More Than $975 Million Raised by 15 Alums in Q2 2020

Finovate alums raised more than $975 million in equity funding in the second quarter of 2020. The sum represents investments received by 15 companies that have demonstrated their technologies at our conferences, and includes three fundings in which the amount of the investment was not disclosed.

This year’s total is a retreat from the past two years’ totals, both in terms of amount raised and the number of alums reporting equity funding. In some respects, Q2 2020’s fundraising total “fills the gap” from the big jump in funding from Q2 2017 to Q2 2018.

Previous Quarterly Comparisons

  • Q2 2019: More than $1.8 billion raised by 29 alums
  • Q2 2018: More than $1.5 billion raised by 25 alums
  • Q2 2017: More than $726 million raised by 25 alums
  • Q2 2016: More than $510 million raised by 23 alums

While total investment for Q2 2020 was lower than it was in the previous year’s Q2s, it is notable that seven of the top ten fundings were investments between $150 million and $100 million. In many instances, one sizable investment will be responsible for a significant amount of a quarter’s investment total. Consider the boost Sofi’s $500 million funding provided in Q2 2019. The large sum sent that quarter’s total soaring to a new record Q2 high. By comparison, this year’s high number of low, nine-figure fundings comes across as a welcome shift in the distribution of VC wealth.

Top Ten Equity Investments for Q2 2020

  • EVO Payments: $150 million
  • Marqeta: $150 million
  • BioCatch: $145 million
  • AvidXchange: $128 million
  • Stash: $112 million
  • Onfido: $100 million
  • Payfone: $100 million
  • Featurespace: $37.4 million
  • M1 Finance: $33 million
  • Meniga: $9.4 million

It must be noted that, while venture capital investment has slowed somewhat in response to the COVID-19 crisis, merger and acquisition activity has been robust, relatively speaking. Among our alums alone, Q2 saw two major fintech acquisitions: Mastercard’s purchase of Finicity – valued as high as 1 $billion – and Personal Capital’s just-announced $825 million acquisition by Empower Retirement.

Here is our detailed alum funding report for Q2 2020.

April 2020: More than $638 million raised by six alums

May 2020: More than $187 million raised by three alums

June 2020: More than $150 million raised by six alums


If you are a Finovate alum that raised money in the second quarter of 2020, and do not see your company listed, please drop us a note at research@finovate.com. We would love to share the good news! Funding received prior to becoming an alum not included.


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ID.me Secures $8.3 Million in New Funding

McLean, Virginia-based digital identity network ID.me has boosted its total equity capital to more than $39 million after locking in an investment of $8.3 million this week. The new funding comes from a $12.5 million equity offering from the company, which featured the participation of 32 different investors.

ID.me has not provided any commentary on the investment, nor disclosed plans for how it will use the additional capital. The company’s previous fundraising was a $19 million Series B round in March 2017, according to Crunchbase.

The global public health crisis has put a spotlight on digital identity companies like ID.me. In March, the company announced the launch of a real-time collaboration workspace on messaging platform, Slack, to help health care providers share information about the coronavirus. In April, ID.me teamed up with DrFirst to make it easier for health care workers to verify their identities when using DrFirst’s mobile e-prescribing app, iPrescribe.

And in May, ID.me partnered with Shoes.com, enabling the company to accurately verify frontline healthcare workers as part of its program to provide them with discounts on footwear.

“As the U.S. enters its third month battling COVID-19, first responders and healthcare workers continue to soldier tremendous burdens and personal risks as they fight day-to-day on the frontlines of the pandemic,” ID.me founder and CEO Blake Hall said. “We are honored to play a role in the Step Up program and proudly support Shoes.com’s efforts to recognize these national heroes.”

A Finovate alum since 2014, ID.me most recently demonstrated its identity verification gateway at FinovateSpring in 2017. The company’s identity verification services – ranging from multi-factor authentication, document verification, and compliance monitoring, in addition to its identity gateway – are used by a wide variety of well-known organizations and institutions including USAA, NASA, Under Armor, and the United States Department of Treasury.

ID.me notes that it onboards 60,000 new users a day and has a total of 24 million users of its technology. Earlier this month, the company announced another partnership, this time working with LensDirect as part of their We See You, Heroes initiative to provide frontline health care workers and first responders with discounts on vision care products.


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India-Based Slice Raises $6 Million for Digital Payments

Slice (fka SlicePay), a millennial-focused challenger bank headquartered in India, raised $6 million in a pre-Series B financing round. The investment brings the company’s total funding to $27.7 million in combined debt and equity.

