Funding

VATBox Brings in $20 Million

VATBox Brings in $20 Million
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, VATBox

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Automated VAT recovery solution VATBox landed $20 million in funding today. The round was led by Target Global Fund. Existing investor Viola Private Capital, as well as other private investors, also participated.

Combined with the company’s first round, this brings VATBox’s total funding to $50 million since it was founded in 2012. Today’s round will accelerate the company’s international expansion and facilitate product development. VATBox’s SaaS offering is an automated, global VAT recovery service for businesses. Shmuel Chafets, Target Global partner, highlighted VATBox’s potential when he said, “We believe that within a few years VATBox’s services will become an integral part of the financial infrastructure for every international company.”

At FinovateEurope 2015, the company launched VATBox2, an automated version that leverages qualified and validated data to deliver full visibility and compliance. The company’s clients include Fortune 500 companies such as Amazon, Eli Lilly, Dell, and 3M. In May of last year, VATBox was listed among the top promising startups in Israel and one month earlier was selected as a finalist for Red Herring’s Top 100 Europe award.

February seems to be making up for the recent slump in fintech funding. This is the seventh alum funding we’ve seen this month— the 5th this week alone (and it’s only Wednesday!). Including today’s rounds, ten alums have closed on more than $100 million in funding so far this year.

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Bitbond Closes on $1.2 Million in Funding

Bitbond Closes on $1.2 Million in Funding
By Julie Muhn (@julieschicktanz) Posted on
Categories: Bitbond, Funding

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If peer-to-peer lending isn’t hip enough to pique your interest, how does bitcoin lending sound? That’s exactly what Germany-based Bitbond is doing that earned them $1.2 million in investor funding today. This boosted the online SME lender’s total funding to $2.3 million.

The round was led by mobilike founder Şekip Can Gökalp. Other contributors include Fyber founders Janis Zech and Andreas Bodczek as well as Kreditech co-founder & CEO Alexander Graubner-Müller. Founder & CEO of Bitbond Radoslav Albrecht said, “We are happy to have such experienced investors supporting us on this exciting journey.” According to Albrecht, the funds will help Bitbond to “make lending and borrowing globally accessible” by furthering product development and growing its user base in underserved markets. Currently, the company has 76,000 registered users from 120 countries.

Since launching in 2013, Bitbond has extended 1,600+ loans worth $1.2 million. The company matches investors with SME borrowers from across the globe by leveraging the blockchain for cross-border payment processing. In October of 2016, Bitbond received a regulatory license from German regulator BaFin, making it one of the first regulated blockchain-based financial services providers.

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Bitbond’s Radko Albrecht (CEO & Founder) and Jarek Nowotka (CTO) on stage at FinovateFall 2016 in New York

At FinovateFall in September, the company launched automated, universal scoring for SME lending. As Albrecht said in his demo, “The main challenge about creating an international platform is credit scoring, because data is different from one country to another.” The new offering solves this with its scalable, automated scoring mechanism that offers applicants an instant loan decision.

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Qumram’s Regtech Offering Lands $1.49 Million

Qumram’s Regtech Offering Lands $1.49 Million
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, Qumram

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Here’s more proof that regtech is coming of age– Switzerland-based Qumram closed on $1.5 million in funding today. This brings the company’s total funding to $6.2 million.

Today’s funds come from Madrid-based Mundi Ventures, a technology-focused VC firm that also operates in Barcelona, London, and Seattle. In addition to the funding, Mundi will provide due diligence support and will offer Qumram access to corporate executives, new markets, and new customers via the Mundi Club, a global network of 500+ Spanish business leaders.

Regarding the purpose of the new round, Qumram CEO Patrick Barnert said, “These funds are continuously applied to international expansion, with strong focus on the financial services markets of Europe, the U.K., and U.S.A. Qumram has already gained great traction in the US. Our first client win was Russell Investments, and other financial institutions followed soon after.”

Founded in 2011, Qumram offers banks technology that lets them record and replay all digital activity and interactions with clients. The movie-like playback gives banks an auditable record for compliance purposes. In addition to facilitating compliance, Qumram offers internal and external fraud detection, as well as actionable insights that inform banks how to improve the user experience. At FinovateFall 2016, the company showcased its regulatory compliance tool that facilitates client communication. In September of last year, Qumram debuted a social media recording solution that is compliant with WhatsApp and in August won Swisscom Startup Challenge 2016.

