Funding

Behavioral Biometrics Specialist BioCatch Scores $145 Million in New Funding

Behavioral Biometrics Specialist BioCatch Scores $145 Million in New Funding
By David Penn Posted on
Categories: BioCatch, Funding

In a round led by Bain Capital Tech Opportunities, behavioral biometric innovator BioCatch has secured a major $145 million investment. The Series C round featured participation from new and existing investors including Industry Ventures and American Express Ventures, and boosts the company’s total capital to more than $186 million.

BioCatch chairman and CEO Howard Edelstein put the company’s news and recent accomplishments in the context of the challenges brought about by the COVID-19 global pandemic. “The current environment has spawned a large increase in bad actors seeking to take advantage of distracted individuals working from home or dispersed companies whose technologists are scattered in remote locations,” Edelstein said. “In such times, technologies like behavioral biometrics become more important than ever.”

In a post published at the company blog, BioCatch Product Leader Ayelet Biger-Levin noted that since the pandemic began and more people began social distancing and working remotely, “phishing and malware have been the primary source of scams and cyberattacks.” Biger-Levin added that financial institutions are especially vulnerable to social engineering schemes in which unwitting victims are tricked into making authorized but fraudulent transactions.

BioCatch leverages more than 2,000 bio-behavioral, cognitive, and physiological parameters to create real-time risk scores that enable institutions to defend themselves against both human and non-human cyber threats. The company’s technology provides identity proofing to fight new account and account takeover fraud, as well as continuous authentication to verify identity from login to logout.

“BioCatch has quickly established itself as the pioneer in the digital identity space by developing next-generation behavioral biometrics technology that integrates fraud detection and authentication capabilities to protect end-users and their most sensitive transactions,” Bain Capital Tech Opportunities Managing Director Dewey Awad said.

BioCatch demonstrated its Passive Biometrics/Invisible Challenges feature of its platform at FinovateFall. The company has secured more than 50 patents, has 90+ million users, and has provided more than 10x ROI based on testimonials from customers such as NatWest, American Express, and Itau Unibanco.

Earlier this year, the company acquired fraud and anomaly detection specialist AimBrain. Founded in 2011, BioCatch is headquartered in Tel Aviv, Israel.

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Stripe Brings Home $600 Million- its Largest Funding Round Yet

Stripe Brings Home $600 Million- its Largest Funding Round Yet
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Payment acceptance and business management platform Stripe announced an extension of its $250 million Series G funding round today. The additional $600 million in funds come from existing investors including Andreessen Horowitz, General Catalyst, GV, and Sequoia.

The investment is Stripe’s largest so far and brings the California-based company’s total funding to $1.6 billion.

The company will use the new funds to hire more staff, invest in its software, make strategic acquisitions, and expand internationally. Stripe has launches pending in Bulgaria, Cyprus, the Czech Republic, Hungary, Malta, and Romania.

Stripe first announced its Series G round in September of last year, in a pre-COVID-19 world. However, despite the vast differences in the global economy at that time, the company’s valuation has actually increased– from $35 billion last September to $36 billion today.

A $1 billion rise in valuation is rare these days, when startups across the globe have been told to brace for down rounds. The company attributes this boost to the increased digital adoption that has occurred as a result of businesses moving their operations online because of the coronavirus.

“People who never dreamt of using the internet to see the doctor or buy groceries are now doing so out of necessity. And businesses that deferred moving online or had no reason to operate online have made the leap practically overnight,” said John Collison, Stripe president and co-founder. “We believe now is not the time to pull back, but to invest even more heavily in Stripe’s platform.”

Stripe was founded in 2010 and has since padded its client base with well-known firms such as Caviar, Coupa, Just Eat, Keap, Lightspeed, Mattel, NBC, Paid, and Zoom– a partnership that was just unveiled today.

