Funding

Insurtech Innovator CoverHound Fetches $58 Million in New Funding

Insurtech Innovator CoverHound Fetches $58 Million in New Funding
By David Penn Posted on
Categories: CoverHound, Funding

Insurtech pioneer CoverHound announced today that it has closed a $58 million Series D round. The funding was led by global insurance firm, Hiscox, and featured participation from a variety of major insurance providers including Chubb, Aflac Ventures, and Japan’s MS&AD. The company’s total capital now stands at more than $112 million.

“The future of digital insurance will continually shift to more non-traditional insurance brands,” CoverHound CEO Keith Moore said. “CoverHound has built the leading P&C platform to enable any brand’s customers to easily quote, compare, and buy personal, business, and cyber insurance.”

In a statement, CoverHound said the new capital would help fuel continued development of its CyberPolicy subsidiary, as well as support expansion of its offices beyond Northern California to Charlotte, North Carolina. The funding will also support the firm’s international growth plans, including expansion into Japan.

Since inception, CoverHound has sold more than 200,000 policies, providing insurance consumers with the ability to shop for and select insurance solutions online. CoverHound’s curated list of best insurance options for both personal and business insurance needs brings choice and transparency to the insurance market.

Additionally, the company’s licensed advisors help make sure that insurance buyers receive any and all eligible discounts that may apply to their policies. Using CoverHound is free – the company is paid by the carriers on the platform – helping keep insurance costs low for consumers.

Giving the company high marks for sharing its “passion for making material strides in the changing SMB landscape,” Hiscox USA EVP of Small Business Insurance Kevin Kerridge praised the company for “leading the charge in providing a best-in-class digital cyber solution for businesses.” Kerridge highlighted CoverHound’s CyberPolicy subsidiary, which helps SMEs deal with the potential costs of cyberattacks by providing first party coverage for immediate responses costs associated with a data breach, as well as third party coverage to claims brought by customers and clients.

Launched in 2016, CyberPolicy became the first marketplace for SMEs to shop and purchase cyber insurance online in minutes. The subsidiary’s offerings have since expanded to include 98% of small business types with as much as $250 million in revenue.

“Cyber insurance is one of the fastest growing insurance products for small businesses,” said GM of Small Business Insurance at Progressive Insurance, Bill Kampf, whose firm partnered with CoverHound’s CyberPolicy last year. “Progressive wants to make finding insurance easier for the small business owner, and by working with CyberPolicy, we can offer consumers an efficient platform to shop for cyber insurance and easily find coverages to help protect their business.”

Founded in 2010, and based in San Francisco, California, CoverHound demonstrated its platform at FinovateFall 2013. The company partnered with Clearsurance, an online insurance consumer data publisher, last September. CoverHound’s Head of Engineering and Product, Kjersten Elias, was featured in an interview with Women in Business back in November.

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Alt Credit Scorer Aire Scoops Up $11 Million in Growth Funding

Alt Credit Scorer Aire Scoops Up $11 Million in Growth Funding
By David Penn Posted on
Categories: Aire, Funding

Alternative credit assessment innovator Aire has picked up $11 million in new funding. The London-based company, which demonstrated its Aire Credit API at FinovateEurope 2015, said the new capital will support the continued development of its credit insight engine, as well as support expansion in the U.S.

This week’s investment adds to the $5 million Aire raised in the summer of 2017, and takes the company’s total funding to $23 million.

“Aire is built on the premise that empowering consumers to play an active role in their credit assessment is the only way to give lenders a comprehensive view with which to make a decision,” company co-founder and CEO Aneesh Varma said.

Calling the announcement a “significant milestone,” Varma highlighted the participation of Experian Ventures, the venture arm of fellow Finovate alum and credit bureau giant, Experian. “This Series B funding is allowing us to push the Aire philosophy further into new markets, such as the U.S., as well as new sectors,” he said.

Aire improves the credit decisioning process by providing lenders with the tools they need to accurately assess thin file credit histories. When an applicant’s initial credit check reveals insufficient information, the applicant is directed to an Aire Interactive Interview. The applicant answers a series of tailored questions to create a “three-dimensional” view of their finances, focusing on issues such as affordability, stability, and financial resilience. Aire then creates and delivers a score based on this data that gives lenders insight into the applicant’s creditworthiness in the future rather than the past.

