Funding

Cortera Raises $10 Million to Enhance Risk Scoring

By Julie Muhn (@julieschicktanz) Posted on

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B2B credit scoring company Cortera landed $10 million in funding this week, bringing its total capital raised to just over $578 million in combined debt and equity. Investing in the Florida-based company are Hearst’s Fitch Group Financial Venture Fund, who led the round, as well as existing investors Volition Capital, Battery Ventures, Allen & Company, and Tomorrow Ventures.

“We are passionate about fueling profitable business growth in the U.S.,” Cortera CEO Jim Swift said. “For too long, the flow of capital has been hamstrung by the need for more complete and timely insights into private companies. It is exciting to be at a point of network coverage where businesses now have a powerful alternative to traditional sources.”

Founded in 1993, Cortera gathers insights on the purchase and payment behavior of more than 20 million public and private U.S. businesses. The company leverages this data to create analytics such as new customer risk assessments, customer portfolio risk monitoring, supplier risk management, customer segmentation, insurance underwriting, customer profitability modeling, and loan-default prediction. Essentially, the data help businesses make decisions about their customers, prospects, and suppliers, and minimize risk.

Hearst’s Fitch Group Financial Venture Fund Managing Director Shea Wallon, who will join Cortera’s board of directors, said, “Cortera’s unique business information and analytics provide an alternative view into the credit risk of private businesses where traditional financial statements are not reliable or easily available.”

Cortera demoed a network where businesses can share payment experiences at FinovateSpring 2010. Earlier this week, the company announced its trade credit data will be available in Moody’s Analytics RiskCalc small business solution. Last spring, Cortera scored LexisNexis as a client, blending its B2B trade credit with LexisNexis’ risk solutions alternative data.

KPMG Takes Minority Stake in Alternative Credit Scoring Specialist AdviceRobo

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Alternative credit scoring startup AdviceRobo announced today that KPMG has acquired a minority stake in the company. The amount of the investment was not disclosed.

KPMG Head of Advisory Rob Fijneman called AdviceRobo a “front runner” in credit risk management. He added that the partnership would “enable us to add these types of AI-based predictive behavioral models to our services for lenders,” enhancing credit risk models and lowering costs. The partnership will also enable AdviceRobo to take advantage of KPMG’s expertise in a wide variety of areas including risk management, compliance and regulation, Big Data, and analytics.

AdviceRobo’s approach to credit risk management focuses on the insights available from the non-financial and behavioral data of would-be borrowers. The company’s psychographic risk scoring can be used to access the creditworthiness of applicants for products including loans, mortgages, and credit cards. The technology is especially valuable for lenders working with customers from historically underbanked communities, whose thin credit files make them poor candidates for traditional financing. AdviceRobo CEO Diederick van Thiel estimates that there are more than four billion people around the world who fall into this category and said that technology can help financial services firms reach them.

“Our software enables lenders to target these underserved customers and streamline their credit processes,” van Thiel explained. “This stimulates prosperity and the economy. Moreover, our software has the potential to accelerate credit processes and identify the key risk signals of existing clients. For instance, the software can identify vulnerable consumers who will be at risk of defaulting on loans in the future.”

AdviceRobo demonstrated its CreditRobo solution at FinovateEurope 2016. CreditRobo leverages artificial intelligence to evaluate credit risk, providing early warnings on bad debt, default, pre-payment, and outflow; real-time behavioral data on the risk profile of the customer base; and real-time credit scoring for instant onboarding, renewal, and targeting of the underbanked, whether they are millennials or SMEs.

Founded in 2013 and headquartered in London, U.K., Amsterdam, and Paris, AdviceRobo serves clients in ten countries across Europe and Latin America. In April, AdviceRobo joined the BNP Paribas Plug and Play accelerator program, one month before the company was named to Insights Success’ 20 Most Innovative FinTech Solution Providers roster. Also this spring, the company announced a trio of new bank customers: Hungary’s OTP Group, Argenta of the Netherlands, and Banco Macro of Argentina.

A member of KPMG’s Fintech 100 Emerging Stars, AdviceRobo began the year with news that its Psychographic Credit Score solution would be available via Mambu’s Product Marketplace.