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Onfido Raises $100 Million Because “Identity is Broken”

Onfido Raises $100 Million Because “Identity is Broken”
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, Onfido

Digital identity verification platform Onfido reeled in $100 million in a round led by TPG Growth this week. Salesforce Ventures, Microsoft’s M12 Capital, and others also participated. The London-based company’s total investment now sits at just over $182 million.

The company, which counts TechStars, YCombinator, and 500 Startups among its previous investors, will use the funding toward R&D and global expansion. Specifically, Onfido plans to boost its operations in the North American market.

Onfido started off in 2012 with $20,000 in funding from Oxford University and made those funds last for a whole year. After that, the company said it could go one of two routes: it could grow quickly and rely on investment to sustain operations or it could opt for slower growth but be financially self-sufficient.

“We’ve naturally chosen the grow-fast path because we strongly feel that the time to solve the digital access problem is overdue, and urgently needs to be solved, for good,” said CEO and Co-founder Husayn Kassai.

From the outset, Kassai and fellow co-founders Eamon Jubbawy and Ruhul Amin focused on creating a new standard for digital access that looks beyond credit bureaus for a more inclusive approach that stops fraud without compromising the user experience. “Identity is broken and getting worse, contributing to $2 trillion in laundered money,” said Kassai.

To help overcome this, Onfido tapped the power of machine learning to assess 4,500 types of documents from 195 countries for authenticity, as well as match document photos to the user’s selfie. The technology, which the company showcased at FinovateFall 2018, can be used for user onboarding, identity verification, fraud detection, age verification, and to help meet AML and KYC requirements.

“We didn’t fundraise to just get to the next milestone, we need the funding as we’re changing the world,” added Kassai.

With more than 350 employees across nine offices in London, San Francisco, New York, Albuquerque, Lisbon, Berlin, Paris, New Delhi, and Singapore, Onfido helps more than 1,500 companies verify their users. Among the company’s clients are Revolut, Zipcar, Expensify, and Bitstamp.

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BankBazaar Adds $3.8 Million to Series D

BankBazaar Adds $3.8 Million to Series D
By David Penn Posted on
Categories: BankBazaar, Funding

Indian online financial products marketplace BankBazaar has boosted its current Series D round by $3.8 million. The capital comes from Amazon and Walden SKT Venture Fund, who have joined Sequoia, GUS Holdings, and Eight Roads Investments in the round. This week’s investment adds to the $30 million in Series D funds BankBazaar raised in 2017. Fellow Finovate alum Experian is the lead investor in the round.

The investment is also the second time Amazon has put capital in the company, having contributed $60 million to BankBazaar’s Series C round in 2015. The company’s total funding stands at north of $115 million.

BankBazaar offers consumers instant customized rate quotes on financial products like loans, mutual funds, and insurance. BankBazaar’s platform enables shoppers to compare offers and apply for products online as well as via its mobile app. More than 50 of India’s top financial companies and insurance firms are featured on BankBazaar’s platform, which also provides information on personal finance trends and tips on how consumers can manage their finances better.

Founded in 2008 and headquartered in Chennai, India, BankBazaar has been a Finovate alum since 2012 when the company demoed its real-time credit processing platform. Last year, the company announced a partnership with furniture and home products marketplace Pepperfry, teamed up with Ujjivan Small Finance Bank for Personal Loans, and added business cards to its offerings courtesy of a collaboration with Yes Bank.

Earlier this year, BankBazaar CEO Adhil Shetty told LiveMint that the company was “on track” to reach profitability in fiscal 2020 and that he was looking to take the company public “in the next few years.” He added that the company has more than 40 million registered customers and recently experienced an average 46% gain in monthly revenue. This was immediately before the challenge of the coronavirus pandemic became clear to many, a topic the company addressed in an open letter last month.

“Digital demand is only going to increase as consumers seek to minimize all physical interactions during and post COVID-19 and we are working on a war footing to ensure people get safe digital access to credit,” Shetty wrote along with co-founders Arjun (COO) and Rati (CPO) Shetty. “We are actively working with leading industry bodies and lenders to develop deeper digital access, something that will become the new normal in a post COVID-19 world.”

