Funding

CurrencyCloud’s Grant Boosts Total Funding Over $80 Million

By Julie Muhn (@julieschicktanz) Posted on

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Just over a month after announcing a $40 million Series E funding round, international payments platform Currencycloud received another windfall. The company landed a $12.2 million (£10 million) grant as a part of the Banking Competition Remedies (BCR) program. This week’s funds bring Currencycloud’s total investment to more than $80 million.

Part of the BCR’s Capability and Innovation Fund Pool C, the award aims to include lending, international payments, and local payments services to SMEs in the U.K. The goal fits well with Currencycloud’s API offerings that help businesses accept, pay, and convert foreign currencies. The company’s tools also help businesses manage balances, send notifications, set permissions, and compile reports.

Currencycloud CEO Mike Laven said that the company plans to use the funds to “accelerate product development for SME’s, particularly in the area of collections.” He added, “We will also work on distribution partnerships that enhance our ability to deliver to SMEs. Our current U.K. eco-system of over 150 FX brokers, money transfer firms, payment service firms and banks service 1,000’s of U.K. SMEs with payment services today. Our intent is to widen access to affordable FX and international payments for U.K. SMEs, targeting 40,000 SMEs using our platform by 2024.”

Founded in 2012 and headquartered in London, Currencycloud counts fellow Finovate alums Azimo, Klarna, Revolut, and Fidor as clients. The company can make domestic and international payments in 38 currencies to 180+ countries. Currencycloud most recently appeared at FinovateFall 2016 where it debuted its Payment Engine. 

Scalable Capital Raises $28M

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Munich-based robo-advisor platform, Scalable Capital, has raised a further €25 million in growth capital, two years after BlackRock invested €30 million, writes Jane Connolly of Fintech Futures (Finovate’s sister publication).

Handelsblatt reports that HV Holtzbrinck Ventures and Tengelmann Ventures also took part in this round.

Founded in 2016, Scalable aims to target high-earning young professionals, who invest an average of €35,000. Customers can answer a list of questions about their experiences and objectives, to receive a recommendation for a portfolio of listed index funds (ETFs).

Although the amount raised is relatively low for the industry, Scalable Capital founder Erik Podzuweit said, in the Handelsblatt Disrupt podcast: “Actually, we did not need the money, because unlike some other business models, each customer pays for the offer.”

He added: “So we took the money and can now grow a little faster and at the same time still keep something in reserve.”

BlackRock acquired just under a third of the company two years ago. Despite the capital increase, the founders still have ownership of more than a quarter of the business.

Scalable Capital demonstrated its technology at FinovateEurope 2016. Last month, the company teamed up with Futurae to add multi-factor authentication to its investment platform. This spring, the company was named to the Wealthtech 100.

King Klarna: New Investment Boosts Valuation to $5.5 Billion

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An investment of $460 million in Swedish e-commerce payments innovator Klarna takes the company’s valuation to $5.5 billion, and makes it the largest private fintech firm in Europe. The funding will help fuel Klarna’s international growth, especially in the United States, where it has been gaining new customers at a rate of six million a year.

Dragoneer Investment Group led the round. Commonwealth Bank of Australia, HMI Capital LLC, Merian Chrysalis Investment Company Limited, Första AP-Fonden (AP1), IPGL, IVP, and funds and accounts managed by BlackRock also participated. Combined with the financing from a round this spring, the investment gives Klarna more than $1.2 billion in total capital.

For company CEO and co-founder Sebastian Siemiatkowski, the funding comes at a moment of great opportunity for fintechs like Klarna that are innovating in the area of consumer finance. “This is a decisive time in the history of retail banking,” he said. “Finally, transparency, technology and creativity will serve the consumer, and there will be no more room for unimaginative products, non-transparent terms of use or lack of genuine care of ones customers.”

