Funding

LendingFront Locks in $4 Million in Series A

LendingFront Locks in $4 Million in Series A
By David Penn Posted on
Categories: Funding, LendingFront

In a round led by Information Venture Partners, Newark Venture Partners, Revel Partners, and Contour Venture Partners, SME lending solution provider LendingFront has raised $4 million in funding. The new capital will help the Newark, New Jersey-based company bring its white label underwriting and small business financing technology to more banks and FIs.

“Traditional financial institutions need new tools to serve the evolving needs and expectations of small business owners,” LendingFront co-founder and CEO Jorge Sun explained. “LendingFront allows banks to compete with technology-based lenders and keep up with the changing regulatory environment.”

Newark Venture Partners’ managing partner Dan Borok praised LendingFront’s “sleek” and “streamlined” platform as a significant improvement over the outdated legacy lending technology many banks continue to use. Calling demand for cloud-based lending solutions for SMEs “significant,” Borok pointed to LendingFront’s technology as a way for incumbent FIs to better serve small business clients.

Also participating in the round were existing investors Struck Capital, ValueStream Ventures, and Las Olas VC. The company noted that the new capital will be used to help grow the company’s sales, marketing, and engineering teams, as well.

LendingFront demonstrated its Small Business Platform at FinovateFall 2016. The solution automates lending operations by consolidating processes that are typically conducted by multiple disparate systems. The end-to-end solution provides application workflow for loan processing, a data engine to cull data for underwriting, a decision engine, offer screens, documentation and booking functionality, and servicing. LendingFront notes its solutions have enabled banks to boost loan approvals by 30%, reduce processing time from four weeks to one day, and lower operational costs by 80%.

LendingFront was founded in 2015 by Sun and CTO Dario Vergara, who met as members of OnDeck’s founding management team. The company includes Paynet and fellow Finovate alums Envestnet | Yodlee and Experian among its partners.

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Quantum-Safe Security Specialist ISARA Raises $10 Million

Quantum-Safe Security Specialist ISARA Raises $10 Million
By David Penn Posted on
Categories: Funding, ISARA

Here’s alumni funding news that slipped beneath our radar: Canadian cybersecurity firm ISARA picked up a $10 million investment last month. The company, which specializes in developing quantum-safe cryptographic solutions that can be integrated into commercial products to defend against quantum computer-based cyberthreats, demonstrated its technology at our developers conference, FinDEVr London 2017.

“The global economy and our daily lives are built around a secure online ecosystem that will crumble in the face of a full-scale quantum computer,” ISARA CEO Scott Totzke explained. “Ensuring that the many significant benefits of quantum computing can be realized requires a robust set of quantum-safe security and encryption practices that are practical, affordable and agile.” Totzke said his company’s goal was to ensure that institutions are able to “enter the Quantum Age with confidence and optimism.”

The November investment was led by Shasta Ventures and adds to an $11.5 million investment ISARA received from Quantum Valley Investments in 2015. The company’s total funding now stands at $21.5 million.

Because quantum computers are more effective at factoring large numbers compared to classical computers, there is a rising danger that cybercriminals will use quantum computing technology to take advantage of the fact that modern encryption standards are based on large-number factoring. Totzke has warned that cyber attacks leveraging quantum computing technology could be possible as soon as 2026, and that quantum risk assessment and transition planning should be a fundamental part of a company’s cybersecurity strategy. To this end, ISARA provides quantum-resistant algorithms and integration tools – such as its ISARA Radiate Security Solution Suite – to empower organizations to integrate quantum-safe security into their products and networks.

Shasta Ventures Partner Nitin Chopra said quantum computing would force “a wholesale, generational rethinking of how we secure the digital environment.” Chopra praised ISARA not only as “the clear leader” in quantum-safe security solutions, but also as “the only company with commercial solutions that can be implemented today.”

Founded in 2015 and based in Waterloo, Ontario, Canada, ISARA Corporation partnered with BlackBerry in October, enabling the handheld device maker to offer a quantum-resistant code signing service to defend against quantum computer-powered attacks. Also this fall, ISARA launched its ISARA Catalyst Agile Digital Certificate Technology. ISARA Catalyst allows multiple cryptographic signature algorithms to be used in a single digital certificate. This lowers redundancy and enables users to switch easily from classical to quantum-safe encryption as circumstances require.