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Sila, a Startup Founded by Shamir Karkal to Rethink ACH, Raises $7.7 Million

Sila, a Startup Founded by Shamir Karkal to Rethink ACH, Raises $7.7 Million
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Blockchain-based payments company Sila announced today it has pulled in $7.7 million in Seed funding. The round was led by Madrona Venture Group and Oregon Venture Fund with contributions from Mucker Capital, 99 Tartans, Taavet Hinrikus, and Jerry Neumann.

Sila was co-founded in 2018 by Shamir Karkal, one of the entrepreneurs who co-founded Simple in 2009 and was responsible for integrating the challenger bank’s system into BBVA after it was acquired by the mega bank in 2014 for $117 million. Karkal now serves as Sila CEO.

The company will use today’s funds to accelerate growth, introduce new product features, and acquire more customers. As part of today’s deal, Madrona Venture’s Hope Cochran and Oregon Venture’s Rick Holt will join Sila’s board of directors.

The Portland, Oregon-based company has a single API that offers what it’s termed Infrastructure-as-a-Service. Overall, Sila helps companies authenticate consumers via a partnership with Alloy, connect with consumer bank accounts via a partnership with Plaid, and move money. All three of these capabilities come together to enable companies to create their own in-app, white-labeled digital wallet. Sila’s customers range from startups to established businesses working in finance, insurance, real estate, and blockchain.

To power the funds transfers, Sila is using SILA, its own ERC token that is pegged to the U.S. penny. Since the money is held in Evolve Bank and Trust, a traditional bank, all funds are FDIC insured.

“The global financial system is broken,” said Karkal. “(It) doesn’t serve consumers, small businesses, or the innovators trying to reach them. It is too expensive, inefficient, tightly regulated, and difficult to integrate into fintech applications.” Sila is addressing these challenges in multiple ways, one of which is its price point. The company’s pricing ranges from $0 per month plus fees for startups, to just under $10k per month plus fees for enterprises.

As for what’s next, Sila is currently working on adding support for card payments, business ID verification, and international payments. The company, however, has yet to disclose timing on these projects.

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Yapily Locks in $13 Million in New Funding

Yapily Locks in $13 Million in New Funding
By David Penn Posted on
Categories: Daily news, Funding
Photo by icon0.com from Pexels

Open banking platform for Fortune 500 companies like IBM, Yapily has picked up $13 million (€12 million) in Series A funding. The round was led by Lakestar and takes the company’s total capital to $18 million. Also participating in the funding were existing investors HV Holtzbrinck Ventures and LocalGlobe, as well as angel investors including TransferWise’s Taavet Hinrikus and Twilio’s Ott Kaukve.

This week’s funding comes a year after the company’s last capital infusion – a seed investment of $5.4 million. Yapily will use the new funds to help support adoption of open banking by institutions across Europe.

Based in London and founded in 2017 by former Goldman Sachs executive Stefano Vaccino, Yapily helps drive open banking adoption by connecting banks to fintechs and other financial services providers. The company notes that its recurring revenues have grown by more than 5x over the past six months. Yapily also has increased the size of its London office to 45 employees, and expanded into Italy, Ireland, and France.

“We believe open banking is a force for good. Using our API and infrastructure, we’re not only providing our partners with strong and powerful connectivity to boost their user experiences,” Vaccino said. “But we’re also giving their customers, whether they be customers or businesses, greater control of their finances, through the creation of products and services which can fuel greater financial management and accessibility.”

Vaccino added that this flexibility for institutions and developers was especially valuable “during this period of uncertainy.” This point was echoed by Lakestar partner Stephen Nundy who cited the COVID-19 outbreak in crediting Yapily’s technology as being “best placed” to support financial innovation that drives business growth “across the financial ecosystem.”

In addition to IBM, Yapily includes GoCardless and Intuit Quickbooks among its customers.