Gunosy led the round. Also participating were EMVC, Kunal Shah, Better Capital, as well as existing investor Das Capital.

According to Slice Co-founder and CEO Rajan Bajaj, the company will use the funds to acquire new users. In fact, Slice hopes to add 500,000 new customers within the next year. This is double the company’s existing active user base of 250,000.

Slice will also use the new $6 million to increase its workforce and explore banking partnerships to release co-branded cards.

Unique to Slice is its underwriting model, which is a key element in a country where customers are burdened with limited or no credit files. To help users build their credit, Slice offers a card that comes with a pre-approved credit line that offers installment loans, enabling users to buy now and pay later.

Slice is one of only a handful of challenger banks in India. Others in the subsector, including PayTM, Google Pay, and Walmart’s PhonePe, are all very large players. However, Slice seems to be fairing well. The company has been profitable since last year. And the simple fact that it raised funds in today’s economic environment where VCs are reluctant to invest speaks volumes of its potential.

“We believe Slice has a sustainable advantage as it has decoded young credit users’ demands and has built a deep understanding of credit risk and low-cost distribution using technology,” said Gunosy Director Yuki Maniwa.


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Payfone Raises $100 Million to Fight Fraud with Phone Intelligence

Identity verification and authentication company Payfone – which made its debut on the Finovate stage more than a decade ago – has announced a major fundraising of $100 million. The Series H investment, led by funds advised by Apax Digital (the growth equity division of Apax Partners), takes the company’s total funding to more than $217 million, according to Crunchbase. Although no valuation information was provided in last week’s announcement, TechCrunch noted that Payfone had earned a previous valuation of $270 million with its previous fundraising in April 2019.

Payfone’s customer identity platform helps financial institutions identify a range of potentially fraudulent activities – from the presence of a burner phone or a synthetic identity to spoofed calls and real-time SIM swap fraud. The company’s authentication solutions use proprietary “phone intelligence,” which processes behavioral signals in real-time to measure a phone number’s reputation and risk. This gives the authenticating party a Trust Score that helps them separate potentially suspicious activity from legitimate transactions. In addition, Payfone provides call verification solutions that run in the background of the phone call, making it easier and faster to resolve any authentication issues that arise.

“The mobile phone is rapidly becoming the secure passport for navigating our digital lives,” Payfone CEO Rodger Desai said. “With one in three U.S. consumers already authenticated by Payfone, this investment accelerates our ability to set the standard for the authentication process. As we build out a cross-industry consortium, more enterprises will be able to access Payfone’s real-time fraud and risk signals to prevent account takeovers while passing more transactions.”

In addition to helping the company build the forementioned industry-spanning consortium, the additional capital will be used to acquire strategic assets, and bolster the machine learning capabilities of its digital identity and authentication technology.

Also participating in the Series H round were new investors Sandbox Insurtech Ventures, and individual investor Ralph de la Vega, former Vice Chairman at AT&T. Existing Payfone investors MassMutual Ventures, Synchrony, Blue Venture Fund, Wellington Management LLP, as well as individual investor Andrew Prozes, former CEO of LexisNexis, were also involved in the fundraising.

Headquartered in New York City and founded in 2008, Payfone launched in the U.K. this spring with its Mobile Authentication product. The solution gives financial institutions in the U.K. a secure and easy-to-use alternative to one-time, SMS-based passwords for activities like customer onboarding, login, and two-factor authentication.

Payfone VP Keiron Dalton explained that while one-time passwords (OTP) have a role to play in the authentication process, they often fall short of what is required in the financial services industry. “(The) market demands placed on financial institutions in the U.K. are particularly acute,” Dalton said, “leading to a clamor of activity as these institutions search for what’s next in terms of authentication.” He called Mobile Authentication a “game-changing experience” for customers that provided a superior level of security against fraud, and added that the solution has seen “huge success in the U.S.”

Named one of the fastest growing companies on Deloitte’s 2019 Technology Fast 500 last fall, Payfone earned similar commendations this year from the Financial Times. The U.K.-based publication featured the company in the top 500 of its inaugural, The Americas’ Fastest Growing Companies 2020 roster.


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M1 Finance Raises $33 Million in Series B Funding

In a round led by New York-based growth equity firm Left Lane Capital, money management platform M1 Finance has raised $33 million in new capital. The Series B, which also featured the participation of Jump Capital, Clocktower Technology Ventures, as well as existing M1 investors, takes the company’s total funding to $53.2 million, according to Crunchbase.

The investment comes at the halfway mark of a year in which the company reached $1 billion in customer assets managed and added more than $650 million in customer deposits to its platform. The company noted that it achieved the $1 billion AUM milestone faster and with less funding than many of its competitors.

