Funding

Deserve Raises $50 Million in Debt Financing

Deserve Raises $50 Million in Debt Financing
By David Penn Posted on
Categories: Deserve, Funding

 

In rebranding his company from SelfScore to Deserve, CEO Kalpesh Kapadia explained “we believe that access is everything and everyone deserves a chance to build a positive credit history. So we are making our products available to all students, U.S., and international, and to all those who seek to build and/or maintain a good credit history.”

And now Deserve is $50 million closer to serving this broader population of potential customers. The Accel-backed fintech has just secured a $50 million debt facility from Keystone National Group to drive growth in account receivables and help “jumpstart” first-time credit owners’ financial journeys.

“Since launching the Deserve brand in October of 2017 and addressing the needs of young people who are new to credit, we’ve seen a huge response from young adults and college students across the nation,” Kapadia said. He added that the new credit facility from Keystone National Group will help his company “bring deserving consumers to the credit system who are often overlooked by the traditional approach and allow them to pave their path of financial independence.”

Making their Finovate debut as SelfScore at FinovateFall 2014, the consumer analytics company leverages machine learning and alternative data to offer a solution that the company says provides a better measure of creditworthiness than FICO scores. As Deserve, the company’s “credit scoring as a service” platform uses online profiles, phone and sensor data, psychometric questions and what the company calls “360 degree feedback” from the user’s network to give users insights and contextual information to businesses.

Deserve uses this technology in part to help millennials and Generation Z consumers establish and build credit, and earn rewards. Deserve offers consumers three Mastercard-branded credit card options:

  • Deserve Edu: Geared toward college students, Deserve Edu provides 1% cash back, a $5,000 credit limit, a 20.24% variable APR, and no annual fee.
  • Deserve Pro:  Designed for applicants with established credit histories, Deserve Pro offers 3% cash back on travel and entertainment, 2% cash back on restaurants, and 1% cash back on purchases. Deserve Pro Mastercard also provides a credit limit up to $10,000 and a variable APR as low as 17.49%. The card is available to L1 and H1B visa holders, and has no annual fee.
  • Deserve Classic: Designed for applicants looking to build credit, Deserve Classic has a credit limit of $1,500, a variable APR of 24.99%, and a $39 annual fee.

The debt financing announcement from Deserve is the latest big headline from the company since it rebranded as Deserve last fall and announced $12 million in new funding. With total equity financing of $27 million, the company includes Aspect Ventures, Pelion Ventures, Mission Holdings, Alumni Venture Group, GDP Venture, and Accel among its investors. Headquartered in Menlo Park, California, Deserve was founded as SelfScore in 2013.

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SecuredTouch Receives $8 Million Strategic Investment from Arvato Financial Solutions

SecuredTouch Receives $8 Million Strategic Investment from Arvato Financial Solutions
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, SecuredTouch

Israeli behavioral biometrics startup SecuredTouch gained backing from Arvato Financial Solutions this week. The $8 million investment was strategic, and brings the company’s total funding to $11.5 million.

Robert Holm, Senior Vice President of Fraud Management at Arvato said, “Investing in SecuredTouch allows us to partner with a global leader in behavioral biometrics for mobile devices, and to reinforce our online security and fraud prevention services in the best possible manner.” The firm’s President of Risk Management Frank Schlein said that protection against cybercrime is “essential,” and added, “I am really pleased that our involvement with SecuredTouch will enable us to enhance and expand this platform further.”

On the strategic side, SecuredTouch will benefit from Aravato’s established relationships with international players across various industries. Yair Finzi, CEO and founder of SecuredTouch, said, “We see a clear synergy between the offerings and strategies of Arvato Financial Solutions and SecuredTouch. We have created a partnership that will enable SecuredTouch to expand its international presence and enhance its positioning in the areas of fraud and authentication. Arvato Financial Solutions with its international expertise in risk and fraud management is an ideal investor and partner for this purpose.”