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Lunar’s $22 Million Boosts Series B Funding Total to $50 Million

Lunar’s $22 Million Boosts Series B Funding Total to $50 Million
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Nordic challenger bank Lunar announced a new tranche of funding today, boosting its Series B round. The new $21.6 million (€20 million) installment adds to the $28 million (€26 million) the digital bank disclosed in August of last year.

Today’s investment brings the company’s Series B round to $49.6 million (€46 million) and raises its total funding to $74.7 million. Leading the extension round is Seed Capital, with participation from Greyhound, Socii, Augustinus, and Unity Technologies founder David Helgason.

Lunar’s free bank account includes transfers, payments, debit card, billpay, and access to in-app budgeting tools. The Premium accounts offer a fancier-looking card, three personal accounts, travel insurance, virtual cards, and more at a cost of just under $7 (69 krona) per month. The challenger bank also offers a business bank account for $194 per year that integrates with third-party software providers comes with commercial lending opportunities.

Lunar was founded in 2015 and received its banking license in August of last year from the Danish Financial Supervisory Authority. In all, the company touts 150,000 users. Ken Villum Klausen is founder and CEO.

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EVO Payments Raises $150 Million to Help Manage COVID-19 Crisis

EVO Payments Raises $150 Million to Help Manage COVID-19 Crisis
By David Penn Posted on
Categories: Daily news, Evo Snap*, Funding

Merchant acquirer EVO Payments, the parent company of EVO Snap, has secured $150 million in cash to help fortify the company’s balance sheet, retire debt, and provide funding for future investment opportunities during the COVID-19 crisis. Private equity firm Madison Dearborn, a major shareholder in the company, led the investment.

“While EVO’s global portfolio represents a diversified mix of merchants across Europe and North America,” the company explained in a statement, “many of these merchants operate in markets that are subject to broad governmental restrictions on movement and commerce, resulting in substantial reductions in merchant transaction count and volumes.”

In addition to the funding, EVO Payments has launched initiatives to lower fixed costs and capital expenditures over the balance of fiscal 2020. The company’s CEO James G. Kelly said that the “long-term fundamentals of EVO’s business remain strong” and that the current strategies will enable the company to continue to grow.

Founded in 1989 and currently active in 50 markets around the world, EVO Payments acquired the technology that powers the EVO Snap development platform in 2013. EVO Snap makes it easy for developers, independent software vendors, and merchants to develop omni-channel and cross-border payment solutions. The company participated in our developers conference, FinDEVr Silicon Valley, offering a presentation and workshop on building customized loyalty programs, card-linked offers, and real-time POS rewards.

EVO Payments is publicly-traded on the Nasdaq under the ticker EVOP. The company, headquartered in McLean, Virginia near Washington, D.C., has a market capitalization of $1 billion. EVO services more than 500,000 merchants in North America and Europe, processing 900+ million transactions in the former and 1.7 billion transactions in the latter each year.

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Updated: More Than $1.3 Billion Raised by 14 Alums in Q1 of 2020

Updated: More Than $1.3 Billion Raised by 14 Alums in Q1 of 2020
By David Penn Posted on
Categories: Funding, Fundings, Quarterly Funding
Photo by Skitterphoto from Pexels

Updated: 4/3/20: Added Paystand’s $20 million fundraising from February.

Finovate alums raised more than $1.3 billion in the first quarter of 2020, matching their best, first quarter performance to date from two years ago. In some ways, this year’s haul is even more impressive in that Q1 of 2020 featured half the horses as Q1 of 2018.

It is hard to not be aware of the shadow that the current coronavirus pandemic is casting over funding prospects for fintech ahead of the second quarter of the year. With regard to Finovate alums in specific, the $1.8 billion in funding they brought in for Q2 2019 would be a hard mark to beat in any year – let alone one with the sort of historic challenges we are facing in 2020.