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FI.SPAN Raises $4 Million for U.K. and Australia Expansion

FI.SPAN Raises $4 Million for U.K. and Australia Expansion
By Julie Muhn (@julieschicktanz) Posted on
Categories: FI.SPAN, Funding

Financial services management platform FI.SPAN has some extra holiday spending cash, thanks to a new round of funding led by BDC Capital’s Women in Technology Venture Fund. The round also features participation from FinTop Capital, VFF, Panache Ventures and others. The $4 million investment brings FI.SPAN’s total funding to $6 million.

The Canada-based company will use the funds to expand its operations to the U.K. and Australia, as well as grow its Vancouver, B.C.-based team. FI.SPAN currently employs 20 people in its New York and Vancouver offices, and it hopes to double its Vancouver workforce within the next year-and-a-half.

FI.SPAN CEO Lisa Shields told BIV.com that she’s not worried about Brexit impacting the company’s U.K. expansion. “Brexit, to be honest, for my particular business doesn’t affect us that much and the market is massive in the U.K.,” Shields said. “Because we sell to banks, we’re less impacted by Brexit.”

Above: Shields and with co-founder Clayton Weir demo at FinovateFall 2018

Shields co-founded FI.SPAN in 2016 and recently demoed the company’s ERP Connectivity Suite at FinovateFall 2018 in New York.  The company’s white-labeled service designs, builds, and maintains live connections to online and cloud-based accounting systems. The company’s API services suite helps banks build out their APIs to offer clients third-party connectivity. Similarly, FI.SPAN’s Fintegration suite helps banks integrate with fintechs and securely manage data exchange between the two parties.

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ShopKeep Closes $65 Million to Boost Small Business Financing Tool

ShopKeep Closes $65 Million to Boost Small Business Financing Tool
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, ShopKeep POS

In its largest round of funding yet, point of sale (POS) technology company ShopKeep POS closed on $65 million in combined debt and equity funding, bringing its total funding to just over $72 million.

The investment was led by Tribeca Venture Partners and included all of the New York-based company’s major existing investors. New contributors include First Data Corporation and Salesforce Ventures. The debt portion of the round comes from ORIX Growth Capital and Square 1 Bank.

“We are extremely fortunate to be backed by some of the top investors in both fintech and SaaS. With the latest investments from Salesforce Ventures and First Data, ShopKeep has firmly established its position as a leader in SaaS based point-of-sale and payment platforms,” said ShopKeep CEO Michael DeSimone.

Founded in 2008, ShopKeep offers iPad-based POS software for retail, restaurants, and franchises. Not only does the technology process transactions and payments, it also offers inventory tracking, staff management, marketing capabilities, and provides reporting and analytics tools. The company will use the funds to boost its Android-based platform, which it launched in May of this year; expand ShopKeep Capital, an initiative that provides working capital to ShopKeep customers; and explore international markets.

“With our recurring revenue almost tripling in the past 3 years, the small business community continues to show incredibly promising – and accelerating – growth potential. ShopKeep will continue working tirelessly to deliver small business owners with technology and digital tools to fuel their businesses and compete in today’s marketplace at all levels,” DeSimone added.

ShopKeep is headquartered in New York City, with offices in Oregon, Illinois, and Belfast. The company’s founder Jason Richelson demoed the point-of-sale platform at FinovateSpring 2012. ShopKeep processes more than 289 million transactions for 25,000 merchant clients across the U.S.

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More Than $400 Million Raised by 19 Alums in Q3 2018

By David Penn Posted on
Categories: Funding, Fundings

After racking up more than $1 billion in funding last summer, Finovate alums secured more than $400 million in funding over July, August, and September of 2018. This year marked the second time in the past four years that a billion-dollar third quarter was followed the next year by a significantly less bountiful Q3 in terms of equity financing.

Interestingly, eight of our 19 fundraising alums in the third quarter did not disclose the amounts of their investments. And while this does not provide any specific clues to the exact amounts of equity financing involved, it is noteworthy that undisclosed investments in AdviceRobo and Personetics both represented minority stakes taken by KPMG and United Overseas Bank, respectively.

Previous Quarterly Comparisons

  • Q3 2017: More than $1 billion raised by 31 alums
  • Q3 2016: More than $500 million raised by 30 alums
  • Q3 2015: More than $1 billion raised by 40 alums
  • Q3 2014: More than $194 million raised by 17 alums

If Q3 represented a small step in the funding growth for our alums overall, it was a giant leap for the quarter’s top fundraiser, Gusto. The $140 million in funding picked up by the payroll, benefits, and HR platform in July nearly doubled the firm’s total funding, and boosted the company’s valuation to almost $2 billion.