SecuredTouch was founded in 2015 and specializes in behavioral biometrics for mobile transactions. As Finzi explained, the company ensures that “legitimate transactions are recognized quickly as such and can be conducted smoothly. The aim is to ensure a secure, fast, and convenient customer experience in mobile transactions, on a sustained basis.” The company maintains a foothold in the security space by leveraging more than 100 parameters to continuously authenticate users in a session without friction. SecuredTouch’s technology is able to differentiate between human and non-human behavior to catch and block would-be fraudsters.

SecuredTouch demoed U-nique, a behavioral biometrics technology that leverages machine learning, at FinovateEurope last month in London. The company also offers U-manobot, malware detection technology; and Continew-ID, a device takeover prevention technology. SecuredTouch’s other investors include Rafael Development Corporation, Eshbol Ventures, and Wellborn Ventures.

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Meniga Receives $3.7 Million to Fuel International Rollout

Meniga Receives $3.7 Million to Fuel International Rollout
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, Meniga

Digital banking and marketing startup Meniga announced it received a $3.7 million (€3 million) investment from Nordic bank Swedbank. This brings the company’s total funding to $27.1 million since it was founded in 2009.

Swedbank’s investment comes after the bank agreed to launch Meniga’s digital banking solutions for its customers in Sweden and in the Baltic countries. Swedbank has more than 7 million retail customers and 625,000 corporate customers. The bank has 218 branches in Sweden and 133 branches across Baltic countries.

Lotta Lovén, head of digital banking at Swedbank, said that the banks’ customers not only prefer a digital experience, but also want relevant offers and services to make life easier. “We see Meniga as an innovation partner to give our customers a digital experience that includes a better overview and insights of all their finances both from Swedbank and external parties. We are very pleased with the agreed partnership,”Lovén added.

Headquartered in London and with offices also in Reykjavik, Stockholm, and Warsaw, Meniga offers white-label digital banking solutions for 50 million digital banking users in 23 countries for banks such as Santander, Intesa, ING Direct, Commerzbank and mBank. At FinovateEurope earlier this year, the company won Best of Show for Richest Transactions, a solution that helps banks leverage data associated with transactions.

This month, the company’s CEO Georg Ludviksson was selected as one of top 200 Fintech leaders in Europe. In February, the company announced a partnership with France’s second largest banking group, BPCE.

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Qapital’s Latest $30 Million to Fuel New Roboadvisory Tools

Qapital’s Latest $30 Million to Fuel New Roboadvisory Tools
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, Qapital

Almost one year after closing a $12 million round of funding, personal finance and mobile banking app Qapital has landed another $30 million, bringing its total funding to $47.3 million.

The investment comes from Swedbank Robur, Norron, SEB Stiftelsen, Athanase, and Northzone. The Stockholm, Sweden-based company will use the funds to build out new roboadvisory capabilities in the form of Qapital Invest, which it plans to launch later this year.

Qapital’s roboadvisory tools will target millennials with a set-it-and-forget-it algorithmic approach that diversifies users’ portfolios based on timing and risk. Users will be able to invest leveraging the company’s customizable savings rules. Notably, Qapital isn’t positioning the investment tool as a way to save for retirement, but rather as another tool to help users speed up savings for mid-term goals, such as a vacation. The company will charge $1 per month for the first $5,000 managed, and 0.25% per year for balances exceeding that amount. This rate is competitive with both Wealthfront and Betterment, which charge a 0.25% annual advisory fee.

Qapital differentiates itself in the PFM space with its If This, Then That (IFTT) savings tool that leverages behavioral economics to get users to save when certain actions are triggered. For example, users can have Qapital set a small amount of money aside each time they visit the gym, every time it rains, or each time Trump tweets. These customizable rules are set up to help users reward themselves for good behavior, deter bad habits, and some are just intended to be ridiculous. Overall, Qapital’s tools have helped users save $500 million.

