M1 Finance Raises $33 Million in Series B Funding

In a round led by New York-based growth equity firm Left Lane Capital, money management platform M1 Finance has raised $33 million in new capital. The Series B, which also featured the participation of Jump Capital, Clocktower Technology Ventures, as well as existing M1 investors, takes the company’s total funding to $53.2 million, according to Crunchbase.

The investment comes at the halfway mark of a year in which the company reached $1 billion in customer assets managed and added more than $650 million in customer deposits to its platform. The company noted that it achieved the $1 billion AUM milestone faster and with less funding than many of its competitors.

“We’ve built the premier personal finance platform that combines the best of digital investing, borrowing, and banking, and have done so on relatively little funding,” company CEO and founder Brian Barnes said. “That is a testament to the team and culture we have here. We’re just getting started and look forward to accelerating our growth with this new funding and strong new partners.”

The M1 personal finance platform consists of three main, integrated solutions to help users build wealth over the long-term, respond to intermediate-term financial challenges and needs, and manage near-term spending and saving. M1 Invest is the platform’s free investment solution that enables investors to build customized portfolios of stocks and exchange-traded funds (ETFs). The module features both fractional share functionality and advanced automation. M1 Borrow is the platform’s line-of-credit product, which offers rates between 2.0% and 3.5%. M1 Spend gives platform users an FDIC-insured digital checking account and debit card. This offering features a 1.00% APY and 1% cash-back on qualified purchases (with a subscription to the company’s M1 Plus upgrade).

“With M1, you can build an entire wealth strategy in only a few clicks, down to individual stocks and ETFs,” Barnes said. “We take it from there, handling all the day-to-day optimization, rebalancing, and re-investing according to your instructions so you can spend more time building strategies and less time executing them.”

Founded in 2015 and headquartered in Chicago, Illinois, M1 Finance demonstrated its platform at FinovateFall 2016.

Motif Investing to Close its Doors

After ten years in the investment space, online brokerage platform Motif will be shutting down operations on May 20.

The company notified users via email on April 17 in a message saying, “At this time, we’ve made the decision to cease operations and transfer your account to Folio Investments.”

Motif was founded in 2010 by Tariq Hilaly and former Microsoft executive Hardeep Walia, who debuted the company’s build-your-own motif concept at FinovateSpring 2013. Since its launch, the company amassed $127 million in funding from investors including Y Combinator, TechStars, and 500 Startups. In March, Motif reported $604 million in assets under management between individual accounts and institutional clients. The company also reported around $264 million in assets held in the ETFs it launched in conjunction with Goldman Sachs.

Last month, Motif deepened its ties with Goldman Sachs, ringing the opening bell of the New York Stock Exchange in celebration of launching five new ETFs in partnership with the bank.

As mentioned in Motif’s statement to its users, the company is transferring users’ accounts to Folio Investing. “We appreciate the opportunity we’ve had to work with you, and we are confident that your investment needs will be well-served by Folio,” the email said. Folio was founded in 2010 and offers 2,000 commission-free, window trades per month, most of the ETFs listed on the U.S. national securities exchange, 1,100 no-load mutual funds, and almost 125 pre-made portfolios.

While some Motif users have publicly complained about the company’s choice in the new provider, some fintech firms, including M1 Finance, have taken the opportunity to bring Motif’s users over to their platforms.

As ThinkAdvisor noted in a piece published last week, Motif’s news is a signal of what’s to come for smaller players in fintech. In fact, many analysts have noted that the recent pandemic and economic crisis will drive consolidation in the industry.

Helping Secure Digital Identities; Managing Financial Crime Risk

Two of the biggest themes in fintech – digital identity and the rise of fintech in Central and Eastern Europe – meet in the latest announcement from biometric authentication specialist and Finovate Best of Show winner iProov. The company’s facial recognition technology now makes it easier for users of SK ID Solutions’ Smart-ID Service in countries like Estonia, Latvia, and Lithuania to renew their accounts without having to visit a physical bank branch.

“This is a major development for all digital identity providers,” iProov CEO Andrew Bud said. “Estonia has proved, for the first time, that a remote, automated, biometric ID verification service can deliver the highest possible levels of security.”