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PayPal Acquires TIO Networks in $230 Million Deal

PayPal Acquires TIO Networks in $230 Million Deal
By David Penn Posted on
Categories: Funding, Fundings, PayPal, TIO Networks

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In a cash deal valued at $233 million ($304 million CAD), PayPal Holdings has agreed to acquire Canada’s TIO Networks. PayPal President and CEO Dan Schulman praised the way the company’s combination of digital platform and physical, in person locations made billpay “simpler, faster, and more affordable” – particularly for the underbanked. TIONetworks_HamedShahbaziChairman and CEO of TIO Networks, Hamed Shahbazi (pictured), emphasized this point as well. “We founded TIO to make speed and access part of the bill payment experience for the underserved, and we believe that we have created affordable products to serve the needs of all customers,” Shahbazi said.

TIO Networks will continue to operate as a service within PayPal after the acquisition, which is still pending shareholder approval. The purchase price of the Vancouver, British Columbia-based company, which made its Finovate debut in 2012, represented a premium of more than 25% of its recent share price. PayPal anticipates completing the acquisition in the second half of 2017.

Among the strategic benefits of the acquisition, according to PayPal, is the addition of 14 million consumer bill pay accounts with an estimated 60 million transactions processed as of TIO’s fiscal 2016. In addition, TIO Networks:

  • Processes more than $9 billion in bill payments a year
  • Accepts payments at more than 70,000 locations nationally
  • Provides access to more than 10,000 billers in network
  • Serves a wide variety of verticals including:
    • financial services companies
    • wireless carriers
    • insurance companies
    • app developers
    • national and local retail chains
    • general loan providers

TIO Networks was founded in 1997 and is headquartered in Vancouver, British Columbia, Canada. The company demonstrated TIO MobilePay at FinovateSpring 2012. Five-year revenue growth of 125% helped TIO Networks make Canada’s 2016 PROFIT 500 list last fall, and in May, the company rebranded its consumer-facing acquisition, Chargestmart from 2014, as TIO.com. One of the top two tech companies in the 2016 TSX Venture 50, TIO was named by the Canadian Innovation Exchange as one of Canada’s 20 “hottest most innovative” public tech companies.

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AutoGravity Earns Multi-Million Euro Investment from Daimler

AutoGravity Earns Multi-Million Euro Investment from Daimler
By David Penn Posted on
Categories: AutoGravity, Funding, Fundings

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AutoGravity, one of FinovateFall’s Best of Show winners, picked up a major, “double-digit million euro investment” from Daimler Financial Services. The funding adds to the $50 million AutoGravity has raised since its founding in the fall of 2015, and comes as the company’s nationwide rollout reaches 46 states in the U.S.

Bodo Uebber, member of Daimler AG’s board of management, said the investment in AutoGravity was a “strategic step” in opening digital sales channels in leasing and financing. “We believe AutoGravity and its technology have the potential to revolutionize the sector for online financing while, at the same time, offering a digital platform for other financial services providers and automotive manufacturers,” Uebber said. Daimler Financial Services board chairman Klaus Entenmann called AutoGravity “a new star rising in the digital world.”

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Pictured: AutoGravity CMO Serge Vartanov demonstrating the company’s auto financing solution at FinovateFall 2016.

Quoted in AutoFinanceNews, AutoGravity Chief Marketing Officer Serge Vartanov added that the investment from Daimler was a major show of confidence in the company’s platform and potential for growth. “That Daimler has recognized the technology and sees the potential in transforming that shopping and financing experience for the consumer,” Vartanov said, “I think is a really good validation of what we’ve been building.” He added that because AutoGravity is lender-agnostic, Daimler’s investment in the technology will benefit not just its loan originations at its own Mercedez-Benz Financial Services, but will help auto lending more broadly, as well.

AutoGravity’s mobile app gives prospective new and used car buyers and leasers the ability to search for vehicles, complete credit applications, and get up to four personalized financing offers. With more than 150,000 downloads, the free app is available in iOS and Android. Read more about AutoGravity in our profile from earlier this year.