Qapital CEO and founder George Friedman debuted the app at FinovateSpring 2014 and the company launched in the U.S. in 2015. Qapital now counts 420,000 users of its creative savings tools, a Visa debit card, echecks, and a design-forward banking app. The company doesn’t charge any fees for the above features, and all accounts are FDIC-insured.

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BillShark Lands Funding and Advisory Backing from Mark Cuban

BillShark Lands Funding and Advisory Backing from Mark Cuban
By Julie Muhn (@julieschicktanz) Posted on
Categories: BILLSHARK, Funding

Bill reduction service BillShark received some serious street cred this week. The Massachusetts-based company announced that it has joined forces with another shark– Mark Cuban of Shark Tank fame– who is now advising and backing the company. The financial terms of the agreement were undisclosed, adding to the company’s previous $1.6 million raised.

Under Cuban’s advisory, Billshark and its API will be more visible. Cuban will offer increased brand recognition in places where consumers typically pay their bills.

“We were fortunate to meet Mark and he loved our practical service as well as the potential for our platform,” said Steve McKean, CEO of Billshark. “Monthly subscription bills creep-up over time, seemingly without reason, and Americans overpay for these services by about $50 billion per year. Mark provides unmatched expertise in partnerships, product development and marketing.”

Founded in 2015, BillShark aims to help consumers lower their monthly bills, including TV, wireless, internet, and home security. To ensure they are not overpaying for these services, consumers and businesses upload a photo of an existing bill to the BillShark app, then the BillShark team goes to work negotiating with the biller for a lower rate.

The company’s success is evidenced in the numbers. BillShark frequently saves consumers 25% or more, adding up to hundreds of dollars in savings per year. So far, the company has saved users more than $10 million; the average customer saves about $300 per bill per year. BillShark’s goal is to save users more than $2.7 billion by 2025. “Companies that save their customers both time and money always catch my attention,” said Cuban. “Billshark eliminates the stress of negotiating or cancelling a bill, so its customers can focus on more productive and long-term goals.”

Saving money for users is how BillShark makes its money. The company only charges consumers when it lowers the cost on a bill– this incentivizes the BillShark to maintain a “shark-like” motivation to negotiate a lower rate on a bill. If they can’t get a lower rate on a bill, they don’t charge the user.

BillShark also announced the One Bill, One Child program this week. The program aims to offer middle school students a better financial education to give them the tools they need to successfully manage their finances as adults. For every bill submitted to BillShark, the company pays for a child to receive an hour of financial education from Ramsey Solutions. Billshark’s goal is to educate one million children by 2025.

At FinovateFall 2017, McKean and COO Brian Keaney showcased the bill reduction service. The company started 2018 by partnering with Narmi, which integrated Billshark’s API into its digital banking platform.

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Mortgagetech Company Lender Price Receives Funding from Regions Bank

Mortgagetech Company Lender Price Receives Funding from Regions Bank
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, Lender Price

With housing markets across the country at an all-time high, banks are paying more attention to the mortgagetech space (and maybe you should, too). And, as evidenced in its new partnership with Lender Price, Regions Bank is no exception.

Along with the partnership agreement Lender Price inked with the $124 billion-asset bank, the California-based fintech will also receive an undisclosed amount of equity funding as part of the deal. This announcement comes just days after Lender Price unveiled an integration with Ellie Mae.

For its part, Regions aims to leverage the partnership to enhance its digital lending efforts by:

  • Simplifying interactions between bankers, borrowers, and the bank
  • Sending fewer information requests to consumers
  • Integrating additional data sources for approvals and confirmations
  • Offering faster responses

The Alabama-based bank serves customers across the Southern and Midwestern U.S., and has approximately 1,500 branches and 1,900 ATMs. Logan Pichel, Head of Regions Enterprise Operations said, “This investment in Lender Price and our working agreement provides important growth capital for Lender Price, aligns our mutual interests in digital transformation and continues to move us toward the goal of making banking easier for our customers.”

The funding portion of this agreement reflects the uptick in fintech investments as a whole in the first quarter of this year, when 26 alums raised $1.32 billion. That’s quite an upward trend when compared to the $230 million raised in the first quarter of 2017.

