidhu from FinovateFall 2021 in New York.
Mexico-based Storilanded $200 million this week in combined debt and equity. The investment, which bring the company’s total funding to almost $250 million, will help the fintech provide financial services to its region’s underserved customers.
The $125 million in equity was co-led by GGV Capital and GIC with contributions from General Catalyst, Goodwater Capital, Tresalia Capital, Lightspeed Venture Partners, Vision Plus Capital, BAI Capital, and Source Code Capital. The $75 million in debt financing comes from Community Investment Management.
The investment echoes Stori’s success in the region. The company has become one of Mexico’s top issuer of new credit cards since February of this year. In fact, more than 2 million Mexicans have applied for a Stori credit card, and that number has grown by more than 10 times in the last twelve months.
And there is still plenty of room for growth. The broader Latin American region has 400 million underserved consumers. “Our mission – empowering financial inclusion for millions of hard-working people – is amazingly meaningful and challenging at the same time,” said Stori CEO and co-founder, Bin Chen. “We are progressing at an unprecedented pace by combining technology, machine learning, data-driven underwriting and an intuitive mobile-based user experience. A lot more will come in our journey to become a top consumer financial franchise in Latin America.”
Stori plans to use today’s funds to triple in size and broaden its product offerings to better suit customer needs, ultimately providing much-needed financial services to Mexico’s underserved citizens. The fresh capital will also help Stori grow its team and double down on training and development opportunities.
While Stori is focused on the Mexico region, the company boasts a global team with offices in Washington D.C., Mexico, and Asia. “Our success since launch is a direct result of having a team who is passionate about our mission to empower upward financial mobility for the underserved population,” said company Co-founder Marlene Garayzar.
Wealthtech company Atomicannounced its company launch along with a $25 million in a Series A funding round today. The round, which was co-led by QED Investors and Anthemis with participation from Softbank and Y Combinator, will help fuel the company’s investing API that allows fintechs and banks to integrate investing into their existing products.
With Atomic’s API, companies can launch investing experiences such as direct indexing, ESG investing, and multi-currency trading across 60 global markets with no account minimums. The “investing-as-a-service” nature of the new offering means that companies can launch investing tools in a matter of weeks without relying on in-house experiences. In fact, Atomic takes care of not only the investing experience, but also the details around regulations, brokerage operations, and compliance.
“What we see is that fintechs and other consumer-facing companies want to offer savings and investment, but most have come to market with very limited product offerings — only single stock trading or only ETF investing,” said QED Investors Partner Amias Gerety. “Atomic provides cutting edge solutions so that their partners can offer both of these products easily, but also offer advanced features like ESG, direct indexing, and tax loss harvesting that are usually only available for accounts with hundreds of thousands of dollars in them.”
Atomic helps companies retain customers by broadening their existing offerings to include investing– a financial tool that generally creates long-term customer loyalty. “Any fintech or bank that wants to become their end-customers’ primary financial relationship will need to offer investing on their platform to remain competitive,” said Atomic CEO David Dindi. “As an accelerant in the rapidly evolving ecosystem of unbundled financial services, Atomic enables these businesses to offer investing in a frictionless way as a means to deepen their relationships with customers.”
Among Atomic’s client base are fintechs such as Upside, a student loan innovator. Upside is leveraging Atomic’s API to build a wealth management offering that allows its users to refinance their student loans and reinvest the savings.
Dindi, along with the company’s CTO Marco Alban are both Stanford graduates and serial entrepreneurs.