Founded in 2015 and headquartered in Irvine, California, AutoGravity won Best of Show at its Finovate debut last September at FinovateFall 2016. In November, the company announced that its technology would power the digital auto sales and finance app from Fletcher Jones Motorcars. AutoGravity’s app was listed by Forbes in September as one of the “best new personal finance apps and sites.” Andy Hinrichs is CEO.

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Rippleshot Racks Up $2.6 Million in Second Seed Round

Rippleshot Racks Up $2.6 Million in Second Seed Round
By David Penn Posted on
Categories: Funding, Fundings, Rippleshot

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Chicago-based anti-fraud, transaction monitoring specialist Rippleshot has raised an additional $2.6 million in seed funding. The investment, led by the venture capital arm of CUNA Mutual Group, CMFG Ventures, takes the company’s total funding to $4.6 million. Rippleshot will use the additional capital to add technical talent, specifically developers and data scientists, and will leverage its relationship with CMFG to market its solutions to 9,000 of CMFG’s affiliated credit unions.

Rippleshot co-founder and CEO Canh Tran said that the funding comes as his company finds itself “in a unique place to help bridge the fraud detection gap between issuers and merchants.” Rippleshot’s technology enables card issuers to catch card data breaches early, track trends in compromised card activity to identify future vulnerabilities, reissue new cards to customers whose cards have been compromised, and issue real-time declines to limit losses. Rippleshot’s cloud-based technology monitors millions of credit card transactions a day and the company says it can prevent “more than half of the fraudulent spend from compromised cards.”

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Pictured: Rippleshot Chief Scientist and Co-Founder Randal Cox demonstrating Rippleshot’s platform at FinovateFall 2014.

In addition to the funding from CMFG, Rippleshot announced that emerging payments specialist – and former PYMNTS.com president – Gloria Colgan will join the company’s advisory board. Tran said that Colgan’s presence on Rippleshot’s board “will be invaluable as we take the next step in growing our footprint.” Colgan was managing director for Market Platform Dynamics and an SVP at both Discover Financial Services and JP Morgan Chase.

Founded in 2013 and headquartered in Chicago, Illinois, Rippleshot demonstrated its technology at FinovateFall 2014. Last fall, the company was recognized by H2 Ventures and KPMG as one of its “50 Emerging Stars.” And last June, Rippleshot’s card-compromise detection solution, Sonar, was endorsed by the American Bankers Association. A graduate of the SixThirty accelerator program, Rippleshot was a finalist in BBVA’s Open Talent Competition.

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WorkFusion Closes $35 Million in Funding

WorkFusion Closes $35 Million in Funding
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, WorkFusion

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Today’s investment in WorkFusion is a reminder that AI is one of the hottest trends in fintech. With AI already proving to be one of the hottest trends in fintech this year, the news of today’s investment is not surprising. The AI automation company announced today it raised $35 million in a round led by Georgian Partners. Existing investors Mohr Davidow Ventures, iNovia, Nokia Growth Partners, Greycroft, and RTP Ventures also participated in the Series D round, bringing the company’s total funding to $71 million.

New York-based WorkFusion plans to use the funds to “accelerate customer adoption of AI-powered automation.” Justin LaFayette, Managing Partner at Georgian Partners said he invested in WorkFusion because it “has made machine learning practical and powerful for enterprise operations.”

Founded in 2010, WorkFusion leverages self-learning and automation to eliminate manual, back-office work. The company also offers AI-powered chatbots to assist with front-office operations. At FinovateFall 2014, WorkFusion debuted Active Learning Automation, a system that actively tracks human work to establish patterns and automatically trains algorithms to follow those patterns.

The company highlighted a number of its 2016 successes in today’s press release:

For further coverage, check out our Finovate Debuts feature on WorkFusion.

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$700 Million Raised by 26 Alums in Q4 2016

By David Penn Posted on
Categories: Funding, Fundings

Finovate/FinDEVr alums raised more than $700 million in the fourth quarter of 2016. Total fourth quarter investment in Q4 2016 was more than double last year’s Q4 total, and represented a gain of more than 40% over the previous quarter’s total.