“We’ve built the premier personal finance platform that combines the best of digital investing, borrowing, and banking, and have done so on relatively little funding,” company CEO and founder Brian Barnes said. “That is a testament to the team and culture we have here. We’re just getting started and look forward to accelerating our growth with this new funding and strong new partners.”

The M1 personal finance platform consists of three main, integrated solutions to help users build wealth over the long-term, respond to intermediate-term financial challenges and needs, and manage near-term spending and saving. M1 Invest is the platform’s free investment solution that enables investors to build customized portfolios of stocks and exchange-traded funds (ETFs). The module features both fractional share functionality and advanced automation. M1 Borrow is the platform’s line-of-credit product, which offers rates between 2.0% and 3.5%. M1 Spend gives platform users an FDIC-insured digital checking account and debit card. This offering features a 1.00% APY and 1% cash-back on qualified purchases (with a subscription to the company’s M1 Plus upgrade).

“With M1, you can build an entire wealth strategy in only a few clicks, down to individual stocks and ETFs,” Barnes said. “We take it from there, handling all the day-to-day optimization, rebalancing, and re-investing according to your instructions so you can spend more time building strategies and less time executing them.”

Founded in 2015 and headquartered in Chicago, Illinois, M1 Finance demonstrated its platform at FinovateFall 2016.

Freelance Banking App Lili Lands $10 Million in Seed Funding

Lili, a New York-based mobile banking startup geared toward freelancers and gig economy workers, has picked up an investment of $10 million. Group 11 led the seed funding round, which also featured participation from Foundation Capital, AltaIR Capital, Primary Venture Partners, and Torch Capital.

The company, founded by Lilac Bar David (CEO) and Liran Zelkha (CTO), will use the funding to help support new product development, as well as expand the company’s customer base and add talent to Lili’s operations, marketing, and product teams.

“Lili is redefining banking for freelancers and we’re thrilled to be partnering with the team,” Group 11 founding partner Dovi Frances said. “As the future of work continues to evolve more quickly than ever in these uncertain times, Lilac and Liran’s forward-looking vision is changing how modern workers manage their finances, while saving them valuable time and money.”

Lili offers banking, expense management, and tax savings tools, a free checking account, and a Visa business debit card. No minimum balance is required and no account fees are charged. Account holders who authorize direct deposit can get their salary up to two days faster than they would with a traditional bank account, and the company’s business debit card can be used anywhere Visa debit cards are accepted. Free ATM withdrawals are available at more than 32,000 locations.

The company said that its technology can save freelancers “up to 60 hours and $1,700 per year” when they use Lili as their main account. In its statement, Lili noted that “tens of thousands of freelancers” across the U.S. are using the company’s app.

Last month, Fundera named Lili the Best Bank Account for Freelancers of 2020. Founded in 2018, the company’s FDIC-insured banking service was launched a year later with the backing of Choice Financial Group.

Voice Authentication Specialist Illuma Labs Secures New Investment

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Illuma Labs, creator of the real-time audio authentication platform for secure voice communications, Illuma Shield, has received a joint investment from The Veridian Group (a CUSO of Veridian Cedit Union) and Texas Dow Employees Credit Union (TDECU). Terms of the funding were not disclosed.

The investment comes as a result of Illuma Labs’ participation in VentureTech, an annual program that helps fintechs seeking funding to secure investment opportunities from within the credit union industry. Illuma was part of VentureTech’s 2019 cohort, which also featured fellow Finovate alums Wizely Finance, Terafina, Plinqit, and Pinkaloo. VentureTech was launched by The Veridian Group, Open Technology Solutions, and CUNA Strategic Services in 2018, and will hold its third event this fall.

“Instead of waiting for technology to come to market, VentureTech allows the credit union industry to be proactive in building its competitive advantage in the digital space,” President of The Veridian Group, Nick Evens explained at last year’s conference, which saw Illuma Labs take home top honors. “By recognizing and investing in promising fintech, we’re providing innovative, digital-first solutions that will drive the Movement forward.”

Iowa-based Veridian Credit Union, the FI served by The Veridian Group, has more than 244,000 members and $4.5 billion in assets. Texas Dow Employees Credit Union, with $3.7 billion in assets and more than 263,000 members, is the biggest credit union in the Houston, Texas area, and the fourth largest CU in the state.