Klarna’s Shop Now Pay Later approach to e-commerce enables consumers to pay for purchases at leading, brick and mortar retailers as well as with online merchants, with a variety of interest-free, no-fee financing offerings. These include a four installment payment option that charged every other week to the customer’s credit or debit card, and 30-day payment period that begins once the item is shipped or received.

Klarna has more than 60 million shoppers using its offerings, and 130,000 retailer partners around the world. Richard Watts of Merian Chrysalis Investment Company credited Klarna with providing its merchant partners with “considerable improvement in customer engagement and sales.” In fact, Klarna reports that merchants that are offering its four installment payment plan have experienced a 68% increase in average order value, a 44% increase in conversion v.s. cards, and a 21% higher purchase frequency.

“Klarna is one of Europe’s great fintech success stories and the company continues to develop truly innovative payment solutions,” Watts said.

The funding news for Klarna arrives amid a flurry of new service offerings, such as making its Shop Now Pay Later option available in-store, as well. It has also been a big year for products, from the launch of its global customer authentication platform to unveiling of its open banking platform. 2019 has also been a busy year in terms of partnerships: Klarna joined global fashion retailer ASOS in an expansion to the U.S., teamed up with U.K. fashion brand Superdry, and partnered with Canadian e-commerce and in-store point-of-sale financing company PayBright.

Founded in 2005 and headquartered in Stockholm, Sweden, Klarna demonstrated its platform at FinovateSpring 2012.

Bambu Brings in $10 Million

By Julie Muhn (@julieschicktanz) Posted on

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Digital wealth technology company Bambu is bringing home the bacon today in the form of Series B funding. The $10 million round comes courtesy of three-time investor Franklin Templeton and new investor PEAK6 Strategic Capital, both of which co-led the round.

The Singapore-based company will use the funds to expand its reach of B2B clients, an audience Bambu sought out while a multitude of players in the space were taking a direct-to-consumer approach. And during the four years since launch, Bambu has made sizable gains in this market. Originally limited to Asia– the company marketed itself as Asia’s Premier B2B Roboadvisory– the company has since grown its client base into international markets. Bambu landed its first U.S.-based client and opened a new London office in March of last year.

As part of its B2B expansion, Bambu will target new segments in the financial services vertical and build teams in offices across the globe. As a part of that effort, the company will demo its technology at this year’s FinovateFall conference in New York, which kicks off September 23. Today, Bambu provides solutions to more than 15 financial institutions across the U.S., Europe, UAE and Asia including Standard Chartered, Refinitiv, and Connect by Crossroads.

“We are committed to working with a global client base to digitize saving and investing so it’s easier and more accessible to investors everywhere. We welcome PEAK6 together with the continued support from Franklin Templeton in this round,” said Bambu founder and CEO Ned Phillips. He added, “This is a strong confirmation that we have built a unique business and platform for the global market. We see growing demand across all markets, and we are increasing our ability to serve clients globally.”

Bambu’s cloud-based technology helps wealth managers bring automated investment services to their clients. The three-tiered approach includes the company’s Intelligent Advisor, a private banking product that creates efficiencies for relationship managers; White Label Robo, a white-labeled solution that helps asset managers create a personalized portfolio and risk profile for clients; and the BambuAPI developer hub, which offers developers their choice of modules to integrate into their own solutions.

With 70 employees working across Singapore, London, Hong Kong, San Francisco, and Johannesburg, Bambu has raised a total of $13.4 million in funding. The company won Best of Show for its demo at FinovateAfrica last year. Earlier this year, Bambu earned a spot on Fintech News Singapore’s list of 29 Hottest Fintechs in Singapore 2019.

Vymo Reels in $18 Million for its Intelligent Sales Assistant

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Vymo, the company that helps sales professionals #DoMore when it comes to managing leads and maximizing opportunities, just got a little help of its own. The company announced this week that it successfully closed its Series B round, raising $18 million to grow its business in the U.S. and around the world.

The Series B was led by Emergence Capital and featured participation by existing investor Sequoia India, which led the company’s $5 million Series A in 2016. Vymo’s total equity now stands at $22 million.