Previous Quarterly Comparisons

  • 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
  • Q4 2013: More than $294 million raised by 17 alums

The biggest equity deal of the final quarter of 2016 was $180 million raised by Payoneer in October. Also worthy of note was the $115 million raised by PaySimple, and the $80 million raised by NuBank. For the fourth quarter of 2016, the top 10 overall investments totaled $593 million or more than 84% of the total alum funding for the quarter.

Top 10 Overall Investments (equity only)

  1. Payoneer: $180 million
  2. PaySimple: $115 million
  3. NuBank: $80 million
  4. BlueVine: $49 million
  5. Finicity: $42 million
  6. Nutmeg: $37 million
  7. Quantopian: $25 million
  8. Personal Capital: $25 million
  9. Lendio: $20 million
  10. SecureKey: $20 million

These Q4 numbers for Finovate/FinDEVr alums suggests that the pace of investment in fintech innovation remains robust. With a $700 million Q4, the total investment in our alums for 2016 is more than $2.3 billion. This compares to a $3 billion 2015, a $2.2 billion 2014, and a $825 million 2013.

Here is our detailed alum funding report for Q4 2016.

October 2016: More than $371 million raised by eight alums

  • Aire: $2 million – post
  • DeMystData: $7 million – post
  • FinanceIt: $17 million – post
  • Lendio: $20 million – post
  • Nanopay: $10 million – post
  • Payoneer: $180 million – post
  • PaySimple: $115 million – post
  • SecureKey: $20 million – post

November 2016: More than $97 million raised by eight alums

  • Finagraph: $5 million – post
  • figo: $7 million – post
  • Five Degrees: $10 million – post
  • Nutmeg: $37 million – post
  • P2Binvestor: $7. 7 million – post
  • Sezzle: $1.85 million – post
  • TrueLink Financial: $3.6 million – post
  • Quantopian: $25 million – post

December 2016: More than $235 million raised by eleven alums

  • BlueVine: $49 million – post
  • Finicity: $42 million – post
  • Hip Pocket: $150,000 – post
  • Kreditech: $10.4 million – post
  • NuBank: $80 million – post
  • Nutmeg: $14.6 million – post
  • Personal Capital: $25 million – post
  • Socure: $13 million – post
  • Tradeshift: undisclosed – post
  • Walletron: undisclosed – post
  • Zighra: $1 million – post

If you are a Finovate alum that raised money in the second quarter of 2016, 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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Dwolla Raises Capital, Relaunches Access API

Dwolla Raises Capital, Relaunches Access API
By David Penn Posted on
Categories: Dwolla, Funding, Fundings

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Writing at the Dwolla blog, company founder and CEO Ben Milne expressed how important the goal of “building the ideal API to move money” was to him and his company. Calling this “part of our DNA,” Milne wrote that the new opportunities Dwolla’s technology has created have “come with growth and the need to finance it.”

And finance it Dwolla has. The company picked up $6.85 million in new funding in a round led by Union Square Ventures and Foundry Group. Milne wrote that the investment will be used to expand Dwolla’s sales and account management operations in Des Moines, Iowa. The round featured participation from Detroit Venture Partners, Firebrand Ventures, High Alpha, Ludlow Ventures, and Next Level Ventures, and brings Dwolla’s total capital to just over $39 million. Firebrand Ventures founder John Fein was quoted in the Kansas City Star crediting Dwolla for rekindling his interest in supporting fledgling technology companies.

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Pictured: Dwolla Director of Communications and Policy Affairs Jordan Lampe demonstrating FiSync at FinovateSpring 2015.

Milne also announced his company’s API Suite, Access API, will now contain all of Dwolla’s white label solutions. “Nothing changes for current customers,” he noted, “but additional features will be rolled into the Access API to make building software that connects to the banking infrastructure easier.” These features, according to TechCrunch, include same-day transfer and a new dashboard for managing transactions. Fortune.com notes that Access API “has attracted more than 100 customers in its first year.”

Founded in 2008 and headquartered in Des Moines, Iowa, Dwolla demonstrated its FiSync technology at FinovateSpring 2015. The company partnered with open source subscription billing and payments platform, Kill Bill, last October and, in August, introduced a new dashboard and administrative interface for its white-label partners. Dwolla added more FIs to its instant account-verification flow back in May.

