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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Venture investing platform OurCrowd is taking home an investment of its own this week. The Israel-based company announced today it received $60 million in capital from Japan-based ORIX. The investment brings OurCrowd’s total funding to $172 million.
The goal of the funding and strategic partnership is to bring opportunities for Israel-based startups in the Asia region and will strengthen trade between the two regions.
“We are excited about investing in OurCrowd, Israel’s most active venture investor and one of the world’s most innovative venture capital platforms,” said ORIX UK CEO Kiyoshi Habiro. “We intend to be active partners with OurCrowd and help them accelerate their already impressive growth, while bringing the best of Israeli tech to Japan’s large industrial and financial sectors.”
Today’s deal isn’t the first time OurCrowd has made Japanese ties. Last year the company teamed up with Toyota Tsusho Corporation, a Japanese general trading company, to scout for startups that support autonomous driving industry.
OurCrowd was founded in 2013 and offers a platform that allows its 58,000 users to invest in 220+ pre-vetted startups and 23 venture funds. Jonathan Medved is CEO.
Another day, another opportunity for Mastercard to find itself in the fintech headlines. Last week, we highlighted a handful of Finovate alums that earned spots in Mastercard’s Start Path program. Then, yesterday, we covered news that the company had enhanced its Mastercard Track Business Payment Service to help modernize business payments. We also reported on Monday that Mastercard had earned the go-ahead from the U.S. Department of Justice to complete its big acquisition of data aggregation innovator Finicity.
Today’s Mastercard-related performance comes in more of a “Best Supporting” role as the company – along with VC firm MissionOG – announces an investment in payments facilitator-services provider Infinicept. The amount of the funding was not disclosed, but Infinicept’s co-CEO and co-founder Todd Ablowitz highlighted adding engineering talent and investments in product management and customer service as ways Infinicept plans to put the new capital to use. He also said that Infinicept is experiencing a 8x growth rate, as well.
“The opportunity in front of us is enormous, and we’re going to invest intelligently and aggressively to meet the needs of our customers,” added Deana Rich, co-founder and co-CEO of Infinicept. “Our customers need the ability to get payments up and running on their own terms, without having to do all the work themselves. While others try to lock-in customers with templated solutions, Infinicept puts software companies in control of their payments experience – and their payments future.”
Infinicept enables businesses to offer embedded payments to a wide variety of customers, including in health care management and hospitality. Infinicept’s platform offers software providers, financial institutions, marketplaces, and more a payments infrastructure that can help them generate payments revenue, onboard merchants faster, and improve the overall customer experience.
This week’s investment is the latest expression of a partnership between Mastercard and Infinicept that extends back to 2012. Infinicept is an alum of Mastercard’s Start Path accelerator, joining the program as part of the 2019 cohort. Infinicept’s first customers were Stripe and Shopify in 2011.
“Infinicept’s technology now supports acquirers and payment facilitators with the critical tools to help businesses around the world manage payments,” Mastercard EVP of Merchant Solutions and Partnerships Zahir Khoja said. “Mastercard’s technology and scale, with partners such as Infinicept, is helping our larger acquirer ecosystem support businesses around the world to accelerate growth, modernize transactions, and ensure businesses have the tools to succeed.”
Founded in 2011, Infinicept is headquartered in Denver, Colorado.
Embedded finance and payments platform Hydrogen announced a strategic investment today. FINLAB, a new incubator launched by EML Payments, completed what Hydrogen called an “initial investment” that will include a cross-platform integration that will make it easier for firms to offer smart apps linked to both physical and virtual payment cards.
“We are thrilled to be working with EML and have it as a strategic investor in Hydrogen,” company co-founder and CEO Mike Kane said. “Together, we’ll be able to bring innovative card offerings to the masses, making it easy for any organization to offer card capabilities. It’s embedded card services made easy.”
The terms of the investment were not disclosed. Hydrogen currently includes both SixThirty and Route 66 Ventures among its investors.