And you’ve got to hand it to Bambu. The three million raised by the Singapore-based robo advisor pales in comparison to the capital raised by its fellow top ten alums in Q3. But Bambu is the only company in the quarter’s top ten to have won not one, but two Best of Show awards, once at FinovateAsia 2017 and again last month at FinovateAfrica 2018.

Top Ten Equity Investments for Q3 2018

  • Gusto: $140 million
  • Flywire: $100 million
  • Zopa: $57 million
  • ThetaRay: $30 million
  • Deserve: $17 million
  • SynapseFI: $17 million
  • Wonga: $13 million
  • BlueVine: $12 million
  • Cortera: $10 million
  • Bambu: $3 million

Here is our detailed alum funding report for Q3 2018.

July 2018: More than $285 million raised by nine alums

August 2018: More than $87 million raised by six alums

September 2018: More than $28 million raised by four alums

If you are a Finovate alum that raised money in the third quarter of 2018, 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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Plaid Raises $250 Million Series C Round Led by Mary Meeker

Plaid Raises $250 Million Series C Round Led by Mary Meeker
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, Plaid

Provider of APIs for financial infrastructure, Plaid, closed a $250 million Series C round. The company’s founders, Zach Perret and William Hockey, discussed the funds in a blog post today, along with Plaid’s plans to “reinvest in the fintech ecosystem,” an industry they say is “just getting started.”

The investment, which boosts Plaid’s total funding to $310 million, comes with celebrity endorsement from Mary Meeker. Meeker led the round and will join the company’s board of directors. Additional investors include Andreessen Horowitz, Index Ventures, Goldman Sachs, NEA, and Spark Capital.

“Plaid has built an important underpinning for financial services on the web and mobile. Plaid allows businesses to rapidly launch innovative products, drive growth and enhance consumer satisfaction. We are excited about the evolution and potential ahead,” Meeker said.

The San Francisco-based company will use the funds to onboard new employees and expand its operations. “We’re focused on shipping and scaling products that will both serve the growth and scale of these customers, and become the foundation for fintech for decades to come,” the founders said in the blog post. “Every company is becoming a fintech company…. Plaid’s role is to empower these innovators with a platform—and a data network—that delivers access to the financial system.”

TechCrunch, which pinned Plaid as a company to watch in 2019, reported that Plaid is now valued at $2.65 billion. This is up significantly from the company’s last valuation in 2016, which sat at $200 million after Plaid’s $44 million Series B round.

At FinDEVr San Fransisco 2014, Perret gave a presentation about leveraging the Plaid API for financial infrastructure. Since then, the company has grown to 175 employees and offers six products, including Auth, an account authentication tool; Balance, which pulls account balance information in real-time; Identity, which leverages bank data to verify consumer identity; Transactions, which pulls bank statement data across banks; Assets, a verification of assets tool; and Income, a tool that validates a consumer’s income and verifies direct deposit data.

This May, Plaid launched in Canada– its first international market. The startup also partnered with JPMorgan Chase to help the bank make a move toward open banking by enabling account holders to safely share their financial data with third party fintech applications.

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Pindrop Advances into Smart Devices with $90 Million in Funding

Pindrop Advances into Smart Devices with $90 Million in Funding
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, Pindrop Security

Phone-based fraud prevention company Pindrop closed a Series D funding round today valued at $90 million, bringing the Atlanta-based company’s total funding to almost $213 million. Pindrop is not disclosing its valuation, but did say that it is “much higher” than the $600 million it was valued at after its $75 million funding round in 2016.

Vitruvian Partners led the round. Strategic investors Allegion Ventures, Cross Creek, Dimension Data, Singapore-based EDBI, and Goldman Sachs also participated, along with existing investors, including CapitalG, IVP, Andreessen Horowitz, GV and Citi Ventures.

According to Vijay Balasubramaniyan, co-founder, CEO, and CTO of Pindrop, the company will use the investment to advance in consumer IoT and voice technology while strengthening its existing solutions. Specifically, the company outlined plans to boost its presence in Europe and Asia, citing investments from U.K.-based Vitruvian Partners, Singapore-based EDBI, and Japan-based Dimension Data.

“One of our key goals is to help leading high-growth companies like Pindrop grow in Europe and internationally,” said David Nahama, senior partner at Vitruvian Partners. “We are confident that Pindrop is poised for massive expansion given the company’s depth of engineering expertise, pioneering efforts in machine learning technology and patent portfolio.”

