$680 Million Raised by 29 Alums in Q1 2015

cartoonmoneystackThe biggest surprise in our look at first-quarter funding is that the $677 million amassed by 29 Finovate alums was more than 20% of the $3.2 billion invested in the entire worldwide fintech sector.

The $677 million raised was $85 million (+14%) above the same quarter a year ago, and more than triple the first quarter of 2013.

Q1 2015 was also $133 million above the $544 million mark set in the fourth quarter of 2014.

It will be worth watching to see if this record-setting first quarter for Finovate alum fundraising will be a sign of more great things to come for capital-raising in 2015.

Top 10 Overall Investments

  1. Xero: $111 million in February
  2. Coinbase: $75 million in January
  3. Betterment: $60 million in February
  4. TransferWise: $58 million in January
  5. App Annie: $55 million in January
  6. Ayasdi: $55 million in March
  7. Motif Investing: $40 million in January
  8. Ripple Labs: $30 million in January
  9. Bill.com: $50 million in February
  10. Pindrop Security: $35 in February

Previous Quarterly Comparisons

  • Q1 2015: More than $676 million raised by 29 alums
  • Q4 2014: More than $544 million raised by 25 alums
  • Q1 2014: More than $600 million raised by 8 alums
  • Q1 2013: More than $155 million raised by 14 alums

January: More than $275 million raised by 14 alums

February: More than $264 million raised by 8 alums

March: More than $136 million raised by 7 alums

If you are an alum that raised money in the first quarter of 2015, 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.

Day One at Bank Innovation 2015: A Focus on the Future of Fintech

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“That’s a word you use with your enemies.”

Ripple Labs CEO and founder, Chris Larsen, on the term “disruptor”

After two days at Bank Innovation 2015, I’m starting to believe that the fintech industry might be settling into, if not maturity, then at least a pretty responsible young adulthood. And it all has to do with the concept of disruption.

A few years ago, for example, a panel discussion among startups on the future of banking might have sounded very different from what I heard at Bank Innovation’s event in Seattle this week. My takeaways?

  • Startups are as interested, or even more interested, in working with financial institutions as they are in trying to replace them.
  • Startups recognize their limitations as emerging businesses in an industry with many incumbents.
  • Startups are aware that their innovations are the first step in a loop of experimentation and collaboration that involves technologists, financial professionals and consumers.

Doug Lebda, founder and CEO of Lending Tree, seemed to speak for many presenters when he insisted “we’re all in this together” during his fireside chat Monday morning. For all the talk of disruption and creating beautiful customer experiences in the tech world in general, today’s fintech startups begin their focus on the future with challenges as practical as reducing friction.

As Lebda put it when asked about the next innovation in the space by a member of the audience: “Ease of transaction. Period. Full stop.”
Fintech disruption: What’s your function?
That’s not to say that Bank Innovation 2015 was lacking in the old-fashioned, concept-from-another-planet, disruption department. Ripple Labs CEO and founder Chris Larsen’s offhand remark about micropayments between self-driving cars sent a palpable buzz through the room—and through Twitter at #BankInnovation15. But it was his lucidity on the role cryptocurrencies are likely to play in the real world that was worth the price of admission.

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Larsen’s vision is of an “internet of value” similar to the “internet of information” or “internet of data” that we have today. Cryptocurrencies will be key to this ability to exchange value, Larsen believes. But in the same way that the internet of information was built by institutions—from government to academia—the internet of value will be built not by consumers, but by what he called “custodians of value.”
“You don’t have to change the bank’s role or Visa’s role,” Larsen said. He sees Ripple as a “giant pathfinding algorithm for value exchange” that can improve on the current system of correspondent banking by providing financial institutions with real-time settlement, and “atomic,” “go/no go” transactions that are end-to-end traceable.

Startups help banks get better

Technology will always seek to deliver innovation faster than finance can integrate it, as nCino CEO Pierre Naude suggested in the conversation on the future of banking. Bitreserve CEO Halsey Minor added that there was a time when he “didn’t think banks would have to deal with innovation.”

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But to the extent that technology helps banks and other FIs become better at “core competencies” and reduce friction the more likely the relationships and collaborations are to be valuable for all involved.
In this way, financial institutions can serve as what iQuantifi CEO Tom White called “advice drivers” just as well as startups can prod FIs toward greater efficiency and serve as testing grounds for new approaches to everything from credit decisioning to customer engagement.
So if banks are getting back to basics of lending, payments and savings, as CBW Bank chairman and CTO Suresh Ramamurthi suggested, there are fintech startups helping make that happen. Alternative lenders are white-labeling products for FIs to sell to their customers, as Lending Club’s Andrew Deringer, VP, head of Financial Institutions Group, pointed out, opening up new cross-selling opportunities. Funding Circle co-founder and U.S. managing director, Sam Hodges, highlighted the “massive need for small business financing” and the role played by startups able to look at risk differently.