Hydrogen’s no-code platform enables financial and non-financial companies to offer fintech products and modules without needing to have any development experience. Those organizations with development teams can take advantage of Hydrogen’s low-code API option, which enables developers to build custom apps on top of REST-based APIs. Featuring orchestration, business logic, and data cleansing, the platform enables businesses to leverage a standardized data model that can help keep costs of integration low and the development time short.
“We love cementing deals and investing in payments trailblazers,” EML Managing Director and Group CEO Tom Cregan said. “Hydrogen, with the intensity of energy it has already infused into the industry, is no different. Our commitment is to assist this fast-growing entity in soaring within fintech via EML’s capabilities and FINLAB. It’s heartening to know Hydrogen feel in safe and trusted hands with the might of EML’s global reach.
Making its debut at FinovateEurope two years ago, Hydrogen announced in September that it was one of 20 companies selected to participate in Plug and Play’s 2020 Winter Fintech batch. Also that month, the company unveiled a partnership with fellow Finovate alum Dwolla and teamed up with market data and technology service provider Barchart.
Among its accolades, Hydrogen has been named FinTech Startup of the Year by KPMG Luxembourg and as a World Changing Technology by Fast Company. The company was founded in 2017 and is headquartered in New York City.
Embedded banking-as-a-service platform Wisesecured $12 million in funding this week. The investment is its second one this year – Wise announced a $5.7 million seed round in April – and was led by e.ventures with participation from Grishin Robotics. The company, which made its Finovate debut last year at FinovateFall, said in a statement that the capital will be used to help fuel growth and accelerate partnership-building in a number of verticals. Wise now has raised a total of $18 million in equity financing.
“We built banking so our partners don’t have to,” Wise CEO and co-founder Arjun Thyagarajan said. “By embedding banking, Wise unlocks deep product offerings and better customer experiences for our partners. e.ventures built a thesis on exactly this, and we agree 100%.”
Wise offers an embedded banking experience that gives small businesses a seamless way to bank, as well as make and accept payments. Companies partner with Wise and leverage its all-in-one business banking solution to offer accounts to their own clients such as e-commerce platforms and marketplaces. In addition to providing a fully-hosted and fully-serviced banking experience, Wise helps companies bridge the gap between what they have traditionally received from banking services and what e.ventures partner Brendan Wales called “an Apple-like experience” brought to the world of business banking.
“Business banking has been broken for far too long. Poor user interfaces, payments delays, unnecessary fees, a lack of integrations, the list goes on and on,” Wales said. Now, cloud-based B2B companies can offer banking services in a matter of days with no coding involved and have the entire operation managed and maintained by Wise.
Wise demonstrated its small business-banking-in-a-box solution at FinovateFall 2019. A Techstars NYC company based in San Mateo, California, Wise was founded in 2018. Check out our profile of the company from earlier this year.
U.K.-based payments technology providerIcon Solutions is getting a boost today from U.S. banking giant JP Morgan in the form of a strategic investment.
The amount of the investment, along with specific terms of the deal, remain undisclosed.
“We’re excited to support Icon with this strategic investment as they look to continually build a simplified, collaborative payments ecosystem, driving emerging payments rails and innovation,” said Sara Castelhano, EMEA Head of Payments, Digital, and Solutions at JP Morgan Wholesale Payments.
As part of today’s deal, Icon has added Castelhano, to its Board of Advisors.
Icon will use the funds to expand development of its Instant Payments Framework technology, a collaborative, open source payments platform that helps clients process instant payments.
To facilitate these instant payments for U.S. clients, Icon has teamed up with The Clearing House to offer an accelerated route to accessing The Clearing House’s (TCH) real-time payments system. The company has also partnered with Featurespace to facilitate integration and block fraud attacks at scale and in real time.
“We will directly benefit from the support, scale and insight of a global banking leader and one of the most visionary technology companies in the world, while retaining our flexibility and independence,” the company said in a blog post. “We can now accelerate our strategic roadmap, invest more in our technology and team, and expand our geographic reach.”