“Just as Veeva changed the game for pharmaceutical sales reps, Vymo aims to enable financial sales reps with a platform tailor made for their needs,” Emergence Capital Partner Jake Saper wrote at the firm’s blog discussing the investment. “Vymo is mobile-first, geo-aware, and makes use of contextual data to make targeted suggestions to reps on next best actions like which client or prospect to prioritize.”

Saper praised Vymo as a company that can help sales teams navigate diverse client bases and challenging regulatory environments as they build quality, personal relationships with their customers. He highlighted the company’s partnerships with Allianz, AXA, and Generali, and the high number of registered users of Vymo’s technology – more than 75% – who log on to the platform and take action on a daily basis.

Founded in Bangalore, India, and currently based in New York City, Vymo made its Finovate debut last year at FinovateAsia, demonstrating its Personal Assistant for Sales. The technology boosts the effectiveness of sales professionals by leveraging AI to detect the sales professionals actions automatically, predict the next best steps for the sales rep to pursue, and coach the rep on how to achieve the best outcomes.

The intelligent assistant learns from the best performing sales reps in the organization, and has established a positive revenue impact of 3% to 10% in sales productivity metrics such as conversions, turnaround time, and sales activity per opportunity. More than 100,000 sales reps across 50+ companies and institutions use Vymo to make their sales efforts more productive.

Earlier this month Vymo was featured in Nikkei Asian Review, which took a look at the use of the company’s intelligent assistant by sales professionals in Japan. In May, the company announced a partnership with Microsoft that will help grow the market for Vymo’s intelligent personal assistant solution. Vymo picked up the FICCI (Federation of Indian Chambers of Commerce) Award for Innovation in Artificial Intelligence and Data Analytics in March, and began the year with a pair of partnership announcements, teaming up with Vietnam’s FE Credit in February and Zurich Topas Life in January.

Sezzle Raises $30 Million in IPO

By Julie Muhn (@julieschicktanz) Posted on

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Alternative ecommerce payments company Sezzle made its public debut this week. The Minneapolis, Minnesota-based company listed on the Australian Stock Exchange (ASX) under the ticker SZL.

Within two hours of listing, Sezzle was being traded 82% above its opening price of $0.83 (AUD $1.22). The company was ultimately able to raise $30 million on its first day of trading. Sezzle will use the funds to attract more retailers to its platform, which currently boasts just over 5,000 merchants. The company will also enhance support for its 430,000 clients.

Why Australia? Sezzle is the first one to admit it has no plans of operating in Australia in the near future. The company’s reasoning for listing on the ASX is that the country’s investors are more familiar with Sezzle’s buy now, pay later model since one of its rivals, Afterpay, is based in Melbourne. Sezzle CEO Charlie Youakim explained this in further detail during an interview with Bloomberg yesterday.

Sezzle allows customers to split their payments into multiple installments

Sezzle’s technology, which allows customers to split their ecommerce purchases into four installments with only 25% down and no fees, is only available for shoppers in the U.S. and, as the company just announced this week, Canada. It is also available for merchants regardless of their location across the globe as they seek to expand their North American customer base.

When asked about international expansion, Youakim told Bloomberg in an interview, “The product lends itself to expanding internationally,” he said. “We’re researching new markets but the vast majority of our focus is in North America.”

The company makes money not by billing users, but by charging merchants, which face a 6% + $0.30 fee on each transaction. And the model seems to be working. From March 2018 to March 2019, Sezzle’s merchant sales grew by 16x to $28.3 million. In exchange for the fee, merchants are paid upfront and don’t inherit the risk of the customer not paying back all of their installments.

Sezzle demoed its alternative payment platform at FinovateFall 2018. Prior to today’s IPO the company had raised almost $117 million.

