Funding

Data Security Specialist Bluefin Banks $25 Million in Growth Funding

Data Security Specialist Bluefin Banks $25 Million in Growth Funding
By David Penn Posted on
Categories: Alumni News, Bluefin, Bluefin Payment Systems, Daily news, Funding

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.

Photo by Harrison Haines from Pexels

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DriveWealth Brings Home $56.7 Million

DriveWealth Brings Home $56.7 Million
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, DriveWealth, Funding

Brokerage infrastructure API provider DriveWealth brought 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.

Photo by Samuele Errico Piccarini on Unsplash

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Lunar Brings in $47 Million to Launch BNPL Tool

Lunar Brings in $47 Million to Launch BNPL Tool
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

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.

Photo by Nicolas Thomas on Unsplash

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StreetShares Lands $10 Million in New Funding to Bring Financing to SMEs

StreetShares Lands $10 Million in New Funding to Bring Financing to SMEs
By David Penn Posted on
Categories: Alumni News, Funding, StreetShares

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.

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M1 Finance Secures $45 Million Series C for its Finance Super App

M1 Finance Secures $45 Million Series C for its Finance Super App
By David Penn Posted on
Categories: Funding, M1 Finance

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 launched Smart 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.”

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More Than $1.2 Billion Raised by 14 Alums in Q3 2020

More Than $1.2 Billion Raised by 14 Alums in Q3 2020
By David Penn Posted on
Categories: Funding, Fundings, Quarterly Funding

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.

Previous Quarterly Comparisons

  • Q3 2019: More than $1 billion raised by 21 alums
  • Q3 2018: More than $400 million raised by 19 alums
  • Q3 2017: More than $1 billion raised by 31 alums
  • 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

August 2020: More than $318 million raised by seven alums

September 2020: More than $692 million raised by three 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.

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BioCatch Secures $20 Million to Drive Innovation in Behavioral Biometrics

BioCatch Secures $20 Million to Drive Innovation in Behavioral Biometrics
By David Penn Posted on
Categories: BioCatch, Funding

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.

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Digital Banking Platform Alkami Raises $140 Million

Digital Banking Platform Alkami Raises $140 Million
By David Penn Posted on
Categories: Alkami Technology, Funding

In a round led by D1 Capital Partners, cloud-based digital banking technology platform Alkami has secured $140 million in new funding. The investment takes the company’s total capital to more than $378 million and comes as the firm reaches nearly 10 million digital users under contract.

“We are proud to add world class crossover investors to our strong existing investor base, supporting Alkami’s mission,” company CEO Mike Hansen said. “We inspire and power the digital strategies of financial institutions as they seek to grow confidently and build thriving digital communities.”

Also participating in the venture round were Fidelity Management & Research Company, Franklin Templeton, and Stockbridge Investors.

The financing also comes just a few weeks after the company learned it had made CB Insights roster of top 250 fastest-growing fintechs. This year’s cohort was selected out of a pool of 16,000 companies. Also this month, Alkami topped $130 million in annual recurring revenue under contract, as the company onboarded its 165th digital banking platform client.

“Our clients are among the best performing and fastest growing FIs in the country, in part due to the strength and velocity of our platform, solutions, and ecosystem,” Hansen added. “Together we are creating and delivering winning digital solutions to our clients’ customers, members, and businesses.”

Last month, Alkami announced that it had teamed up with fellow Finovate, multiple Best of Show winner Glia, integrating its Digital Customer Service platform as part of Alkami’s suite of online offerings. “With Glia, banks and credit unions can break down the walls of traditional customer support by meeting customers online and guiding them to quick and satisfying resolutions,” Glia co-founder and CEO Daniel Michaeli said. “By partnering with Alkami, we are making digital-first customer service more easily accessible to premier financial institutions and their users.”

Headquartered in Plano, Texas, Alkami is among Finovate’s oldest alums, demonstrating its technology as iThryv back in 2009.

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ClickSWITCH Secures Strategic Investment from USAA

ClickSWITCH Secures Strategic Investment from USAA
By David Penn Posted on
Categories: ClickSWITCH, Funding

Digital account switching company ClickSWITCH has locked in an investment of $2 million from a subsidiary of USAA. The funding, which takes the company’s total to more than $21 million, will be used to help the Minneapolis, Minnesota-based firm “build additional momentum around the ClickSWITCH solution and its features,” according to founder and CEO Cale Johnston.

ClickSWITCH offers an automated account management solution that enhances the onboarding process for financial institutions by enabling them to quickly and efficiently switch all direct deposits and recurring payments from old accounts to new ones. The solution helps banks and credit unions gain higher account holder acquisition and activation rates, capture more deposits, and increase profitability.

“The financial investment from USAA is encouraging during these uncertain times and we are excited to support USAA’s mission of supporting the U.S. military community,” Johnston added.

USAA Head of Corporate Development Nathan McKinley praised ClickSWITCH for its “commitment to solving a persistent consumer problem” and put the investment in the context of USAA’s goal of providing military families with “the best value in financial services.” Based in San Antonio, Texas, USAA is a leading financial services provider, offering insurance, banking, and investment solutions to nearly 13 million members of the U.S. military, veterans, and their families.

With more than 500 financial institution customers in North America, ClickSWITCH sees this week’s investment as helping drive further innovation on its technology and enabling the six-year old company maintain its status as a leader in the account switching space. This spring, as the COVID-19 crisis took hold in the U.S., ClickSWITCH forged a partnership with fellow Finovate alum Finastra. The company said it would leverage ClickSWITCH for its Fusion Phoenix and Fusion UltraData core clients to help them increase both deposits and customer engagement.