Pindrop will also use the funds to support research and development efforts into providing security solutions for voice-controlled smart devices, including Google Home, smart locks, and connected cars. “Voice is fast emerging as the next generation human user interface with wide consumer and commercial applications, yet security remains a major concern,” said Chu Swee Yeok, chief executive and president of EDBI. “Pindrop’s world class AI voice security technology will be a significant enabler for wider voice UI adoption, beyond call centers.”

Founded in 2011, Pindrop debuted its Phoneprinting technology at FinovateFall 2012 in New York. The technology detects 80% of fraudulent calls into call centers and protects “hundreds of millions” of calls annually. Pindrop is working with eight of 10 of the largest banks as well as the five of the seven largest insurance companies in the U.S. Overall, the company protects more than 200 million consumer accounts and has stopped more than $350 million in voice-based fraud attacks this year.

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Switch Granted $2 Million in Funding

Switch Granted $2 Million in Funding
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, SWITCH

Credit card information management platform SWITCH announced its largest round of funding to-date. The Seattle-based company just closed a $2 million investment, bringing its total funds to more than $2.3 million.

Founded in 2013, SWITCH enables cardholders to automatically update their card-on-file information across multiple accounts. This comes in handy for consumers replacing the 700 million U.S. credit and debit cards that are lost, stolen, or reissued each year.

SWITCH’s technology is embedded into its CardSavr API which it launched in February of this year. The CardSavr API allows card issuers to place new cards into circulation immediately after they are issued instead of waiting for a new one to arrive by mail. SWITCH enhanced the technology earlier this year by integrating voice technology, enabling customers to update card information and add a new card to their account simply by using voice commands.

SWITCH also offers TopWallet (pictured right), a card issuer-branded app that allows cardholders to manage all of their payments and passwords in one place. TopWallet is currently being offered in beta.

“Switch is a win-win-win for card issuers, cardholders and merchants/billers,” said Switch CEO Chris Hopen, who demoed SWITCH’s platform at FinovateSpring 2016. “Merchants and billers want… cards on file in order to operate and provide friction-free purchasing for customers. Top financial institutions gain valuable insight and higher transaction volume by helping their customers with the burden of managing payments online.”

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Modo Receives $13 Million Investment

Modo Receives $13 Million Investment
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, Modo Payments

Payments technology company Modo has just boosted its total funding to $16 million. This comes after today’s successful completion of a $13 million Series A funding round.

Investors include Deutsche Bank– whose participation was announced in August– as well as new and existing strategic and angel investors. Modo will use the funding to grow its team and expand on its offerings.

Deutsche Bank will leverage Modo’s technology to boost its digital business-to-business and business-to-consumer payments and extend its payment capabilities into non-traditional channels such as the mobile wallets and peer-to-peer networks of Alipay, Paypal, M-Pesa, and WeChat.

Rick Striano, managing director of digital product development at Deutsche Bank said the bank is committed to bringing continued innovation to its customers. He anticipates that partnering with Modo and other fintechs will enable the bank to accomplish that goal faster. “We believe Modo has developed a compelling proposition to address the needs of an evolving payments landscape and increasingly digital economy. We are proud to add them to our list of partners,” said Striano.

We have some big ideas for the future of the payments industry, and having these world class investors in our corner puts us that much closer to our goal of reducing friction in payments for everyone,” said Modo CEO Bruce Parker, who founded Modo in 2010. “Completing our Series A is a great way to confirm that we’ve built something great, and this is just the beginning of our growth phase,” he added.

Instead of integrating its solutions, Modo focuses on interoperability. The company exchanges payment data across platforms on behalf of banks, payment networks, and providers, enabling them to store, share, and track payment event data. Modo presented at FinovateFall 2016, where it showcased its Modo Digital Payments Hub. In the past year, the company’s transaction volume has grown 7x. In August, Modo partnered with Etihad to create a loyalty solution as a part of the FinTech Abu Dhabi Innovation Challenge.

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Sezzle’s $100 Million Line of Credit to Fuel Delayed Payment Tool

Sezzle’s $100 Million Line of Credit to Fuel Delayed Payment Tool
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, Sezzle

Alternative ecommerce payment system Sezzle announced last week it pulled in a $100 million line of credit. The new round multiplies the Minnesota-based company’s existing funding by almost 10x, bringing its total raised to just shy of $111 million.