This latest funding for Aire was led by Crane Venture Partners, and featured participation from Orange Digital Ventures as well as Experian Ventures. The round comes two years after the company earned Financial Conduct Authority (FCA) approval, and accompanies news that Aire has scored more than $10 billion in credit across a variety of consumer credit categories.

Krishna Visvanathan, Crane Venture Partners founding partner praised Aire’s “unique contextual decisioning methodology” which he said “combines direct consumer engagement, new data sources, and (a) dynamic algorithm model” to help lenders make more accurate assessments of credit risk.

“Aire is yet another great example of a category-leading enterprise software company formed in Europe that is fundamentally changing an industry,” Visvanathan said, “and we are proud to support its new phase of growth.”

Aire was founded in 2014. The company’s partners include Zopa and the UK. arm of auto financing company, Toyota Financial Services.

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New Funding Helps Featurespace Fight Fraud in Financial Services

New Funding Helps Featurespace Fight Fraud in Financial Services
By David Penn Posted on
Categories: Featurespace, Funding

Fraud detection and risk management specialist Featurespace has raised $32.3 million (£25 million) in a round led by Insight Venture Partners and MissionOG. With participation from existing investors IP Group, Highland Europe, TTV Capital, Robert Sansom, and Invoke Capital, the investment takes Featurespace’s total funding north of the $71 million mark.

“We have made tremendous progress over the last 15 months since our last fundraising,” Featurespace CEO Martina King said, “and this fund raise is the largest to date.” King added that the new capital will be used to help fuel the company’s international expansion via a focus on “products, people, and customers.”

“We have also grown our financial services customer base and now are working with 17 banks across continental Europe, the U.K., the U.S., and Latin America,” King said. She noted that Featurespace had also become the “technology partner of choice” for many payment processors and merchant acquirers who have made Featurespace’s technology a part of their own fraud prevention efforts.

Based in Cambridge, U.K., with offices in London and Atlanta, Georgia, Featurespace demonstrated its ARIC Fraud Manager at FinovateFall 2016. The technology leverages behavioral analytics, anomaly detection, and machine learning to understand behavior and identify risk more accurately in real-time. Compared to traditional, rule-based anti-fraud solutions, Featurespace’s ARIC provides better fraud detection without increasing the incidence of false positives.

The company is off to a big start in 2019. Recognized by the Technology Association of Georgia (TAG) in its list of the 40 most innovative companies in the state, Featurespace partnered with business consultancy everis earlier this month. The company also announced that international bookmaker and gaming operator SKS365 would use its technology to provide real-time fraud protection.

Last fall, Featurespace teamed up with new U.K. clearing bank, ClearBank; partnered with Danske Bank, the largest bank in Denmark; and released a white label version of its ARIC fraud and risk technology. Founded in 2005, Featurespace is a member of the Inc. 5000 Europe.

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Finovate Alums Raise More than $4 Billion in 2018, $802 Million in Q4

By David Penn Posted on
Categories: Funding, Fundings

Finovate alums raised more than $800 million in the final months of 2018, taking the year’s fundraising total over the four billion mark.

This achievement represents the biggest fundraising year for Finovate alums, and serves as a testament to the enduring commitment to fintech innovation by a broadening community of investors.

Previous Annual Comparisons

  • 2017: $2.7 billion raised
  • 2016: $2.3 billion raised (Q1, Q2, Q3, Q4)
  • 2015: $3 billion raised
  • 2014: $2.2 billion raised

The fourth quarter of 2018 was also one of the biggest fourth quarters for our alums in recent years.

Previous Quarterly Comparisons

  • Q4 2017: More than $730 million raised by 23 alums
  • Q4 2016: More than $700 million raised by 26 alums
  • Q4 2015: More than $302 million raised by 28 alums
  • Q4 2014: More than $1.4 billion raised by 26 alums

The quarter’s top equity investments were the $300 million raised by fintech unicorn Coinbase, and the $250 million raised by Plaid, a veteran of our developers conference, FinDEVr. In sum, the top investments of Q4 2018 represented 97% of the quarter’s known total. Note that investments for three alums (and specifically the equity portion of a fourth alum’s combined debt and equity fundraising) were undisclosed.