The investment comes at a pivotal time in the U.S. payments scene. The U.S. Federal Reserve is lagging behind the rest of the globe in launching a real-time payments and settlement service, anticipating a delay until 2024. As the current speed of payments fails to meet consumer expectations, which have evolved to demand the delivery of everything from messages to groceries in real time, private players are coming to the market with their own solutions.
In a round led by Macquarie Capital Principal Finance, payment and data security technology company Bluefin has raised $25 million in new financing. With total capital now standing at more than $30 million, the company said the funding would “fuel” its product line, help drive growth internationally as well as within the U.S., and support “opportunistic acquisitions.”
In its statement, Bluefin put this week’s investment, and the growth opportunities for the company, in the context of changes taking place as a result of the global health crisis. Noting that the pandemic has increased reliance on mobile point of sale devices, Bluefin warns that this means the number of potential attack entry points for hackers and cybercriminals has also increased. With an estimated 27.7 million mobile POS devices in use by 2021, Bluefin argues that additional security to defend private data will be required for all businesses, regardless of their sales hardware preference.
“Bluefin is dedicated to remaining at the forefront of technology and solution development in the fight against breaches and cyberattacks,” Bluefin CEO John M. Perry said. “Our partnership with Macquarie will enable Bluefin to not only introduce more solutions to protect e-commerce, online and point-of-sale transactions, but also to make these solutions available globally through our extensive partner network and Bluefin’s products. We look forward to leveraging Macquarie’s deep financial and global expertise in this next phase of company growth.”
A specialist in securing Personally Identifiable Information (PII), Protected Health Information (PHI), as well as financial card data, Bluefin leverages PCI-validated point-to-point encryption (P2PE) and tokenization to safeguard information upon entry, in transit, and in storage. Bluefin’s technology enables secure payment acceptance for card present, e-commerce, and mobile transactions, and is available via its network of 130+ integrated partners or directly through the company.
“Bluefin has developed industry-leading data and payment protection technologies, which are crucial in the global climate of rising data breaches and cyberattacks against organizations of all sizes,” Macquarie Capital Principal Finance Managing Director Anand Subramanian said. “We are very pleased to partner with this innovative company to expand their cybersecurity product suite and fuel continued growth in the U.S. and internationally.”
An alum of our developers conference, FinDEVr Silicon Valley, Bluefin announced a partnership with CPA Site Solutions in September, enabling the accounting website provider to offer enhanced online billpay. In August, the company teamed up with electronic bill presentment and payment (EBPP) solutions provider Invoice Cloud.
Brokerage infrastructure API provider DriveWealthbrought in $56.7 million in Series C funding today. The investment is more than double the Series B round of $21 million the company received in 2018. Today’s investment brings the company’s total to $100.8 million.
The round saw participation from existing investors Point72 Ventures– which led the round– as well as Raptor Group, SBI Holdings, and Route 66 Ventures. New investors Mouro Capital and Fidelity International Strategic Ventures also participated.
DriveWealth will use the funds to strengthen its technology, make strategic acquisitions, and grow the organization to scale its business.
The New York-based company offers a suite of APIs that allows its partners to embed investment experiences of U.S. securities within their own apps. Among DriveWealth’s products are tools for advisors, fractional share investing, and purchase round-up investment capabilities.
“DriveWealth saw its partners open more accounts in 2Q than E*Trade, Schwab and TD Ameritrade combined, and 3Q saw a 33% increase over 2Q,” said DriveWealth Founder and CEO Bob Cortright. “This type of activity speaks to the power of making it simple for consumers to start investing immediately. The new funding from our great investors will only help us improve our technology capabilities to democratize investing.”
Since it was founded in 2012, DriveWealth has already scaled its business to serve a range of geographies and now reaches investors in 153 countries. The company has formed partnerships with firms on six continents, including Asia, where it collaborated with Singapore-based Bambu on the launch of a white-label roboadvisory platform for U.S. wealth managers; and Africa, where the company teamed up with Sigma Securities and Trove Technologies to launch a digital U.S. equities trading product for retail investors in Nigeria.