The funding, which comes from Connecticut-based investment firm Bastion, is being used to fuel Sezzle’s new pay-in-2019 initiative with online retailer Tobi. The promotion, which will be available throughout the holidays, gives Tobi.com shoppers interest-free purchase financing. After paying 25% of the purchase price at checkout, shoppers can wait to pay the remaining three-quarters of the purchase, interest-free, until after January 2, 2019, at which point they pay in three equal installments.

Tobi’s target market is focused on young females– a demographic which typically either has no credit or thin credit files. “Because these young consumers are credit-starved, they tend to abandon their online shopping cart instead of clicking through to purchase,” Sezzle CEO Charlie Youakim said. “With our option, those shoppers are more likely to convert to a sale. We even see them spending more and shopping more frequently.”

The pay-in-2019 payment model is a departure from Sezzle’s existing buy now, pay later offering, which typically allows users to spread the repayment of the purchase price across 6 weeks of financing. If the trial with Tobi yields increased sales results, Sezzle plans to move forward with the new financing model with other retailers, as well.

Founded in 2016, Sezzle demoed its alternative payment platform at FinovateFall earlier this year. Last month, the company teamed up with Priority Payment Systems which will offer Sezzle as an option to its merchant clients.

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Revolut Readies for $500 Million Series D

Revolut Readies for $500 Million Series D
By David Penn Posted on
Categories: Funding, Revolut

Revolut, the multi-functional cross-border card and app, is planning a $500 million Series D investment round, potentially enlisting tech giants like Softbank to its roster of investors, reports Henry Vilar of Fintech Futures (Finovate’s sister publication).

According to City AM, the fintech has aggressive plans for expansions, with plans to launch in the U.S. after the investment round. Revolut has seen major regulatory shortcoming preventing it from starting operations there.

Australia and Japan are also on Revolut’s radar.

The round, set to take place early next year, would give the fintech the necessary boost to enter the U.S. market, a particularly difficult geography to crack.

This comes after the firm’s last funding, which had the shocking figure of $250 million.

The unicorn, which has already surpassed the $1.7 billion valuation, has grown fivefold in the past year, despite reporting annual losses.

It is not known whether Revolut’s previous backers, which include Index Ventures, Draper Esprit and DST Global, will sign on to its next round.

Earlier this year, Softbank said it planned to invest around $200 million into fintech, from its $100 billion Vision Fund.

Founded in 2013, London-based Revolut demonstrated its multi-currency card at FinovateEurope 2015. Nikolay Storonsky is founder and CEO.

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MoneyHub Secures Investment from Nationwide

MoneyHub Secures Investment from Nationwide
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, Moneyhub

Financial tools company MoneyHub announced today it received an undisclosed amount of funding from the venture arm of financial services giant Nationwide, which used a portion of its $64.5 million fund to take a minority stake in the U.K.-based fintech.

Tony Prestedge, deputy chief executive at Nationwide Building Society, said, “It’s important that the Society invests for the future to ensure we remain at the forefront of innovation. Investing in start-ups like Moneyhub helps us identify, learn about, and explore new capabilities and technologies that will help deliver our technology strategy both now and in the future.”

Interestingly, this isn’t MoneyHub’s first tie-up with the insurance industry. The company was acquired by South African insurance company MMI Holdings in 2014.

Founded in 2009, MoneyHub offers direct-to-consumer, direct-to-advisor, and enterprise versions of its personal financial management technology. The company aggregates consumers’ financial data onto a single platform to offer a holistic view of their overall financial health. In August, MoneyHub received authorization as a payment initiation services provider from the U.K.’s Financial Conduct Authority. This certification enables the firm to allow users to initiate payments across accounts from within its platform.

In April, MoneyHub solidified its commitment to open banking by partnering with challenger banks Monzo and Starling in an integration that enables the banks’ clients to use the Moneyhub app to link their checking and savings accounts, credit cards, pensions, loans, mortgages, SIPPs, ISAs, and investments. “While we have years of experience in innovating and unlocking the benefits of new technology, we aren’t complacent. We know that by working together with start-ups we can learn from each other and ensure we are best placed to help our members get the most out of new technology in the future,” said Prestedge.

MoneyHub most recently presented at FinovateEurope 2017, where it debuted the SmartAssist tool for the enterprise version of its software. SmartAssist is an intelligent messaging feature that leverages AI to help consumers manage their finances and plan for the future.

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