SynapseFI Raises $17 Million in New Funding

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SynapseFI is making public what insiders have known for months: the Bay Area banking platform provider closed a $17 million Series A late last year. Trinity Ventures and Core Innovation Capital led the round.

In a blog post thanking the customers who “build awesome products on top of us and pay our bills,” company CEO and founder Sankaet Pathak explained both what SynapseFI does and what he called “our super secret plan” to democratize banking.

“Our super secret plan is to build a better operating system for banking that is less expensive to maintain and easy to innovate on top of,” he wrote. “Then to change banking from a lending or transactions business to a SaaS business.” In order to do this, SynapseFI focuses on three areas: back office automation to lower per customer costs, vertical integration of all products and services, and behavioral economic research to help firms build consumer-friendly financial solutions.

“I am beyond excited for what lies ahead,” Pathak wrote. “The capital infusion is not just a testament to the team executing well; it is also a testament to the need for democratized financial access for all people – regardless if they hold ten dollars in their bank account, or ten million.”

Founded in 2015, SynapseFI demonstrated its white label loan issuance solution at FinovateSpring 2018. The solution provides origination and servicing of unsecured consumer and business loans, including customizable decisioning, automated compliance, and smart notifications. With a goal of simplifying banking, SynapseFI provides an intuitively-designed bank with more efficient, automated back office and access to key services for all customers.

SynapseFI began the year with news that it would support interchange processing for debit and credit card transactions. Last month the company announced new custodial accounts for escrow, payment, and crowdfunding applications, as well as a new multi-bank savings account offering that enables per user FDIC coverage of up to $16 million.

In May SynapseFI unveiled its first Crypto Wallet for Bitcoin (recently updated). The company began the year with the launch of its Design Lab, which helps developers improve the UX for their financial solutions.

CAN Capital Receives $287 Million Financing Facility

By Julie Muhn (@julieschicktanz) Posted on

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Small business lending solution company CAN Capital has accepted a $287 million financing facility from alternative asset manager Varadero Capital. This marks the second time Varadero Capital has facilitated funds for the New York-based company.

CAN Capital plans to use the funds to support growth, invest in talent and technology, and enhance the customer experience. “We look forward to utilizing this funding to expand our ability to provide access to capital for small businesses, enhance our technology stack, and continue to build a dedicated, customer-driven team,” said Parris Sanz, CEO of CAN Capital.

Additionally, the company reached a milestone this week, having provided small businesses access to more than $7 billion in funding through 190,000+ transactions. “Reaching $7 billion in working capital is a significant milestone for us. We are excited to use our deep experience and data to enable even more small business owners to grow with streamlined access to capital,” Sanz added.

Founded in 1998, CAN Capital has helped 81,000 small businesses ranging from restaurants to auto repair shops by offering capital for them to open new locations, purchase equipment, hire employees, and more. The company last demoed at FinovateFall 2013, where it showed off its mobile funding solution. Earlier this year, CAN Capital appointed Tom Davidson as Chief Financial Officer.

Deserve Raises $17 Million in Equity Funding

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Credit-building payment card innovator Deserve just closed $17 million in equity funding this week. Contributors to the round include new investor Sallie Mae, as well as existing backers Accel, Pelion, Aspect Ventures, and Mission Holdings. This brings the company’s combined debt and equity funding to $95.5 million.

The California-based company will use the funds to build out its platform and add partners to its reward programs. The company currently offers users deals with six partners, including Amazon Prime, T-Mobile, and Wikipedia.

Originally known as SelfScore, Deserve rebranded in 2017 to enhance its focus on serving college students and Generation Z. The company offers Mastercard-branded credit cards for young, financially underserved consumers and others with thin credit files. The cards are made to appeal to international students and others, such as the company’s Founder and CEO Kalpesh Kapadia, who have recently moved to the U.S. and are having difficulty accessing credit. When it came to applying for credit in the U.S., Kapadia told Business Insider, “I got rejected every time. It was mostly for credit cards and student loans, given that I didn’t have a credit card history in the country.”

Deserve has three card options: Deserve Edu, which offers student benefits such as 1% back on all purchases and a free subscription to Amazon Prime Student; Deserve Pro, which offers no foreign transaction fees and 1% to 3% back on purchases; and Deserve Classic, which is specifically designed to help users build their credit.