Recognized as equal to a handwritten signature throughout Europe, Smart-IDs enable users to authenticate themselves and provide permissions online using a smartphone app. iProov’s facial recognition technology adds a three-second scan to compare the image of the user to the image on their presented ID document to help defend against fraud and identity theft.

Smart-ID also leverages NFC-based ReadID document verification technology from InnoValor.

Financial crime risk management innovator Featurespace will be helping Enfuce combat fraud and money laundering courtesy of a newly announced partnership. Enfuce, a financial services firm based in Finland, will use Featurespace’s ARIC Risk Hub to enhance its ability to protect its customers from fraud and financial crime.

“Our clients deserve industry-leading services that allow them to freely and fully concentrate on the success of their core business, without worrying about ever-evolving fraud,” Enfuce co-founder and chair Monika Liikamaa said.

ARIC Risk Hub offers real-time transaction monitoring for fraud and financial crime, enabling institutions to identify and act against anomalous and potentially dangerous behavior as it occurs. The technology also reduces the number of false positives by as much as 70%, keeping anti-fraud processes efficient. Featurespace introduced its fraud-fighting technology to Finovate audiences at FinovateEurope 2016.


Here is a round up of recent news from our Finovate alumni.

  • Sezzle unveils new logo along with its first annual report.
  • Flybits expands its executive team in New York, Toronto, the U.K., and Dubai.
  • ID R&D updates voice biometric solution IDVoice.
  • M1 Finance surpasses $1 billion in assets on its platform.
  • Armor Bank selects Teslar Software’s automated workflow and portfolio management tools.
  • Mastercard partners with myPOS to boost adoption of card payment solutions among European SMEs.
  • Black Hills FCU selects nCino’s Bank Operating System.
  • Bazaarvoice launches partnership program with Yotpo as the piloting partner.
  • Keysafe inks partnership with Salt Edge to access tenants’ bank data without the need to acquire its own PSD2 license.
  • Lending Club appoints Annie Armstrong as Chief Risk Officer.
  • Assaray Trade and Investment Bank selects Temenos Infinity and Transact to power its digital transformation.
  • Long John Silver’s chooses Blackhawk Network for gift card program.
  • Trustly and Fly Norwegian team up to let travelers pay directly from their bank accounts.
  • Pindrop launches Deep Voice 3, the new version of its voice recognition technology.
  • Mastercard CEO Ajay Banga steps down, replaced by Chief Product Officer Michael Miebach.
  • Venmo to launch debit card for teens.
  • Almost 600 banks select Fiserv’s Turnkey Service for Zelle.
  • Finastra to offer ClickSWITCH’s account switching technolkogy to its clients.
  • Simmons Bank partners with Jack Henry to leverage its Banno platform to build a digital presence.
  • Currencycloud and Currensea team up.
  • Yseop and Automation Anywhere join forces to scale intelligent automation.
  • Lighter Capital appoints Kevin Fink at CTO and Patricia Elliott as CSO.
  • InComm launches Roblox gift cards in France and Germany.

Finovate Alum Features and Profiles

Revolut’s $500 Million Round Boosts Valuation to $5.5 Billion – Global financial platform Revolut has secured its place as the U.K.’s most valuable fintech.

Dealing with Deepfakes in Fintech – The fintech industry is ripe with security firms, such as iProov, that use AI to combat both video and audio deepfakes with anti-spoofing technologies.

Envestnet | Yodlee Acquires Indian Data Aggregator FinBit.io – Envestnet | Yodlee has acquired another asset in its strategy to further grow and develop its data aggregation and analytics business.

Meet Sonect: Cash Network Builder, Finovate Newcomer, Best of Show Winner – What’s better than having a large pizza with all your favorite toppings delivered to your front door? How about a side order of cash, saving you a trip to the ATM or bank branch?

Azimo Taps Ripple for Cross-Border Payments to the Philippines – Fueling these payment transfers is Ripple’s On-Demand Liquidity (ODL) solution that uses XRP to source liquidity and complete money transfers within three seconds.