Among DriveWealth’s clients are Hatch, Revolut, Stake, and Moneylion. The company recently partnered with Access Softek to help community banks and credit unions offer their members access to investing tools.
Nordic challenger bank Lunar announced a $47 million (€40 million) Series C funding round today, bringing its total raised to $122 million. The funds come from investment firm Chr. Augustinus Fabrikker and individual investors Klaus Oestergaard and Alan Howard.
Lunar plans to use the new funds to enter the buy now, pay later (BNPL) space. “It’s the most profitable banking landscape in the world, but also the most defensive, with least competition from the outside,” Founder and CEO Ken Villum Klausen told TechCrunch. “This means that the traditional banking customer is buying all their financial products from their bank.”
The decision to launch a BNPL tool comes after the company’s many successful launches, including paid subscriptions, consumer loans, and business bank accounts. The bank currently counts 5,000 business users and 200,000 retail banking users across the Nordic region.
Unlike established players in the BNPL market, Lunar’s BNPL tool will not rely on merchant partnerships. Instead, the bank will ask users after they make a purchase if they want to split the payment amount into installments. This model will work with both brick-and-mortar retail as well as ecommerce purchases.
Villum Klausen founded Lunar in 2015. The company’s 180 employees work in the company’s offices across Denmark, Sweden, and Norway.
In a venture round featuring Motley Fool Ventures and Ally Ventures – the strategic investment arm of Ally Financial – as well as individual angel investors, Streetshares has secured $10 million in new funding. The company said that it will use the capital, which takes the company’s total to more than $279 million, to drive future product development with an eye on serving small businesses in the post-PPP market.
“We’re seeing exciting digital adoption by banks and credit unions in response to COVID-19,” said StreetShares CEO Mark L. Rockefeller. “But equally important to us is the practical impact our technology is having in helping their customers, especially underserved business owners, get the funding they need to succeed.”
Founded in 2013 and launched a year later as an affordable digital lending alternative for veteran-owned small businesses, StreetShares unveiled its lending-as-a-service platform last year at our annual fintech conference FinovateFall. The platform enables banks to lend up to $250,000 to SMEs, and features a digital loan application, instant underwriting, loan servicing, and tracking. The company’s offering came in handy this year when the coronavirus struck and businesses across the country were shut down and starving for financial assistance. StreetShares’ technology was leveraged widely by community lenders in order to make Paycheck Protection Program funds available to SMEs.
As such, so far this year, a total of 53 financial institutions currently use the StreetShares platform. The company said that it is now expanding its platform into a suite of small business banking solutions that will be especially helpful for community banks, credit unions, and their small business clients as digital transformation initiatives continue in the wake of COVID-19.
“We’re seeing years of digital adoption by banks condensed into weeks,” said Ollen Douglass, Managing Director of Motley Fool Ventures. “Beginning with PPP, and now on to a full-suite of products, we believe StreetShares is positioned perfectly to power banks in their digital transformations.”
StreetShares is headquartered in Reston, Virginia. Read our profile of the company from last summer as StreetShares was stepping up to help bring needed financing to SMEs at the onset of the COVID-19 crisis.
In a round led by Left Lane Capital and featuring participation from Jump Capital and Clocktower Technology – as well as other investors – M1 Finance has scored $45 million in funding. The Series C round takes the finance super app company’s total to more than $95 million, adding to the $33 million M1 Finance raised in June.
CEO and self-described “personal finance nerd” Brian Barnes highlighted ways the new investment would help power the company forward. In an extended blog post, Barnes listed investment in the client experience, more products and features, and more talent as initiatives customers can look forward to over the balance of the year and into 2021. “We’re not just stepping on the gas,” he wrote, “we’re now on a rocket ship.”
M1 Finance’s Finance Super App combines investing, borrowing, and spending functionality in one automated platform. Clients can use the platform to build their investment portfolios for free, take advantage of fractional share investing and schedule automatic, one-click rebalancing. A flexible portfolio line of credit is available to users once their portfolio value reaches $10,000; and the platform’s M1 Spend feature enables users to schedule and pay back loans, as well as set up direct deposits, automatic investments, and transfers.