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Payfone Lands $23.5 Million in Funding

Payfone Lands $23.5 Million in Funding
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, Payfone

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Mobile authentication company Payfone closed a $23.5 million round of funding today. BlueCross BlueShield Venture Partners and Andrew Prozes led the round, while new investors Strauss Zelnick, Maclab Development Group and Transaction Network Services, along with existing investors RRE Ventures, Opus Capital, Relay Ventures, Early Warning Services, American Express Ventures, Verizon Ventures, and Rogers Venture Partners also contributed.

This Series E round brings the New York-based company’s total funding to just over $66 million and bolsters Payfone’s Board of Directors with the addition of Mike Spadafore of Sandbox Industries and Andrew Prozes, the former CEO of LexisNexis.

When it launched in 2008, Payfone sought to fight the mobile payments battle but pivoted just over 3 years ago to focus on mobile authentication solutions. In its former life as a payments company, Payfone launched 1 Touch Checkout at FinovateFall 2012 in New York. Today, the company offers a non-intrusive authentication option for end clients that uses the identity of their mobile phone to offer persistent protection against fraud.

At the 2015 Fierce Innovation Awards, Payfone won the Over-the-Top (OTT) Monetization and Customer Security categories. In 2016, the company deployed its technology at a Tier-1 bank in the U.S., marking 50 million bank accounts protected by Payfone.

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Nutmeg Closes $14.6 Million Series D Round

Nutmeg Closes $14.6 Million Series D Round
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, Nutmeg

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U.K.-based wealth management company Nutmeg brought its total funding to $90 million today after closing its Series D round, which was led by Taipei Fubon Bank.

The news comes hot on the heels of Nutmeg’s most recent funding when it scored $37 million in Series C funding last month from Convoy, Hong Kong’s largest firm of independent financial advisers. Adding two Asian investors in the past two months comes as a hint as to what’s next for the roboadvisor. Nutmeg CEO Martin Stead told TechCrunch,

There is a very significant market opportunity before us, in the U.K. and beyond, and we are going to capture it. With these new funds, we will continue to invest in product innovations which disrupt the industry and deliver a better deal–and a better experience–for customers. And, we are going to expand into new categories and new territories.

Expansion into the Asia Pacific region is a logical move, since it’s currently experiencing a fintech boom, while the U.S. market is saturated (see our wealth tech coverage for more on this).

Nutmeg, which manages $735 million for its 25,000 clients, debuted its digital wealth management technology at FinovateEurope 2012 in London. In early 2016 the company was recognized on the European Top 100 List at the European Fintech Awards, and the company’s former CEO and founder Nick Hungerford was named one of the U.K.’s coolest people in fintech. In May of 2016, Martin Stead, Nutmeg’s former chief revenue officer, assumed the role of CEO.

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Nubank Raises $80 Million in Series D Funding

Nubank Raises $80 Million in Series D Funding
By Julie Muhn (@julieschicktanz) Posted on
Categories: Funding, Nubank

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Financial services innovator Nubank closed on $80 million in Series D funding led by DST Global earlier this month, marking DST’s first investment in a Brazilian company. Other participants in the round include Founders Fund, QED Investors, Redpoint, Ribbit Capital, Sequoia, and Tiger.

This is Nubank’s sixth round of funding and brings its total amount raised to $178 million. While there was no report of the company’s latest valuation, FT Partners reports that after its $52 million Series C round closed in January, Nubank was valued at $500 million. The company will use the funds to accelerate hiring efforts and expand its product offerings. Specifically, Nubank hopes to add a rewards program and add more credit products.

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Founded in 2013, Nubank offers a Mastercard credit card with a companion mobile app that features PFM capabilities, spending alerts, and a card-lock feature. The company has had success in differentiating itself from other financial institutions in Brazil, which offer credit cards with 400% APR. In comparison, Nubank’s APR comes in significantly lower at 145%. This differentiation has led to Nubank receiving 7 million applications for its card, which currently holds a waiting list of 500,000 applicants.

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Nubank Co-founder and CTO Edward Wible, along with Lucas Cavalcanti, lead software engineer, showcased at FinDEVr New York 2016 (pictured above) in a presentation titled Our Money, Our Rulebook. which explored how Nubank deals with real-time, double-entry accounting on a per-customer basis. In October, H2 Ventures and KPMG listed Nubank among 50 leading fintech companies.

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