Founded in 2016 and making its Finovate debut last year at FinovateSpring, Illuma Labs provides real-time voice authentication for customers around the world. With a technology that has its origins in R&D projects with the U.S. Department of Homeland Security Science and Technology Directorate, the company’s solutions support secure communications in verticals ranging from financial services and insurance to e-commerce. Illuma Shield, the company’s flagship solution, leverages signal processing, machine learning, and AI to offer call centers a real-time voice authentication solution that analyzes voices in natural conversation and provides a high authentication accuracy rate in a short period of time.

Headquartered in Plano, Texas, Illuma Labs was founded in 2016 by Milind Borkar (CEO) and Jeremy Whittington (CTO).

Digital Banking Solution Provider Meniga Raises $9.4 Million in New Funding

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As a company, the only thing better than a customer that loves your services and solutions is a customer that wants a piece of the action as well. That’s the happy situation digital banking solution provider Meniga finds itself in; the multiple-time Finovate Best of Show winner has just secured a $9.4 million (€ 8.5 million) strategic investment from current customers Grupo Credíto Agrícola, UniCredit, and Groupe BPCE, which led the round.

The investment, which takes Meniga’s total equity funding to more than $43 million, will help fuel the company’s R&D activities, as well as bolster its sales and service teams. Also participating in the round were current investors Velocity Capital, Industrifonden, and Frumtak Ventures.

Having Groupe BPCE, the second largest banking group in France, as both a customer and an investor is no accident. “Partnering closely with our customers is a key part of our strategy to be the preferred digital innovation partner to our clients,” Meniga co-founder and CEO Georg Ludviksson explained. “An equity relationship is an excellent way to strengthen such partnerships and we appreciate the continued vote of confidence and growing business we have with our impressive global client base.”

Meniga’s funding announcement comes amid a flurry of activity worldwide from the London-based company. In April, Meniga partnered with UniCredit to offer an enhanced version of its smart banking app in the Czech Republic. Also that month, Meniga teamed up with payments and transaction services firm Worldline to help boost digital customer engagement via personalization. Opening a new office in Warsaw, Poland in March, Meniga began the year by receiving its AISP license from the Financial Conduct Authority (FCA) in the U.K.

“The FCA license is an important milestone for Meniga,” Ludviksson said when the license was granted this February, “We will now be able to test new innovations against the Open Banking APIs and with real use cases, which will help us develop products of outstanding quality.”

Meniga’s technology is used by more than 90 million digital banking customers in +30 countries. Founded in 2009, the company most recently demonstrated its technology at FinovateFall in 2019.

Marqeta Lands $150 Million, Boosts Valuation to $4.3 Billion

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In a world of shrinking valuations and declining VC funding, payments company Marqeta is bucking the norm. The California-based company announced today it raised $150 million. Marqeta has also boosted its valuation to $4.3 billion, more than double the $1.9 billion valuation it earned a little over a year ago.

Today’s funding comes from a single investor, which Marqeta has not disclosed. However, sources have identified the party as L.A., California-based Capital Group. Marqeta’s previous investors include Coatue, Vitruvian Partners, Visa, Goldman Sachs, 83North, Granite Ventures, ICONIQ Capital, and others.

Marqeta, which was founded in 2010, positions itself as a modern card-issuing platform. The company offers scalable and configurable payments solutions available via an open API. Its services include ecommerce, incentive and disbusrsement payments, expense management, lending, and digital banking. Among its clients are Square, Uber, Affirm, Instacart, and DoorDash.

“Marqeta continues to move forward from strength to strength in 2020 as our global modern card issuing platform provides essential infrastructure and support to our customers across industries and oceans,” said Marqeta CEO and Founder Jason Gardner. “We’re building a single global platform to define and power the future of money for the world’s leading innovators. This new capital helps us accelerate our mission to empower builders to bring the most innovative products to market, wherever they are in the world.”

The company’s payment services are available in the United States, Canada, Europe, and Australia and is able to process payments in 10 countries in the Asia Pacific region. Last year, Marqeta marked the issuance of 140+million cards and doubled its revenue from the year prior to exceed $300 million. Jason Gardner is founder and CEO.

By Miles Raises $18 Million for Pay-By-Mile Auto Insurance

With the coronavirus keeping drivers off the road, there has been a lot of discussion surrounding auto insurance. In fact, many providers have recognized the decreased daily mileage (and the increased need for cash) during this time, and responded by offering rebates and credits to consumers in return.

Because of this, the pay-by-mile insurance model is looking more sensible than ever. This is likely what CommerzVentures was thinking when it led By Mile’s $18.3 million (£15 million) round of funding. Existing investors Octopus Ventures, Insurtech Gateway, and JamJar also participated.