Top 10 Equity Investments

  • Coinbase: $300 million
  • Plaid: $250 million
  • Pindrop: $90 million
  • Quid: $37.5 million
  • Zopa: $20.7 million
  • Klarna: $20 million
  • PayActiv: $20 million
  • Thought Machine: $14.4 million
  • Modo: $13 million
  • Finn AI: $11 million

Here is our detailed alum funding report for Q4 2018

October 2018: More than $388 million raised by seven alums

  • Coinbase: $300 million – post
  • Finn AI: $11 million – post
  • Klarna: $20 million – post
  • PayActiv: $20 million – post
  • Ondot: undisclosed – post
  • Quid: $37.5 million – post
  • Zenmonics: undisclosed – post

November 2018: More than $58 million raised by six alums

  • Anorak: $6.5 million – post
  • Meniga: $3.4 million – post
  • Modo: $13 million – post
  • Moneyhub: undisclosed – post
  • Thought Machine: $14.4 million – post
  • Zopa: $20.7 million – post

December 2018: More than $356 million raised by six alums

  • FI.SPAN: $4 million – post
  • ISARA: $10 million – post
  • ShopKeep POS: $65 million (combined debt and equity) – post
  • Switch: $2 million – post
  • Pindrop: $90 million – post
  • Plaid: $250 million – post

If you are a Finovate alum that raised money in the fourth quarter of 2018, and do not see your company listed, please drop us a note at [email protected]. We would love to share the good news! Funding received prior to becoming an alum not included.

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Symbiont Closes $20 Million Series B in Round Led by Nasdaq Ventures

Symbiont Closes $20 Million Series B in Round Led by Nasdaq Ventures
By David Penn Posted on
Categories: Funding, Symbiont

Blockchain outfit Symbiont has closed a $20 million Series B funding round led by Nasdaq Ventures with participation from additional new investors including Galaxy Digital, Citi, Raptor Group, and others, reports Henry Vilar of Fintech Futures (Finovate’s sister publication).

Symbiont has developed a platform for institutional applications of blockchain technology.

The firm will use this funding round for deployments across various sectors including data management, mortgages, private equity, and syndicated loans.

“Our investment will also include the integration of Symbiont’s enterprise blockchain and smart contract platform into the Nasdaq Financial Framework,” said Gary Offner, head of Nasdaq Ventures.

Symbiont CEO and co-founder Mark Smith said: “Leveraging our financial markets and blockchain technology experience, our anchor partners like Vanguard, Lewis Ranieri, and Nasdaq will benefit from developing new distributed applications on Assembly, our enterprise blockchain and smart contract platform.”

Assembly enables financial institutions to maintain the peer-to-peer nature of their transactions with no central authority, while also getting a shared database with end-to-end privacy.

Symbiont received a big investment by Medici Ventures back in July 2017.

Founded in 2015, the company participated in our developers conference, FinDEVr Silicon Valley, in 2016. At the event, Symbiont CTO and co-founder Adam Krellenstein presented Distributed Ledgers and Smart Contracts, a look at the architecture of the company’s Smart Securities system.

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New Investment in Zafin to Drive Innovation in Financial Services

New Investment in Zafin to Drive Innovation in Financial Services
By David Penn Posted on
Categories: Funding, Zafin

Financial services software provider Zafin picked up $17.2 million in funding this week. The Series B round, led by Accenture Ventures, Beedie Capital, and Vistara Capital Partners, takes the company’s total financing to more than $47 million, and follows Zafin’s partial acquisition and strategic alliance between the company and Accenture announced in December.

In a statement, the company said the funding will help it “fully execute” its business plans, including expanding market share worldwide. Zafin founder and Group CEO Al Karim highlighted four areas – open banking, core transformation, AI, and machine learning – where he believed the company and its investment partners can deliver value.

Zafin’s technology powers strategic pricing, product, and customer strategies to help FIs increase profitability, deliver more personalized services and solutions, and compete more effectively. Alan McIntyre, head of Accenture’s global banking practice, praised Zafin’s offerings, noting how the company helped “financial institutions to improve pricing, personalization, and product make-up without having to replace their legacy systems.” McIntyre said this was especially important “for many of those not among the top ten players in the market.”