Founded in 2015 and headquartered in Chicago, Illinois, M1 made its Finovate debut at our New York conference in 2016. In September, the company partnered with Rackspace Technology in order to bring expanded Amazon Web Services functionality to its platform. That same month, M1 reported that it had reached $2 billion in assets under management, and added more than 229,000 new accounts since February. More recently, the company launchedSmart Transfers, a new feature for its Plus members that provides greater control and flexibility in setting automatic transfers and investments.
“We’re here to empower a new world of personal financial well-being through a simpler, smarter, stronger platform,” Barnes wrote this week. “With more funds and the opportunity to continue working with people we know and trust, we can expand what we do for you and your money.”
Finovate alums raised more than $1.2 billion in equity funding in the third quarter of 2020. This year’s sum tops the amount raised in Q3 of last year, making it one of the strongest third quarters for Finovate alums to date.
Fourteen alums announced funding over the summer months, a lower total than in previous years.
Q3 2016: More than $500 million raised by 30 alums
As was the case last year, Klarna ranks at the top of the third quarter investment hauls; indeed, this year’s $650 million is significantly higher than the $460 million the buy now pay later company received in Q3 2019. Other sizable investments of this year’s third quarter include the $100 million raised by PayActiv and the $80 million secured by Revolut.
With fourteen alums receiving funding in the quarter, it is no surprise that the top ten equity investments represent an overwhelming amount of the total capital raised by alums in Q3. This year, the top ten equity investments provided more than 96% of the quarter’s total.
Top Ten Equity Investments for Q3 2020
Klarna: $650 million
PayActiv: $100 million
Revolut: $80 million
Blend: $75 million
Splitit: $71.5 million
Taulia: $60 million
Scalable Capital: $58 million
Thought Machine: $42 million
Alloy: $40 million
Socure: $35 million
Here is our detailed alum funding report for Q3 2020.
July 2020: More than $240 million raised by four alums
If you are a Finovate alum that raised money in the third 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.
A new investment of $20 million takes the total capital raised by behavioral biometrics innovator BioCatch to more than $213 million. Participating in this week’s funding were a quartet of major global banks: Barclays, Citi, HSBC, and National Australia Bank (NAB). The funds add to BioCatch’s Series C round, which brought $145 million to the company’s coffers in April.
In addition to its funding announcement, BioCatch also unveiled a new BioCatch Client Innovation Board. The Board is a collaborative, invitation-only forum where members can discuss and develop new approaches to leveraging what the company called in a statement “the unique attributes of behavior.” BioCatch’s signature innovation in behavioral biometrics is a cognitive behavioral approach that focuses on the way a user interacts with their device, as well as online and mobile applications in order to combat fraud. The company’s Invisible Challenges mechanism operates without the user even being aware of it, enabling BioCatch to provide strong authentication with minimal friction for the user.
As part of the funding, each of this week’s investing banks, as will existing BioCatch investor, American Express Ventures, will have two seats on the Innovation Board.
“We have already seen the power of collaboration in solving difficult problems in other areas of the financial services industry, such as clearing corps, transaction networks, post-trade processing, margin calculation, and collateral management, when banks work together and share knowledge, workflow, and data in the common interest,” Edelstein said. “We are extremely excited that five of the largest and most important global financial institutions are working with BioCatch to jointly address today’s most pressing problems in the areas of online fraud, account authentication and digital identity.”
Founded in 2011 and based in both New York City and Israel, BioCatch was named to CB Insights’ Fintech 250 list of the fastest-growing fintechs earlier this month. Over the summer, the company announced that it had created anonymous behavioral profiles for more than 150 million individual online banking users, and now analyzes more than one billion digital sessions a month in real-time.
Learn more about BioCatch in our June profile, COVID-19 and the Fight Against Cyberfraud.