Kony Secures $37 Million in Financing from BMO

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An infusion of $37 million in debt financing from BMO will help cloud-based digital banking and low-code platform company Kony “accelerate growth” in its two signature solutions: Kony DBX, the company’s digital banking technology, and Kony Quantum, its low-code development platform. The financing, courtesy of BMO’s Technology and Innovation Banking Group, adds to the more than $115 million in funding Kony has raised to date.

“Finding a strong and committed capital partner who understands digital is an important complement to our market-leading IP and aggressive growth agenda in both digital banking and multi-channel low-code development,” said Kony chairman and CEO Thomas E. Hogan.

BMO Bank of Montreal managing director of technology and innovation banking Devon Dayton underscored the critical role of “leveraging digital as a strategic function” for all businesses regardless of size. “Kony’s solution has enabled their clients to accelerate their digital transformations,” Dayton said. “We look forward to continuing this relationship and working alongside them to help them accelerate their growth.”

Kony’s financing news comes just a few weeks after the company was named a Leader by Gartner in its 2019 Magic Quadrant for Multiexperience Development Platforms (MXDP) report. This marked the expansion of the category from its previous mobile app development platform (MADP) designation to reflect what Gartner called “the evolution of MADPs to serve expanding app use cases and development requirements.”

Kony is well positioned to take advantage of this broader way of looking at development platforms. In addition to this year’s recognition from Gartner, the company was named a Leader in The Forrester Wave digital report on development platforms last year, as well as a Leader in the firm’s report on low-code development platforms for this year.

Kony demonstrated its retail banking solution at FinovateFall 2017. Founded in 2007 and headquartered in Austin, Texas, the company has been on a strong, partner-making pace in recent months. Kony teamed up with Qualifacts in May to power the behavioral healthcare solution provider’s mobile app, CareLogic. In April, Kony partnered with Micronotes, a firm that leverages AI to provide marketing automation for digital banking. That same month, the company announced a collaboration with fellow Finovate alum, IDology, to integrate new authentication services into Kony DBX digital banking solutions.

Paysend Garners $10.6 Million in Funding

By Julie Muhn (@julieschicktanz) Posted on

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Cross-border remittance startup Paysend has received a money transfer of its own this week. The London-based company landed $10.6 million (£8.5 million) in Series B funding, bringing its total raised to $30.7 million.

There’s no word on an updated valuation but before today’s round, the company was valued at $155 million.

The investment comes courtesy of GVA, which contributed almost $5 million (£3.95 million), as well as a Seedrs crowdfunding campaign that brought in $5.6 million (£4.6 million). Launched last month, the Seedrs campaign garnered contributions from investors, including Plug and Play and Digital Space Ventures, which co-led the round.

Regarding company’s decision to crowdfund the round, Paysend CEO Ronald Millar said, “This funding round has been the next step in our journey to create money for the future, and we’ve been delighted that we’ve been about to open it up to our customers in order to give them the opportunity to join us on the exciting next phase of the Paysend journey.”

Paysend, which demonstrated its Global Account at FinovateSpring 2018, competes with the likes of Transferwise and CurrencyFair to help users request money from 50 countries and send money across 70 countries. On a monthly basis, the company facilitates more than 2 million transactions totaling $55 million for its 900,000 users.

The company recently released Pays XDR, its own digital currency. Pays XDR is a stable coin backed by cash reserves, matched to the proportion of the International Monetary Fund’s Special Drawing Rights.

Adding to its already busy year, in May Paysend launched Paysend Link, an app that allows users to send money to anyone with just their phone number. Fund recipients can immediately transfer payments they receive to their Mastercard, Visa, or UnionPay card. The money is immediately available to use or to withdraw.

Gusto Raises $200 Million with $3.8 Billion Valuation

By Julie Muhn (@julieschicktanz) Posted on

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Payroll, benefits, and HR platform Gusto just landed $200 million in funding, a slew of new investors, and a valuation of $3.8 billion. The Series D round almost doubles the $2 billion valuation the San Francisco-based company received in December of last year after closing $140 million in funding. Gusto’s total funding now sits at $510 million.