Vistara Capital Partners founder and managing partner Randy Garg was impressed by the company’s traction. “Zafin’s innovative solutions have become increasingly known amongst global banks as the sector continues to go through its technologically driven evolution,” Garg said. “Over the past several years of our involvement, it has been very satisfying to see the levels of adoption taking place with many of the world’s most discerning bank customers.”

Zafin demonstrated its miRevenue Enterprise Banking platform at FinovateFall 2017. The company was recognized by Deloitte as one of the fastest growing companies in Canada in 2016, and today has more than 40 global banking customers in the U.S., Canada, Europe, and Asia. Zafin was founded in 2002, and is based in Toronto, Ontario, Canada.

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Nutmeg Raises $58 Million in Goldman Sachs-Led Funding

Nutmeg Raises $58 Million in Goldman Sachs-Led Funding
By David Penn Posted on
Categories: Funding, Nutmeg

Nutmeg, the alternative investment app, has completed a $58.7 million (£45 million) fundraise led by the Goldman Sachs Principal Strategic Investments Group, and Convoy, the Hong Kong-based financial advisory firm, reports Henry Vilar of Fintech Futures (Finovate’s sister publication).

It aims to use the funding to expand, with “an international B2B plug-and-play partnership model which leverages its proprietary technology.”

Convoy will help Nutmeg launch into Hong Kong later this year, according to the firm. Convoy first invested in the firm in 2016.

This is the largest ever investment into a digital wealth manager in Europe, according to Nutmeg.

Nutmeg currently counts 60,000 customers in the U.K., out of which 40% of our customers have never invested before; 35% are female, compared to a market average of just 26%; and the average age of our investor is 40, around ten years younger than the industry average.

Goldman Sachs is well known for making long-term investments in “fast-growing” technology companies.

Some recent examples include alternative SME finance provider Capify and cyber firm Immersive Labs.

Nutmeg demonstrated its online investment manager at FinovateEurope 2012. Headquartered in London, and founded in 2010, this week’s investment brings the company’s total funding to more than $147 million. Martin Stead is CEO.

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New Investment for LendUp Spurs Credit Card Spin Off 

New Investment for LendUp Spurs Credit Card Spin Off 
By David Penn Posted on
Categories: Funding, LendUp

San Francisco, California-based LendUp has picked up funding from LL Funds LLC, Invus Opportunities, and QED Investors.

As part of the investment, the company will spin off its credit card business, Mission Lane, as a separate, stand-alone entity. The transition will enable LendUp to focus on personal loans, gamified financial education, and savings. The company’s credit card business – as well as its IP, technology platform, and staff – will comprise Mission Lane. Vijesh Iyer, LendUp COO, will serve as interim CEO of the new company.

“While most of the financial services industry is aimed at the prime and near-prime end of the credit spectrum, these moves set not just one, but two companies up for long-term success,” explained Frank Rotmann, QED Investors co-founder. “Now LendUp and Mission Lane are better positioned to serve the more than half of Americans who lack access to high quality financial services.”

The amount of the funding was undisclosed. Prior to this latest capital infusion, the company had raised more than $361 million.

In addition to its investment news, LendUp announced a new CEO, Anu Shultes. A 25-year veteran of subprime credit and financial services industry and formerly LendUp’s GM, Shultes helped drive the company’s loan originations to more than 5.5 million short-term loans adding up to $1.7 billion.

“We’re on track to profitably expand into new consumer segments and geographies, launch new loan products, double new customer originations, and carry on our mission to help anyone get on a path to better financial health,” Shultes said in a statement. Former CEO and LendUp co-founder Sasha Orloff will remain with the company as a board member and advisor to Mission Lane.

Founded in 2011, LendUp demonstrated its platform at FinovateSpring 2014. A graduate of the Y Combinator accelerator program, LendUp was featured in the Wall Street Journal last August in a look at how fintechs were entering the subprime lending space. In June, the company was profiled by Center for Financial Services Innovation (CFSI) as one of its Financial Health Leaders for 2018 along with fellow Finovate alums like Finicity and Moven.

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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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