Founded in 2015, Lender Price demoed its mortgage origination automation at FinovateSpring 2017. The company’s technology contributes to banks’ efforts to compete with digital-only mortgage originators such as Quicken Loans’ Rocket Mortgage and SoFi. In fact, Bank of America announced today the rollout of its own digital mortgage service.

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Agreement Express Lands Funding from Frontier Capital

Agreement Express Lands Funding from Frontier Capital
By Julie Muhn (@julieschicktanz) Posted on
Categories: Agreement Express, Funding

Account onboarding specialist Agreement Express received its second round of funding today. The growth equity investment comes from Frontier Capital, which pulled the funds from its $700 million Frontier Fund V closed in 2017. The amount of today’s round was undisclosed, but boosts the Canada-based company’s funding over its previous $1 million raised.

The funds are aimed to help Agreement Express accelerate growth by expanding sales and marketing efforts, hiring more employees, and bolstering technological innovation efforts. As part of the deal, Richard Maclean, co-founder and managing partner at Frontier, along with Frontier’s Managing Partner and Vice President, Dave Pandullo, will join the Agreement Express board.

In a statement, Agreement Express CEO Mike Gardner highlighted on the company’s growth since it was founded in 2001, attributing it to the company’s replacement of complexity with simplicity. “We feel the optimal time has come to take Agreement Express to the next level, and are excited to work with the talented and well-respected team at Frontier as our partner in the next phase of our journey as a growth company. We believe their experience helping transition SaaS businesses such as ours into market leaders will help us propel our innovation and enhance value to our customers in their race to digital sustainability, differentiation, and enhanced profitability, ” Gardner said.

Agreement Express helps financial services companies create and manage a consistent onboarding experience across channels, as well as leverage consumer data to create a personalized user experience. At FinovateFall 2016, the company debuted the newest version of its wealth management offering, an onboarding solution that helps advisers interact with clients in a nonintrusive, compliant manner. Among the company’s clients are National Bank of Canada, Questrade, and M&T Bank.

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WorkFusion’s $50 Million Round to Fuel Robotic Process Automation

WorkFusion’s $50 Million Round to Fuel Robotic Process Automation
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, WorkFusion

Robotic process automation (RPA) technology is a term that’s becoming more and more common in fintech. And thanks to WorkFusion’s $50 million round announced today, it’s a trend that’s gaining even more footing.

This Series E investment was led by Hawk Equity and Declaration Partners, with contributions from previous investors Georgian Partners, iNovia Capital, and NGP Capital. WorkFusion’s total funding now stands at $118 million.

The company also announced today it has appointed former President Alex Lyashok as CEO. Lyashok will take the reins from Co-founder and former CEO, Max Yankelevich, who will transition to Chief Strategy Officer.

Hawk Equity Founder David Hawkins said that WorkFusion is a “clear leader” in leveraging intelligent automation for workforce efficiency. The company plans to use the $50 million to expand its global operations, which is essential to accommodate growing interest in RPA software. According to Lyashok, “Demand for our products grew 850% in 2017, reaffirming the power of AI to automate common business processes such as customer onboarding in banking, claims processing in insurance, or accounts payable in shared services.”

WorkFusion was founded in 2010 and is headquartered in New York City with offices in eight countries throughout Europe and Asia. At FinovateFall 2014, Yankelevich demoed how banks can leverage the company’s active learning automation technology to create workflow efficiencies. Last year, the company partnered with IBA Group to launch a Smart Application for customer support email processing.

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$1.32 Billion Raised by 26 Alums in Q1 of 2018

$1.32 Billion Raised by 26 Alums in Q1 of 2018
By David Penn Posted on
Categories: Funding, Fundings

It seems as if it was only yesterday when we were looking at the first quarter funding numbers for our alums in 2017 and wondering if the slow start was a harbinger of investment stinginess to come.