Previous Quarterly Comparisons

  • Q1 2019: $468 million raised by 20 alums
  • Q1 2018: $1.3 billion raised by 26 alums
  • Q1 2017: $230 million raised by 20 alums
  • Q1 2016: $656 million raised by 32 alums

Far and away, the $500 million raised by Revolut was the biggest fundraising of the quarter by our alums. But the nine-digit investments picked up by Tradeshift, Flywire, and Tink would put these companies at the top of any of our quarterly equity investment lists in recent years, as well. And with only a baker’s dozen of alums getting funding this quarter, it is no surprise that the top ten equity investments shown below comprise the vast majority of the quarter’s total at $1.2 billion or more than 99%.

Top Equity Investments

  1. Revolut: $500 million
  2. Tradeshift: $240 million
  3. Flywire: $120 million
  4. Tink: $100 million
  5. Thought Machine: $83 million
  6. Currencycloud: $80 million
  7. Fenergo: $80 million
  8. Lendio: $55 million
  9. Arkose Labs: $22 million
  10. Trusona: $20 milllion

Here is our detailed alum funding report for Q1 2020.

January: More than $440 million raised by four alums

February: More than $775 million raised by five alums

March: More than $117 million raised by five alums

If you are a Finovate alum that raised money in the first 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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Arkose Labs Locks in $22 Million for its Fraud Fighting Technology

Arkose Labs Locks in $22 Million for its Fraud Fighting Technology
By David Penn Posted on
Categories: Alumni News, Arkose Labs, Daily news, Funding

In a round led by Microsoft’s venture capital arm, M12, anti-fraud solutions provider – and FinovateSpring Best of Show winner –Arkose Labs has raised $22 million in Series B funding. The round, which takes the company’s total capital to more than $36 million, also featured participation from existing investors PayPal and USVP.

“Our platform takes a zero-tolerance approach to cyber-attacks and our team is committed to putting a stop to the global fraud epidemic,” Arkose Labs CEO and founder Kevin Gosschalk said. He praised both Microsoft and M12 for their recognition that the challenge of cybersecurity is to “eliminate fraud, rather than contain it.”

Global Head of M12 Nagraj Kashyap noted that Microsoft was no stranger to Arkose Labs’ work in fraud-fighting. “Multiple Microsoft businesses are already benefiting from this innovative technology,” he said. “With Arkose’s end-to-end anti-fraud platform, enterprises across the globe can better protect against fraud and abuse long-term.”

San Francisco, California-based Arkose Labs offers an authentication system that identifies the context, behavior, and reputation of requests, recognizing them as either authentic or inauthentic. Authentic requests are passed through, while inauthentic requests are remediated with a set of dynamic defenses. Requests that cannot be recognized are processed via a challenge-response mechanism until there is evidence of the request’s authenticity. This process also helps improve the platform’s real-time decisioning, reducing the number of false positives over time.

The platform helps defend against a variety of threats including ATO (account takeover), scraping, spam, gift card abuse, and other fraud. Microsoft Director of Identity Security Alex Weinert credited Arkose Labs for offering a cybersecurity solution that is as efficient as it is effective. “Arkose Labs’ technology is an important component of our multi-pronged approach to minimize fraud without negatively impacting legitimate customers,” he said.

Arkose Labs said that the funding will help drive platform development and fuel global expansion, as well as enable the firm to add talent. The investment comes in the wake of the firm’s near doubling of its customer base and the introduction of a number of platform enhancements. These additions include new functionality for Arkose Detect, the platform’s dynamic risk engine, and for Arkose Enforce, the platform’s adaptive step-up mechanism.

“2019 was a banner year, with our platform detecting and preventing $500 million fraud attacks over the last twelve months,” Gosschalk said in January, “saving our customers hundreds of millions in fraud losses and operational costs.”

Founded in 2015, Arkose Labs was recognized by CNBC in its 2019 Upstart 100 roster. The company’s VP of Marketing and Strategy, Vanita Pandey, and Senior Producer, Hedda Peters, won Women in Cybersecurity awards at Cyber Defense Magazine’s Cyber Defense Global Awards last fall.