Lendio Lands $55 Million to Match Small Businesses with Lenders – The investment more than doubles the company’s previous funding, bringing its total to $108.5 million.

SheerID Expands Identity Marketing Platform – The move enables brands to identify and acquire new customers across the globe.

M1 Finance to Launch New Current Account Offering

Chicago-based M1 Finance is another firm taking on the big banks with plans to launch a checking (or current) account and debit card that integrates in its current app, reports Antony Peyton of Fintech Futures (Finovate’s sister publication).

Coming in a few months, and called M1 Spend, it will allow users to directly deposit their salary into M1, pay bills, and spend money with an M1 Visa debit card. It’s also launching a premium version with interest and cash back on purchases. In its view, this is “one account that does it all”.

In a swipe at rivals, Brian Barnes, M1’s founder and CEO, said: “Unlike current checking accounts, your money is not confined to sit idle as ‘cash’, earning next to nothing.”

Instead, excess money is automatically put into investments to “capture its full potential.”

Users can choose their own stocks or funds or select from curated options. They can also use money as an asset to back up a line of credit to offer liquidity of those investments.

Barnes explained: “We’ve built and launched two of the three pillars in M1 to make this a reality.”

Namely, M1 Invest for a custom portfolio and M1 Borrow for a line of credit. M1 Spend, when launched, will complete the foundation of its money management account.

All three will be integrated within the app, and money can move instantaneously between all three.

M1 Spend will be Federal Deposit Insurance Corporation (FDIC) insured as the money in the account will be held with Lincoln Savings Bank.

Founded in 2015 and headquartered in Chicago, Illinois, M1 Finance demonstrated its platform at FinovateFall 2016. The company has raised $20.2 million in funding and includes Chicago Ventures among its investors.

Finovate Alumni News

On Finovate.com

  • Behalf Teams Up with FinWise Bank to Boost Small Business Lending Options
  • Samsung to Power Biometric Authentication Pilot for Bank of America
  • ACH Alert’s Fraud Prevention HQ Empowers Account Holders to Stop Suspicious Transactions

Around the web

  • PayPal unveils two new innovation labs in India.
  • Albany, New York-based SEFCU chooses Fiserv as technology partner.
  • FICO selects Amazon Web Services as its cloud provider.
  • SF Chronicle profiles mortgagetech innovator, Unison, in feature on downpayment assistance for Bay Area homebuyers. Join them next month in New York for FinovateFall.
  • GoBankingRates highlights AutoGravity, M1 Finance, Venmo, Mint in list of best personal finance apps
  • ID.me hires Julie Filion as Chief Marketing Officer.
  • eMoney Advisor moving into Rhode Island offices, expects to hire 100 by 2020.
  • Flywire Offers Summertime Deal for International Tuition Payments with Mastercard.
  • StreetShares adds Heather Tuason as new Chief Product Officer.

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 Alumni News

On Finovate.com

  • Eight Finovate Alums Join Plug and Play Accelerator’s 2017 Class
  • True Potential Exceeds $7.8 Billion Assets Under Management.

Around the web

  • Zighra Appoints Hari Koduvely As Chief Data Scientist
  • Small businesses name Xero the most-loved accounting software for the third year in a row.
  • Pindrop research scientist Dr. Elie Khoury quoted in Speech Text on the rise of voice biometrics.
  • M1 Finance founder and CEO Brian Barnes talks with U.S. News about getting started as a beginning investor.
  • Chain partners with SIX Swiss Exchange and Nasdaq to build blockchain solutions for OTC structured products.
  • ThreatMetrix adds data discovery and visualization features to its fraud prevention solution, Dynamic Decision Platform.

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 Alumni News

On Finovate.com

  • defiSOLUTIONS Hires Keven Sticher as Chief Information Officer.
  • NCR at Center of Swiss ATM Harmonization Initiative

Around the web

  • CREALOGIX wins The Goodacre Systems in the City Award for 2017.
  • Business Insider profiles Brian Barnes, founder of M1 Finance.
  • Fujitsu begins selling SaaS lending and leasing technology developed by Cloud Lending Solutions.
  • TSYS extends commercial payments agreement with Germany’s Degussa Bank.
  • The Entrust Group announces new integration with eMoney Advisor.
  • Global Debt Registry finishes trial of secure, permissioned blockchain proof of concept.