“This crisis has shown U.K. drivers what we’ve known for a while: the way car insurance works now isn’t working for everyone,” said ByMiles CEO and CoFounder James Blackham. “Our pay-by-mile car insurance provides lower mileage drivers with a flexible, lower cost policy that drivers can track in real-time.”

Launched in 2016, By Miles offers U.K. residents a new alternative for car insurance in which drivers only pay for the miles that they drive. The company offers two options, both aimed at users that drive less than 7,000 miles per year. The Standard option uses a Miles Tracker device, a black box that plugs into a car’s dashboard. The telematics device uses mileage data from the user’s car to help price their insurance. The device does not use other data, such as speed, to price the insurance. Newer cars can use By Miles’ Trackerless option that pull mileage data directly from the connected cars’ manufacturer.

ByMiles is already seeing growth thanks to the global pandemic. The company experienced its strongest sales in April.

Visa Backs GoodData in New Strategic Partnership and Investment

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San Francisco, California-based company GoodData, which demoed its Insights-Platform-as-a-Service technology at FinovateFall, has forged a strategic partnership with Visa. The collaboration includes an investment in the global analytics company (terms not disclosed) and is designed to enable Visa to offer its customers and partners better access to aggregated data and analytics.

GoodData founder and CEO Roman Stanek said that the investment both reinforced the company’s status as a leader in all-in-one data platforms, as well as bolstered GoodData’s mission to enable companies to maximize the way they use data. “Visa’s investment will allow us to increase our focus on interactive self-service analytics, user interfaces, and data visualizations, as well as expand our customer support for managing complex data governance, compliance, cybersecurity, and privacy matters,” Stanek said.

GoodData offers an integrated set of data management, analytics, and insight application development and management components that enhance operational decision-making for financial services companies and insurance agencies. Companies can connect the GoodData platform to multiple data sources in order to build their own standalone or embedded smart business apps.

Visa put the partnership in the context of finding opportunity in the middle of a crisis. “As the world faces pandemic and economic challenges, there’s no better time to invest in areas that will improve the lives of consumers and businesses,” Visa SVP and global head of Data, Security, and Identity products Melissa McSherry said. She added that the insights available via the GoodData platform will not only help Visa’s customers better meet consumer needs, but also will help firms meet them at a time “when those needs are changing fast.”

Before this week’s funding, GoodData had raised more than $115 million, with the company’s last fundraising bringing in $14.4 million in 2018. Earlier this year, GoodData announced that media CMS provider TownNews had partnered with the company to use its data analytics tools to improve revenue and audience engagement. Named one of the Coolest Business Analytics Companies in CRN’s 2020 Big Data 100 roster, GoodData also this month unveiled a new, web-based logical data model (LDM) modeler. This tool complements the company’s just-released, data source management interface to simplify data modeling when starting new data products or extending current enterprise reporting. Critically, the new LDM modeler helps data engineers and data analysts work more effectively together. GoodData co-founder and VP of Product & Marketing called this problem “the greatest challenge facing enterprises building new data products for customers.”

Ant Financial to Invest $73.5 Million in Wave Money

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Mobile financial services provider and financial inclusion company Wave Money is receiving a boost today from Alipay parent Ant Financial. In an agreement announced, Ant Financial disclosed plans to invest $73.5 million in Wave Money, bringing the company’s total funding to $92.9 million.

The move will position Ant Financial as a substantial minority stakeholder in Wave Money, which is a joint venture between existing stakeholders Telenor and Yoma Bank.

Wave Money is headquartered in Myanmar and seeks to drive financial inclusion across the country. The company operates 57,000 Wave shops located in 295 out of 330 townships nationwide, covering approximately 89% of the country. In all, more than 21 million people have used Wave Money’s services, including Wave Pay, which is used for remittances, utility payments, airtime top-ups, and digital payments.

On the strategic side of the investment, Wave Money will tap Ant Financial’s expertise in mobile payments to help build out its digital capabilities and enhance its user experience.

“Myanmar’s population is still massively underserved by formal banking institutions with only a quarter of people having a bank account,” said Yoma Strategic CEO Melvyn Pun. “Ant Group brings a wealth of expertise in mobile payment and financial services. The covid-19 situation is accelerating the trend towards a cashless society and drives the growth of ecommerce, and we expect this strategic partnership to massively boost Wave Money’s capabilities to support these trends.”

The investment comes amid a time of growth for Wave Money. Last year the company’s transfer volume more than tripled year-on-year to $4.3 billion. During the same period, Wave Money’s revenue and transaction numbers also tripled. Additionally, the number of monthly active users for Wave Pay have increased 14% per month since the service launched in 2018.