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Eigen Technologies Hauls in $42 Million to Bring NLP Tech to Financial Services

Eigen Technologies Hauls in $42 Million to Bring NLP Tech to Financial Services
By David Penn Posted on
Categories: Alumni News, Daily news, Eigen Technologies, Funding
Photo by Digital Buggu from Pexels

Natural language processing technology innovator Eigen Technologies has added $5 million (£4 million) to its Series B, taking the round’s total to $42 million and giving the firm more than $60 million in overall capital. The funding comes from ING Ventures and is part of a “broader strategic partnership” that blends Eigen’s NLP technology with ING’s experience in applying machine learning to financial services.

Eigen Technologies co-founder and CEO Dr. Lewis Z. Liu put the investment from ING in the context of the two firms’ years-long relationship. “(We) have found them to have some of the most advanced thinking in the market in the application of machine learning in financial services,” Liu said, “something that comes from their fantastic innovation culture.”

ING currently uses Eigen’s NLP technology in its LIBOR replacement and loan operations. Via the strategic partnership, the companies will accelerate deployment of Eigen’s technology in other areas, including trade finance and small business banking.

Eigen leverages machine learning to extract data from a diverse range of documents, and then integrate that data into the workflows of its customers. The company’s algorithms use pattern recognition to examine words, phrases, and sections of text to help businesses review documents for compliance purposes, automatically extract granular information from asset portfolios, and has applications in fraud identification, contract negotiation, and other activities.

ING Chief Innovation Officer and CEO of ING Ventures Benoît Legrand praised Eigen’s ability to deploy its technology in multiple use cases such as retail and wholesale banking. “This partnership will allow both companies to work closer together when implementing use cases through data and process analysis,” Legrand said, “so as to accelerate Eigen’s advantage in NLP as well as ING’s digital transformation.”

Eigen Technologies demonstrated its technology at FinovateFall 2019. The company has teamed up with more than 25% of the G-SIBs (globally systematically important banks), as well as major asset managers, insurers, hedge funds, and law firms. Eigen was founded in 2014 and has offices in London, U.K. and New York City.

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AlphaPoint Garners Additional $5.6 Million in Funding

AlphaPoint Garners Additional $5.6 Million in Funding
By Julie Muhn (@julieschicktanz) Posted on
Categories: AlphaPoint, Daily news, Funding

Digital asset exchange platform AlphaPoint has raised $5.6 million in funding. The news follows the company’s last round in 2018 when it pulled in $15 million. Today’s investment brings AlphaPoint’s total funding to $23.9 million.

AlphaPoint will use the cash to further develop its white label exchange and brokerage platform. The New York-based company will also work to create “sophisticated exchange features” such as margin trading, integrated advanced brokerage capabilities, and premium liquidity solutions.

“This capital injection enables AlphaPoint to continue delivering on our mission to enable access to digital assets globally. We are still in the early days of adoption and utilization of blockchain technology” said AlphaPoint CEO and Cofounder Igor Telyatnikov. “Stay tuned in 2020 as we will soon announce the release of a series of new liquidity, leverage, and lending products and solutions to our customers.”

AlphaPoint has also appointed two new members to its Board of Directors, Tim Scheve, President and CEO of Janney Montgomery Scott, and Jan Mayle, CEO and Founder of The Mayle Group. “The blockchain industry is evolving quickly and AlphaPoint is well positioned to help financial institutions cross the chasm and participate in the digital asset ecosystem,” said Mayle. “I look forward to lending my capital markets experience and helping AlphaPoint in its next chapter of growth.”

Founded in 2013, AlphaPoint powers digital asset exchange networks for companies across the globe. The company also maintains the AlphaPoint Distributed Ledger Platform (ADLP), which interoperates with more than 20 ledger technologies to digitize financial instruments, create trading venues, and reduce operational overhead. AlphaPoint is headquartered in New York with offices in Philadelphia, San Francisco, and North Carolina.

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