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Bitpanda Raises $52 Million in Round Led by Peter Thiel’s Valar Ventures

Bitpanda Raises $52 Million in Round Led by Peter Thiel’s Valar Ventures
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Digital asset platform Bitpanda announced a round of venture funding today. The $52 million Series A round marks the largest Series A round in Europe so far this year.

The round was led by Valar Ventures, a VC firm backed by Peter Thiel. Today’s investment, combined with Bitpanda’s $51 million ICO last year and undisclosed venture round last year, brings its total funding to over $103 million.

As part of the agreement, Andrew McCormack and James Fitzgerald from Valar Ventures will join Bitpanda’s board. “With their extensive track record in growing digital champions like PayPal in its early years and supporting Peter Thiel during its IPO and eventual sale to eBay in 2002, we are more than confident in the choice,” Bitpanda CEO and Co-founder Eric Demuth said.

The company will use the funds to promote geographical expansion. Specifically, after its successful launches in France, Spain, and Turkey this year, Bitpanda plans to expand to more European countries before year-end.

The investment will also be used to “bring the Bitpanda platform and all our services to a new level.” The company has already slated new products for launch, including a new stock trading tool which will launch in 2021.

Much of Bitpanda’s focus is on financial empowerment and the democratization of investment. “Bitpanda will become an investment platform for asset classes for everyone,” Demuth said. “We will provide education, empower our users to take their future into their own hands and remove all those barriers that prevent people from taking part.”

Founded in 2014, Bitpanda has seen significant growth this year, boosting its client base to more than 1.3 million. Additionally, the company has brought on more than 70 new employees this year and plans to boost its total workforce to more than 300 by the end of this year.

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New Funding Takes Robinhood’s Series G Round to $660 Million

New Funding Takes Robinhood’s Series G Round to $660 Million
By David Penn Posted on
Categories: Daily news, Funding

A little over a month after announcing a $200 million investment from D1 Capital Partners as part of its Series G round, the Millennially-targeted stock trading app Robinhood is back in the fintech funding headlines with another $460 million in new capital raised. The investment gives the company a valuation of $11.7 billion, and brings the Series G’s total to $660 million.

The company’s total funding stands at $2.2 billion.

The financing comes from a quintet of investors: Andreessen Horowitz, Sequoia, DST Global, Ribbit Capital and 9Yards Capital. A Robinhood spokesperson said that the funds will be used to support Robinhood’s core product as well as “new offerings like cash management and recurring investments.”

Robinhood has been on an impressive fundraising pace this year, locking in more than $1 billion in 2020 alone as a rapidly advancing stock market – and the blunting of sports gambling due to pandemic restrictions – have brought new investors and traders to the platform. Robinhood offers commission-free trading in stocks, exchange-traded funds (ETFs), and options via Robinhood Financial, as well as the ability to buy and sell cryptocurrencies with its Robinhood Crypto platform.

Founded in 2013 and headquartered in Menlo Park, California, Robinhood has more than 13 million users. Earlier this month, the company announced a set of updates on its options trading offering, giving investors and traders greater control over exercising options, and adding improvements to the early assignment process, as well as enhancing both education and eligibility criteria for options trading. In August, Robinhood introduced a pair of new Chief Compliance Officers – Norm Askhenas for Robinhood Financial and Kelly Zigaitis for Robinhood Securities – who are veterans of Fidelity and Wells Fargo Advisors, respectively.

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Digital Identity Specialist Alloy Raises $40 Million in Series B

Digital Identity Specialist Alloy Raises $40 Million in Series B
By David Penn Posted on
Categories: Alloy, Funding

In a round led by Canapi Ventures, digital identity management innovator Alloy raised $40 million in Series B funding last week. The round featured participation from Avid Ventures, Felicis Ventures, as well as a trio of existing investors: Bessemer Ventures, Primary Venture Partners, and Eniac Ventures. The investment takes the New York-based company’s total capital to more than $55 million.

“Our mission is to help our customers deploy safe and seamless digital customer experiences,” company CEO Tommy Nicholas wrote on the company blog. “This investment will help us continue to support our growing customer base, while expanding our product offerings and scaling marketing, sales, and customer efforts.”

More specifically, Nicholas noted that the investment will help the company bring new products to market in the areas of transaction and credit decisioning, as well as document verification. He added that Alloy will also continue to invest in its onboarding decisioning system and build a new learning portal to help users maximize their use of Alloy’s technology.

Alloy’s platform enables financial institutions to increase the number of customers they can safely and quickly onboard, automate manual processes to reduce error and manual review burden, and reduce fraud and financial risk. The technology allows FIs to access more than 60 KYC and identity vendors via API, and leverages data from a variety of sources in order to provide real-time risk decisioning. The company includes Ally Bank, Evolve Bank & Trust, and Brex among its partners.

In a blog post titled “Why Canapi is Leading Alloy’s $40M Series B Financing,” the Series B’s lead investor makes a strong case for investment not only in Alloy, but also for investment in digital identity innovation in general. The post discusses the challenge that financial services companies face in meeting compliance and regulatory standards that “were not designed for a digital-first world,” and points out that the arrival of the public health crisis has only made this challenge more acute. “What was costly and ineffective in the past has become unsustainable in the COVID-19 era,” the authors write.

Founded in 2015, Alloy presented “KYC: The Customer Killer – Solved!” at our developer’s conference, FinDEVR Silicon Valley, later that same year. At the event, Nicholas and company CTO Charles Hearn showed how Alloy’s technology enabled businesses to create fully-customizable APIs for customer identification and compliance.

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