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This argument was echoed by Emmanuel Marot, CEO of LendingRobot who talked about the development of niche marketplace lending alongside new niche markets. All of it is helping move small businesses up the chain toward the kind of loans banks are interested in and able to profitably make.
It also is about providing better service, something that in the lending business goes all the way to the individual loan officer, as Lebda explained during his Fireside Chat session. “My best loan was when people came up and really talked to me,” he said in response to a question about emotional banking, a theme that would be heard more than once at Bank Innovation.
“This is the future,” added LendKey CEO and founder Vince Passione. “No more waiting. Not just shopping but getting it completed. Not just the coupon for the car. But the coupon for the financing.”
Finovate Alum Wins DEMOvation Challenge

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Congratulations to Tom White and the team from iQuantifi. iQuantifi took home Best in Show honors as part of Bank Innovation 2015’s DEMOvation event Tuesday morning. Also participating was authentication specialist and fellow alum, AuthenticID.
DEMOvation featured six companies,
with each providing a brief, eight-minute demonstration of its technology. Attendees voted for their favorites via Bank Innovation 2015’s mobile app. Read more about the DEMOvation challenge here.

More observations from Bank Innovation 2015 coming Friday.

Alumni News– February 25, 2015

  • Finovate-F-Logo.jpgFinovate Debuts: How Trunomi Shares Customers’ Personal Info while Maintaining Their Privacy.
  • LendingRobot adds Automated Secondary Market Trading.
  • Digital River wins the 2015 Merchant Payment Ecosystem Award.
  • PYMNTS looks at Credit Karma’s funding history and future plans.
  • Lincoln Savings Bank to Deploy CorePro from Social Money.
  • Verde International and Lending Club featured in PYMNTS column on banks and non-traditional loan decision-making.
  • Xero Raises $110 Million from Accel Partners, Matrix Capital.
  • CAN Capital and Worldpay partner to improve access to capital for SMEs.
  • Crain’s Chicago Business looks at Rippleshot and its plans for winning bigger clients.
  • ValidSoft launches its Device Trust solution with a second major UK bank.
  • Yelp Senior Vice President of Revenue Jed Nachman joins PaySimple Board of Directors.
  • Bluefin Payments partners with Infinite Peripherals, an mPOS device provider.
  • ProfitStars launches its Commercial Lending Center, a small business lending portal.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

LendingRobot Pulls in $3 Million to Boost Your Lending Club and Prosper Portfolios

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Yesterday, LendingRobot received $3 million in funding for its platform that helps individuals invest like pros on P2P lending sites, Prosper and Lending Club. Europe-based Runa Capital led the Series A round.

The new funding, plus the undisclosed amount received in a Seed round last April, brings LendingRobot’s total raised to somewhere north of $3 million.

The Washington state-based company plans to use the funds to add new features, enhance its prediction models, and accelerate growth.

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LendingRobot uses an algorithm to invest users’ available balance in their Prosper and Lending Club accounts to get them the best return.

How is this different from Prosper’s QuickInvest or Lending Club’s Automated Investing?

Think of it as Bid Sniper software for eBay-meets P2P Lending. Popular loans are funded seconds after they are posted on Prosper or Lending Club, usually by institutional investors or hedge funds with automated loan investing technology. By the time the average individual makes their investments, often times the best loans have already been snatched up.

Additionally, it offers its 1,000+ users more than 40 filtering criteria to insure their cash is being invested how they want.

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LendingRobot has no up-front fees, and manages users’ first $10,000 for free, after which it takes 0.45% per year.

LendingRobot was recently named a finalist in SWIFT Innotribe’s Startup Challenge.

We featured LendingRobot in our Behind the Scenes feature in May of 2014. Check out LendingRobot’s live debut at FinovateSpring 2014.

Alumni News– September 29, 2014

  • Finovate-F-Logo.jpgCreditCards.com and Wallaby launch the WalletUp mobile app to help consumers maximize credit card rewards.
  • LendingRobot will now manage up to $10,000 for free.
  • Billhighway debuts at #1 on Detroit Free Press Top Workplaces List in Small Business category.
  • miiCard participates in NSTIC Pilot for State of North Carolina eID Program.
  • Birdback brings card-linked offers to US and Brazil.
  • Smart Tuition and peerTransfer partner to help International tuition payers.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alums Among SWIFT Innotribe’s Startup Challenge Finalists

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With more than 280 companies applying, and 47 companies selected to compete, the Innotribe Startup Challenge is down to the top 15 companies that will move on to the Grand Finale. And six of the companies to advance are Finovate alums.