The new investors, Fidelity and Generation Investment Management, were joined by existing investors T. Rowe Price Associates, Dragoneer, General Catalyst, CapitalG, 137 Ventures, Y Combinator Continuity, and Emergence Capital. Gusto CEO Joshua Reeves said that Gusto selected the group “based on their long-term perspective.” He added, “These investors are committed to our view of creating a durable and sustainable business, and their investments will fuel our ongoing creation of equitable solutions and inclusive economic growth for everyone.”

Gusto will use the funding to further its research and development efforts, specifically in the fintech and healthcare arenas. The company also plans to grow its workforce, which currently sits at more than 1,000 employees spread across Denver, San Francisco, and New York.

Along with the funding, Gusto has onboarded its first independent board member, Anne Raimondi (pictured), former SVP of operations at Zendesk.

Gusto has added two notable features to its platform recently, including Time Tracking, which syncs hourly employees’ time directly to the company’s payroll in order to properly calculate time off and holidays; and Flexible Pay, which allows employees to select when they prefer to receive their paycheck. This year, the company formed partnerships with ScaleFactor and Trainual to deliver accounting and offer new hire training, respectively.

As for what’s next, it’s hard not to wonder about an IPO. We interviewed Reeves for a blog post titled M&A is the New IPO last month. When asked about the company’s plans, Reeves said, “There are pros and cons to being a public company, and we believe that today, the benefits of Gusto staying private outweigh the benefits of being public.” He added, “An IPO isn’t our end-goal; instead, it’s creating a world where work empowers a better life. We currently serve more than 1% of all employers in the U.S., which is an accomplishment we’re incredibly proud of, but we realize we still have a lot more work to do. Building Gusto to its full potential is a multi-decade mission for me.”

Gusto launched in 2012 under the name ZenPayroll. At FinovateSpring 2014, Reeves showcased the company’s flagship payroll solution while smiling throughout the entire seven minute demo.

DefenseStorm Locks in $15 Million in Funding

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Cloud-based cybersecurity innovator DefenseStorm closed a $15 million equity funding round this week. The Series A was led by Georgian Partners, a growth equity firm with an emphasis on companies that leverage applied and conversational artificial intelligence. In addition to the new capital, which takes DefenseStorm’s total funding to more than $29 million, the company will collaborate with the Georgian Impact team to accelerate the adoption of these technologies.

“DefenseStorm is growing rapidly, and our primary goal is not only to ensure that we take care of both our current and potential customers, but also that we invest in our employees and the innovation they continue to bring to the table,” DefenseStorm CEO Harold Brewer said. “We are thrilled to have the support of the Georgian Impact team and look forward to a lasting partnership benefitting the entire cybersecurity community.”

As part of the investment, Georgian Partners Managing Partner Justin LaFayette will join DefenseStorm’s board of directors. Chief Technology Officer for Georgian Partners Mads Mihailescu praised DefenseStorm’s “deep domain expertise” and noted that the partnership has “already identified a number of opportunities to further accelerate new product capabilities.”

DefenseStorm demonstrated its PatternScout anomaly detection engine at FinovateSpring 2017. The technology uses advanced machine learning to identify suspicious behavior patterns, and provides automated alerts to enable administrators to stop cyberattacks before they spread.

The company is also an alum of our developers conference, having presented a discussion on best practices for fintechs in securing the cloud, Cloud Security Fundamentals, at FinDEVr Silicon Valley 2016.

Named a Top 40 Innovative Technology Company by the Technology Association of Georgia at the beginning of the year, DefenseStorm announced a partnership with Heritage Trust Federal Credit Union in April. Per the agreement, DefenseStorm provided the Charleston, South Carolina-area credit union with a strategic technology platform to enable it to proactively manage cyberexposure and risk. Other recent partnerships announced by DefenseStorm include a collaboration with Alogent and a preferred partner pact with NAFCU.