Fortunately, by the end of 2017, investment in fintech in general and our Finovate alums in specific had rebounded strongly. As the financial world accommodated itself to the incoming Trump administration, so too did fintech investors get back to the business of putting major money behind some of our industry’s most innovative startups. The result was a big year for Finovate alums who raised more than $2.7 billion for 2017, recording their fourth consecutive year of more than $2 billion in funding.

And it looks like the momentum is still going strong. For the first quarter of 2018, 26 Finovate alums have raised more than $1.32 billion in funding combined. This number is not only more than 5x our first quarter funding total from last year, it also rivals any other first quarter in our history – as our quarterly comparison below shows.

Previous Quarterly Comparisons

  • Q1 2017: $230 million raised by 20 alums
  • Q1 2016: $656 million raised by 32 alums
  • Q1 2015: $680 million raised by 29 alums
  • Q1 2014: $600 million raised by 23 alums

What is especially tantalizing about Q1 numbers this year is the high number of undisclosed investments. This quarter, five of the investments were undisclosed. This compares with two undisclosed investments from Q1 2017, five in Q1 2016, one in Q1 2015, and one in Q1 2014. The actual amounts of undisclosed investments can vary widely, of course, but having five such investments in a quarter suggests our real alum funding total for Q1 is actually higher.

Top 10 Equity Investments

  1. Credit Karma: $500 million
  2. NuBank: $150 million
  3. eToro: $100 million
  4. Ledger: $75 million
  5. Wealthfront: $75 million
  6. Alkami: $70 million
  7. defi SOLUTIONS: $55 million
  8. Endor: $45 million
  9. Stash: $37.5 million
  10. Ohpen: $31 million

In terms of the top equity investments in the first quarter, Credit Karma stands out with their secondary investment of $500 million. NuBank’s $150 million comes in second place, with the $100 million raised by eToro being our third largest equity investment of the first quarter of the year. Tied for fourth place are Ledger and Wealthfront, each raising $75 million in funding. The top 10 equity investments in Q1 totaled $1.14 billion or 86% of the quarter’s total funding.

Here is our detailed alum funding report for Q1 2018.

January: More than $338 million raised by ten alums

February: More than $156 million raised by ten alums

March: More than $825 million raised by six alums

If you are a Finovate alum that raised money in the first 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.

Top image designed by Freepik

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Micronotes to Scale AI-Enabled Marketing Platform with $3 Million in Funding

Micronotes to Scale AI-Enabled Marketing Platform with $3 Million in Funding
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, Micronotes

Cloud-based interview marketing company Micronotes has locked in $3 million in funding today, bringing the company’s total amount raised to $8 million. The round was led by TTV Capital, a VC firm focused on early-stage fintech companies. Vestigo Ventures, also an early-stage VC firm with a fintech focus, participated as well.

Micronotes will use the funds to scale its platform by bolstering the support of sales, marketing, and engineering. The Massachusetts-based company focuses on helping banks strengthen customer relationships with a platform-as-a-service (PaaS) that leverages machine learning to match customers with banking products and services.

The company offers three main products. The first is Cross-Sell, which helps banks cross-sell products by conducting a mini-interview with customers about their needs without disrupting core banking functions. NPS Module enables banks to individually measure the net promoter score for a large percentage of its user base, instead of just a small sample. And the Predict Module, which scores how relevant every bank product is to each customer, and help banks to anticipate their needs.

“Micronotes’ vision is to interview the world’s customers, all seven billion, starting with banking customers,” said Devon Kinkead, CEO and co-founder of Micronotes. “The team at Vestigo understands our mission and how data and technology can be applied to financial services to create better, stronger and more profitable customer experiences. We look forward to leveraging Vestigo’s strong operational expertise within financial services to rapidly expand into our beachhead market.”