Sibos

The Innotribe Startup Challenge is part of Sibos, the conference held by SWIFT each year. The goal of the Challenge is to help what the contest categorizes as “startups” and “innovators” get access and exposure to the broader fintech community. Events are held in London, Singapore, and New York during which competing companies pitch their innovations to industry experts and fintech investors. 

The Grand Finale will be held on October 1 at Sibos. The winning companies – one “early stage startup” and one “growth-stage innovator” – will receive a prize of $50,000 USD.
The six Finovate alums among the finalists are below.
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“Innovator”
Founded: 2009
HQ: Hong Kong, China

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“Startup”
Founded: 2013
HQ: London, UK

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“Innovator”
Founded: 2012
HQ: Singapore
“Startup”
Founded: 2012
HQ: Seattle, WA

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“Innovator”
Founded: 2011
HQ: Berlin, Germany

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“Innovator”
Founded: 2011
HQ: Pasadena, CA
Said Fabian Vendenreydt, Head of Markets Management, Innotribe and the SWIFT Institute at SWIFT said “Since it started in 2011, the Innotribe Startup Challenge has provided a huge opportunity to our community to understand and support this innovation.” 
For more information about the Innotribe’s Startup Challenge, visit their page here.

Alumni News– July 18, 2014

  • Finovate-F-Logo.jpgInnotribe finalists include early stage companies CurrencyTransfer and LendingRobot.
  • Innotribe finalists include growth stage companies Advanced Merchant Payments, Fastacash, Mambu, and Wallaby.
  • Pymnts talks with PaySimple CEO and founder Eric Remer to discuss how PaySimple looks at B2B payments.
  • Check announces major expansion of photo bill pay beta.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Alumni News– June 10, 2014

  • Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Finovate-F-Logo.jpgFinovate Alums LendingRobot and Wallaby Among 2014 Innotribe New York Winners.
  • TransferWise Announces $25 Million Investment; Support from Sir Richard Branson.
  • Top Image Systems and Cintas Document Management form technology partnership to provide advanced BPO solutions.
  • PayPal President David Marcus leaves for Facebook job.
  • Arxan Technologies will now be sold by IBM as part of its portfolio of security products.
  • Insuritas signs Florida-based Tyndall FCU ($1.1 billion in assets) to provide insurance options to its almost 100,000 members.
  • P2Binvestor reaches $2 million in deals over the past 2 months after providing funding to Colorado-based beverage company.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alums LendingRobot, Wallaby Among 2014 Innotribe New York Winners

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Today, New York. Tomorrow, Boston and the world.

LendingRobot and Wallaby Financial were among the five companies to win the 2014 Innotribe Startup Challenge in New York last week. The two companies will join fellow winners, Epiphyte, Juntos Finanzas, and Standard Treasury – as well as winners from competitions held in Singapore and London – for the final competition in Boston this September where an overall winner for 2014 will be crowned.

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LendingRobot demoed its technology at FinovateSpring 2014 in San Jose. The company’s solution not only helps investors manage their P2P loan portfolios, but also uses automation to help them compete against experienced and institutional investors who themselves use technology to spot the best loans available from companies like Lending Club.

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Wallaby Financial helps consumers choose which credit card in their wallet is the optimal one to use with any given transaction. Demoing its Wallet Boost technology as part of the FinovateSpring show in 2013, Wallaby was recently in the news announcing a new service called WalletUp. Available from its new partner, CreditCards.com, WalletUp makes it even easier for consumers to have and use the best mix of credit cards for them.
Also participating in the Innotribe competition in New York were a handful of other Finovate alums including CUneXus, Socure, and Digital Retail Apps. See FinovateSpring 2014 demos of CUneXus here, and Digital Retail Apps here. Socure’s demo from FinovateFall 2013 is available here.

Finovate Alumni News– May 30, 2014

  • Finovate-F-Logo.jpgThreatMetrix wins Judges Choice for Best Overall Fraud/Security Solution at 2014 CNP Awards.
  • HelloWallet acquired by Morningstar in $52.5 million deal.
  • PandoDaily takes a look at Venovate and its platform for enabling alternative investments.
  • Gonzobanker lists five ingredients in his Franken-banking product: all Finovate alums in Q2ebanking, Digital Insight, ACI Wordwide, and Alkami Technology, and Jwaala.
  • Fast Company profiles NICE Systems in a new feature on voice biometrics.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.