The company leverages non-traditional data such as current financial health, education history, future employability, and projected potential earnings. Deserve combines those factors into a machine learning algorithm to determine applicants’ credit eligibility. The company’s cards are open to U.S. citizens, green card holders, registered international students, and H1B or L1 visa holders.

Founded in 2012, Deserve demoed a consumer behavior analytics service at FinovateFall 2014 under the name SelfScore. The company’s accounts are issued by Utah-based Celtic Bank. In April, Deserve closed on $50 million in debt financing to drive growth in accounts receivables.

Diebold Nixdorf Receives $650 Million Capital Commitment

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Financial services, software, and hardware provider Diebold Nixdorf secured a commitment of $650 million in capital this week. The loan is coming from two unidentified, institutional lenders and repayment is due in August 2022.

The Ohio-based company will use the loan to acquire remaining shares of Diebold Nixdorf, repay debt, and fund its DN Now operational improvement plan. The loan is expected to be completed within the coming days.

Bloomberg reported earlier this month that the company may be experiencing a “potential liquidity crisis” and that “Diebold is trying to negotiate easier terms with its lenders, the second change in four months, to allow for greater leverage in its debt covenants.”

Diebold Nixdorf demoed on the Finovate stage alongside Zenmonics at FinovateFall 2014, showcasing an in-lobby terminal. Founded in 1859, the company is partnered with almost all of the world’s top 100 banks and most of the top 25 global retailers. Diebold Nixdorf’s employees help bring solutions to more than 130 countries.

Deutsche Bank Takes Equity Stake in Modo Payments

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Payments technology company Modo Payments announced this afternoon it received an equity investment from Deutsche Bank. The amount was undisclosed. Prior to today’s announcement, Modo had raised a total of $11.3 million since it was founded in 2010.

The German bank plans to leverage Modo’s technology to expand its digital business-to-business and business-to-consumer payments. Specifically, Deutsche hopes to extend its payment capabilities into non-traditional channels, such as the mobile wallets and peer-to-peer networks of Alipay, Paypal, M-Pesa, and WeChat.

John Gibbons, head of global transaction banking at Deutsche Bank, refers to payments as the “bloodline of banking.” In the press release, he noted that Modo will give Deutsche “more flexibility” in facilitating non-traditional transactions. “Going forward, we will be able to directly process payments to mobile wallets and app-based payment solutions,” Gibbons added.

“The Modo team is focused on doing the most good for the most people by reducing friction in payments. That is why we do what we do every day, and this partnership with Deutsche Bank is a great opportunity to work with one of the world’s largest payment providers that can implement our technology on a global scale and further our reason for being” said Bruce Parker, founder and CEO at Modo. “We’re excited to see where this relationship can take us and how we can continue creating interoperability between payment systems around the world.”

Modo exchanges payment data across platforms on behalf of banks, payment networks, and providers, enabling them to store, share, and track payment event data. The company presented at FinovateFall 2016, where it showcased its Modo Digital Payments Hub. Late last year, Modo appointed former CEO of Klarna North America, Brian Billingsley, as its Chief Revenue Officer. More recently, the company earned top honors at the ETA TRANSACT Payments Pitch-Off earlier this year.

Dublin’s Leveris Picks Up Investment from Link Asset Services

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Irish banking-as-a-platform innovator Leveris announced a strategic investment from Link Asset Services late last week. The amount of the investment was undisclosed, and adds to the $34.3 million (€30 million) in capital the company raised to date.

Leveris founder and CEO Conor Fennelly highlighted Link Group as the leading independent European debt servicer with “deep knowledge of the lending and loan administration industry.” Fennelly added that the two firms “share(d) a common vision” in helping FIs use innovative technology to “evolve(e) banking into a simpler, more personal experience for everyone.”

The new partnership gives Link Group access to a platform that will enable it to grow its banking and credit management business. Specifically, the company plans to use the platform to take advantage of what Robbie Hughes, CEO of Business & Credit Management at Link Asset Services, called “the broader banking universe” made accessible by new technologies. “The Leveris platform delivers enhanced user experiences without complexity, simply and efficiently,” Hughes said.