Micronotes was founded in 2008 by serial entrepreneurs and MIT Sloan School alumni, Devon Kinkead and Christian Klacko. Ian Sheridan, co-founder and managing director of Vestigo Ventures, and a member of the Board of Directors for Micronotes, said that the two “represent the rare combination of deep expertise in AI with the ability to achieve superior business outcomes.” At FinovateSpring 2013, the company demoed how Alliance Federal Credit Union leverages its cross-sell capabilities. Last fall, Micronotes released free downloadable propensity scores to help banks access predictive marketing analytics on their clients.

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DriveWealth Closes $21 Million in Funding

DriveWealth Closes $21 Million in Funding
By Julie Muhn (@julieschicktanz) Posted on
Categories: DriveWealth, Funding

Wealthtech company DriveWealth has closed a Series B round of funding this week. The $21 million investment was led by Raptor Group Holdings, SBI Holdings, and Point72 Ventures. Existing investor Route 66 Ventures also participated. This brings the company’s total funding to just shy of $30 million.

DriveWealth will use the funds to enhance its existing products. The New Jersey-based company offers a suite of APIs that help online brokers, digital advisors, and financial services companies access the U.S. securities market. DriveWealth also has an API that allows partners to integrate native investment experiences into their own mobile applications. Among the company’s investment offerings are real-time, dollar-based investing capabilities that enable any investor to own shares in U.S. equities, regardless of stock price or deposit size.

Robert Cortright, CEO of DriveWealth, said that the company’s mission is to “provide global partners low cost, frictionless access to wealth building products.” He added, “Our solutions provide our partners native integration into their customer facing, mobile applications and reimagine investing for the clients they serve.”

As you may expect, today’s investors had positive things to say about DriveWealth and its business model. Yoshitaka Kitao, Chairman of SBI Holdings commented: “As a pioneer of internet-based financial services, we are excited to add DriveWealth to the world’s first ‘financial ecosystem’ that SBI has now expanded from Japan to worldwide.” Pete Casella, Head of Fintech Investments at Point72 Ventures, said, “DriveWealth has built a world class tech-driven brokerage stack that allows fintech firms to incorporate a wide range of investments capabilities into their product offerings.”

Founded in 2012, DriveWealth’s clients include MoneyLion, a lending and wealth management app, and INVSTR, a U.K.-based stock trading application. At FinovateAsia 2016, the company released a new API to enable partners to offer a robo advisory product suite and a self-directed equity investing platform. In 2016, the company partnered with Alkanza to bring robo advisory solutions to Latin America.

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SpyCloud Lands $5 Million in Funding

SpyCloud Lands $5 Million in Funding
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, SpyCloud

Security breach detection and account takeover prevention service SpyCloud recently brought home $5 million in funding. The Series A round comes courtesy of existing investors Silverton Partners and March Capital Partners. This brings the Austin-based company’s total funding to $7.5 million.

SpyCloud helps prevent account takeovers by proactively identifying exposed accounts as early as possible so that businesses can force password changes for vulnerable accounts before fraudsters take action. The company will use the new funds to fuel product development, conduct deeper security research, expand its database of assets, and grow its team.

The company was founded in 2016 and emerged from stealth mode a year later. Since that time, SpyCloud has compiled a database of 32 billion exposed accounts, leaked passwords, and pieces of personally identifiable information; it adds billions of new account data points every month. This data repository is available to service providers via an API to help prevent customer account takeover. SpyCloud has protected tens of millions of accounts for notable companies across a variety of industries, including finance, retail, and healthcare.

“There isn’t a company in the world that doesn’t run the constant risk of having its employee or customer accounts exposed, and that leads to a host of other issues,” said Ted Ross, CEO and co-founder of SpyCloud. “The only chance businesses stand against these increasingly-proficient criminals is to know as soon as possible which accounts have been exposed and to take preventative measures well before credentials make it onto the dark web.”

SpyCloud CEO and Co-Founder Ted Ross, along with Head of Business Development, Chris LaConte, gave a Best of Show-winning presentation at FinovateFall 2017. The company also has the honor of winning the NATO Communications and Information (NCI) Agency Defense Innovation Challenge. We published a profile on SpyCloud, along with an interview with Ross, last fall.

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