Less than a month after securing a $37 million debt financing from BMO’s Technology and Innovation Banking Group, mobile application development platform Kony is back in the fintech headlines with even bigger news: the company has agreed to be acquired by digital banking technology giant and fellow Finovate alum Temenos for $559 million and an earn-out of $21 million.
The acquisition will bolster Temenos’ ability to compete in the digital front office solutions market, specifically strengthening the company’s Infinity offering – which currently has more than 500 banking customers and is widely recognized as a leading technology by industry analysts from Forrester and Gartner. Kony Chairman and CEO Thomas Hogan will serve as President of Temenos North America, post-acquisition, and will join the company’s Executive Committee.
“The power of the Temenos portfolio, combined with Kony’s digital banking applications and multi-experience development platform, will bring the industry’s most robust suite of applications for delivering service, value, and efficiencies from the digital edge to the modern core,” Hogan said. “The strength, scale, and commitment of Temenos will also help protect and extend our market-leading innovation.”
The acquisition is expected to be completed by Q4 2019, and is subject to standard regulatory approvals.
Calling Kony the #1 SaaS digital banking company in the U.S., Temenos CEO Max Chuard highlighted the synergies between Kony and his company. “We are acquiring a digital front office product that has already been successful in the U.S. market and is connected to most third party cores,” Chuard said. “We are also adding a significant amount of exciting functionality and ease of generating customer journeys and experiences that will accelerate Temenos Infinity, providing banks in both North America and internationally with an unrivaled customer experience and omnichannel banking product.”
A long-time Finovate alum, Kony first demonstrated its technology at FinovateFall 2010, and returned to the Finovate stage two years ago for FinovateFall 2017 to present its retail banking solution. Founded in 2007 and based in Austin, Texas, Kony launched its Conversational AI DevKit earlier this month to enable businesses to deploy new technologies to improve customer engagement. In May, Kony announced that its Quantum digital experience development platform would power the new CareLogic mobile app from Qualifacts, and unveiled a new partnership with multiple Finovate Best of Show winner and fellow alum, MX.
Headquartered in Geneva, Switzerland, Temenos demonstrated its Connect Mobile Banking solution at FinovateEurope 2015. The company is also an alum of our developers conference, having presented its B2B Financial Marketplace at FinDEVr Silicon Valley – also in 2015. More than 3,000 banks in 150+ countries – including 41 of the top 50 banks – rely on Temenos’ banking technology to process the daily transactions and interactions of more than 500 million banking customers.
Kony is the second major acquisition by Temenos this year. In July, the company announced its purchase of explainable AI innovator Logical Glue and plans to integrate the company’s machine-learning-as-a-service technology into its cloud-native banking solution. Aside from acquisitions, Temenos has been on an energetic partner-making pace, working with IIG Bank, who agreed to use the company’s Infinity digital front office platform earlier this month; as well as teaming up with FIs like Israeli bank Mizrahi-Tefahot, New Zealand’s TSB Bank, and Pakistan’s Bank of Khyber.
An infusion of $37 million in debt financing from BMO will help cloud-based digital banking and low-code platform company Kony “accelerate growth” in its two signature solutions: KonyDBX, the company’s digital banking technology, and Kony Quantum, its low-code development platform. The financing, courtesy of BMO’s Technology and Innovation Banking Group, adds to the more than $115 million in funding Kony has raised to date.
“Finding a strong and committed capital partner who understands digital is an important complement to our market-leading IP and aggressive growth agenda in both digital banking and multi-channel low-code development,” said Kony chairman and CEO Thomas E. Hogan.
BMO Bank of Montreal managing director of technology and innovation banking Devon Dayton underscored the critical role of “leveraging digital as a strategic function” for all businesses regardless of size. “Kony’s solution has enabled their clients to accelerate their digital transformations,” Dayton said. “We look forward to continuing this relationship and working alongside them to help them accelerate their growth.”
Kony’s financing news comes just a few weeks after the company was named a Leader by Gartner in its 2019 Magic Quadrant for Multiexperience Development Platforms (MXDP) report. This marked the expansion of the category from its previous mobile app development platform (MADP) designation to reflect what Gartner called “the evolution of MADPs to serve expanding app use cases and development requirements.”
Kony is well positioned to take advantage of this broader way of looking at development platforms. In addition to this year’s recognition from Gartner, the company was named a Leader in The Forrester Wave digital report on development platforms last year, as well as a Leader in the firm’s report on low-code development platforms for this year.
Kony demonstrated its retail banking solution at FinovateFall 2017. Founded in 2007 and headquartered in Austin, Texas, the company has been on a strong, partner-making pace in recent months. Kony teamed up with Qualifacts in May to power the behavioral healthcare solution provider’s mobile app, CareLogic. In April, Kony partnered with Micronotes, a firm that leverages AI to provide marketing automation for digital banking. That same month, the company announced a collaboration with fellow Finovate alum, IDology, to integrate new authentication services into Kony DBX digital banking solutions.
Everyone, including fintechs, gets by with a little help from their friends. That must be what digital banking solutions provider Kony and financial data expert MX were thinking when they joined forces this week.
Under the agreement, Kony will leverage MX’s PFM expertise to bolster Kony DBX, its digital banking experience product. Specifically, Kony will use MX’s data services for PFM and tap into the company’s solutions for spending categorization and classification.
Explaining the decision to partner, Kony DBX SVP and GM Jeffery Kendall described access to clean, actionable financial data as “critical” for banks and credit unions to meet customer expectations. “We are excited to collaborate with MX to deliver valued-added data services for Personal Financial Management and spending categorization and classification solutions that will give consumers a clear view of their financial health. In addition, banks and credit unions can also gain insight so they can better tailor their digital banking offerings to their customers and members,” said Kendall.
Don Parker, EVP of partnerships at MX added, “Together, and through Kony’s expansive partner network, we will help more banks, credit unions and fintech developers grow faster, reduce costs, and deliver exceptional experiences to their customers.”
The first client of the joint solution is CommonWealth One Federal Credit Union, a 33,000 member credit union with branches in Northern Virginia; Washington, D.C.; and Harrisonburg, VA. “By having access to clean, relevant and categorized data, we will be able to better serve and meet our members’ financial needs, and our members will also be able to aggregate and see all of their accounts in one place, said Larry Flory, CIO of CommonWealth One Federal Credit Union. “Having improved insight into their finances will enable our members to make better financial decisions.”
This is Kony’s second major enhancement this month to the Kony DBX platform. A little over a week ago the company partnered with Micronotes to bring Micronotes’ personalized conversation solution to Kony DBX’s bank customers.
Kony’s CTO Bill Bodin and Product Marketing Manager Antonio Sanchez showcased the company’s digital banking platform at FinovateFall 2017. Kony was founded in 2007 and is headquartered in Austin, TX.
MX was founded in 2010 and is partnered with more than 1,800 financial institutions and 43 of the top 50 digital banking providers. Headquartered in Lehi, Utah, MX is a six-time Finovate Best of Show winner, having most recently presented at FinovateFall 2017, where it demoed Discovered Accounts.