Leveris’ modular, platform combines full-service, digital retail banking functionality – including deposit-taking and card issuance – with a lending solution. With a fully-integrated back-end, middleware, and front-end, and built using open standards, APIs and protocols, the solution makes it easy for FIs to integrate with third party apps and services. Leveris’ platform serves the needs of both traditional and challenger banks, as well as mortgage, personal, SME, and auto finance lending firms.

Founded in 2014, Leveris demonstrated its Leveris Lending solution at FinovateEurope 2017. In June, the company reported that it was “deep into a pan-European digital retail bank implementation,” having just “delivered a completely digital mortgage solution for a large BPO in the Benlux region”. This spring, the company announced an integration with P2P investment platform, Bondster Marketplace.

Named to the FinTech 100, and honored by the Irish Fintech Awards last fall,  Leveris is headquartered in Dublin, Ireland. The company maintains research capabilities in the Czech Republic and Belarus.

Behalf Brings in Funding from Visa

By Julie Muhn (@julieschicktanz) Posted on

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Alternative small business lending platform Behalf has benefitted from its ties with Visa this week. The New York and Israeli-based company announced it landed an undisclosed amount of funding from the payments giant, marking Visa’s first investment in an Israeli company.

The investment will be added to Behalf’s previous total funding of $306 million in combined debt and equity. As part of today’s deal, Visa will have access to Behalf’s small business clients to market its tokenized Visa Virtual Card, a payment solution that offers businesses instant financing for business purchases. Visa will begin marketing the card in the U.S. and expand to more markets later this year.

“Our network of B2B merchants can fit Behalf seamlessly into their eCommerce flow, receive payment immediately and provide their business customers with more buying power and flexible payment options at checkout,” said Benjy Feinberg, Behalf CEO. “We are proud to partner with Visa with the goal of making purchases easier.”

The partnership is part of Visa’s strategy to promote its products through collaborations with startups and fits with the company’s commitment to invest up to $100 million in fintechs. Shahar Friedman, acting general manager for Visa in Israel, described small businesses as being “the backbone” of the global economy. “This partnership is a result of a close collaboration between the Visa Innovation Studio Tel Aviv and the dynamic Israeli start-up ecosystem to bring the power of the VisaNet global network to promising young companies in Israel such as Behalf,” he added.

Founded in 2012, Behalf offers short-term purchase financing for small-to-medium-sized businesses (SMBs). Unlike other alternative SMB lenders such as Kabbage or OnDeck, Behalf does not issue funds directly to the SMB. Instead, the startup pays the small business’ vendors on the SMB’s behalf. Having flexibility in repaying their suppliers helps merchants increase their production and ultimately grow their business.

Feinberg showcased Behalf’s vendor payment platform at FinovateFall 2014. Since then, the company has partnered with FinWise bank to offer SMB clients a broader range of financing solutions and, earlier this year, secured $150 million in debt financing.

Wonga Raises $13 Million in New Funding

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Accel Partners and Balderton Capital have pitched in to help U.K.-based payday lender Wonga with a cash infusion of nearly $13 million (£10 million). The capital will be used to help Wonga satisfy what the company’s spokesperson called a “marked increase” in compensation claims for legacy loans from claims management companies.

“Wonga continues to make progress against the transformation plan set out for the business,” a spokesperson for the company said in a statement to Sky News. However, a rise in the number of claims on old loans, those taken out before the current management team took over in 2014, encouraged the company to seek additional financing.

“As a result,” the Wonga spokesperson explained, “the team has raised £10m of new capital from existing shareholders, who remain fully supportive of management’s plans for the business.”

Before the new capital, Wonga had an estimated valuation of $30 million (£23 million). In 2014, Wonga wrote off £220 million in debt for 330,000 customers as part of a review of its lending practices and the implementation of new affordability checks. The company has since attempted to diversify its business to include more flexible loan solutions such as its three- and six-month Flexi Loans. Rates remain high for Wonga products, with published representative rates north of 1,286% APR. Last year, Wonga also launched its Cash Smart personal finance education portal, which provides free information on debt and borrowing, savings, and budgeting.

To help shore up its balance sheet, Wonga has sold assets like its Everline business to small business lender Ezbob. Last year, the company sold Billpay, the German online payment provider it acquired in 2013, to Klarna for $75 million.

Founded in 2006, Wonga demonstrated its iPhone app at FinovateFall 2010. Tara Kneafsey is CEO.