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 Alumni News

Around the web

  • Estonia’s e-Residency program partners with Holvi to launch borderless digital banking for its borderless digital nation.
  • Prosper Closes $495 Million Securitization Transaction.
  • EFL is a finalist in the WSJ’s Financial Inclusion Challenge.

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 Alumni News

On Finovate.com

  • Check out today’s FinDEVr Feature — FairCom.
  • A Plus for P2P Lending: Investors to Buy Up to $5 Billion in Loans on Prosper.

Around the web

  • Zopa awarded Superbrand status for the first time.
  • Benzinga features M1 Finance CEO Brian Barnes.
  • Kasasa names Guy Daubenspeck Chief Information Security Officer.
  • The Co-operative Group to leverage ACI Worldwide for cloud-based mobile wallet.

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 Alumni News

On Finovate.com

  • CurrencyCloud Taps Former Misys Executive Ed Addario as New CTO.
  • Quicken to Leverage PayNearMe’s Prism API.

Around the web

  • Gillian Davies joins Boku as new CFO.
  • Paducah Bank to launch Insuritas insurance agency platform to drive fee income.
  • The Banker interviews Avoka European GM, Richard Austen.
  • Investopedia profiles Chicago-based robo advisor, M1 Finance.
  • Forrester features WorkFusion in list of important AI technologies in 2017.
  • HelloWallet unveils version 5.0 with improved app navigation and streamlined dashboard.

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 Alumni News

On Finovate.com

Around the Web

  • Technology from Modo Payments supports new loyalty point POS payment partnership between FIS and Verifone.
  • CurrencyFair unveils new SMS/push notifications feature for deposits and auto transactions.
  • RightCapital enhances platform to make compliance with DOL fiduciary rule easier.
  • FIS earns top honors in Bank Director’s Core Provider and Asia Risk Technology rankings.
  • Marc Thompson joins PaySimple as Chief Financial Officer.
  • Token partners with VirtusaPolaris, information technology consulting and outsourcing company.
  • M1 Finance rolls out retirement account functionality.
  • CUNA Strategic Services partners with Kasasa to provide credit unions with products and services to stay competitive.

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.

Top Direct-to-Consumer Wealthtech Plays

wealthtech4

Our wealthtech industry coverage continues this week. We looked at the industry last week and reviewed the top trends earlier this month. Today we’re taking a look at industry players with B2C offerings—in other words, companies that market directly to consumers and not through businesses.

Since wealthtech is broader than just roboadvisers, we’ve divided B2C wealthtech players into seven categories and laid out our top picks for each group. Since category sizes vary, the number of our selections also vary.

Top in-house builds from traditional players
These are offerings from traditional wealth management firms that have been built in-house (or purchased and then white-labeled) and marketed under the firm’s brand.

Fully automated roboadvisers
These are online platforms that provide automated, algorithm-based portfolio management without intervention from human advisers and without personalized, one-on-one conversations with a human adviser.

screen-shot-2016-12-22-at-4-06-40-pmAcorns takes a unique approach by linking a user’s debit card and investing their “spare change”

Hybrid roboadvisers
These are traditional advisory services, including personalized conversations and actively managed portfolios blended with computerized portfolio recommendations. Business Insider reports hybrid roboadvisers will manage 10% of all investable assets by 2025.

screen-shot-2016-12-22-at-4-11-08-pmSigFig has partnered with multiple banks, including Wells Fargo, Pershing, and Citizens Bank

Non-U.S. roboadvisers

Alternative investing platforms
These are platforms that link participants to unconventional investment types, such as private equity, hedge funds, futures, real estate, etc.

screen-shot-2016-12-22-at-4-18-08-pmWith Motif, uses invest in grouped stocks and ETFs that revolve around a common theme

Non-U.S. alternative investing platforms

News and information companies
These are online platforms that help users discover news and market trends before they go mainstream. Some include social networking aspects.

screen-shot-2016-12-22-at-4-23-47-pmTickerTags helps users discover trends even before they become news