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Tracking fintech, banking & financial services innovations since 1994
If deal-making is a sign of the health of an industry, then the fintech business – global public health crisis notwithstanding – may be doing better than some suspect.
The latest signs of hi-life from the nexus of finance and technology comes from the news released after hours on Tuesday that Enova International – an online financial services company that provides financing to non-prime borrowers and small businesses – has agreed to acquireOnDeck in a deal valued at $90 million.
“This strategic transaction, which brings together two FinTech leaders, is a great opportunity for customers, employees, and shareholders of both companies,” Enova CEO David Fisher said. “Together, our companies will be stronger because of the complementary strengths and synergies of our businesses.”
Fisher highlighted both OnDeck’s online SME lending business as well as its ODX bank platform as being able to increase Enova’s “scale and resources” and drive continued growth in the company’s portfolio. Enova has nearly seven million customers worldwide and has provided more than $20 billion in loans and financing since its inception in 2004.
Of the $90 million total deal value, $8 million will be paid in cash. OnDeck shareholders will get $0.12 per share in cash and 0.092 shares of Enova stock for each share of OnDeck they own. The deal is based on the implied price of OnDeck shares of $1.38, a 90.4% premium on its closing price of $0.73 per share on Monday, July 27. Enova’s Fisher will lead the combined company, with OnDeck CEO Noah Breslow assuming the role of Vice Chairman and taking a seat on the company’s management team.
Breslow expressed pride in the progress OnDeck has made since its founding in 2006, pointing to the $13+ billion in financing the company has provided small businesses over the past decade-and-a-half or so. He said the acquisition was “the right path forward for customers, employees, and shareholders” and posited that the combined entity would be an even more effective online lender and a more powerful ally to small businesses.
The acquisition has been approved by the boards of directors from both Enova and OnDeck, and is expected to close later this year.
The number of women in technology in general, and fintech in specific, is growing. That’s the good news.
As Julie Bort and Rachel Sandler wrote in their 2018 feature on female engineers for Business Insider, “for all the arm waving about the lack of women in STEM professions, the truth is, there are some powerful role-model female engineers having fabulous careers and creating tech used by millions, if not billions of people everyday.”
A report from consulting firm Korn Ferry supports this. The study, conducted last year and looking at the top 1,000 U.S. companies by revenue, noted an increase of 2% in the number of women who held the role of CIO or CTO last year. “The industry with the highest percentage of women CIOs/CTOs,” the report noted “is financial at 25%.”
By comparison, the number of women fulfilling the role of Chief Technology Officer within the tech industry remains fewer, maybe even far fewer, than you might suspect. By industry, Korn Ferry ranked technology behind financial, healthcare, retail, and consumer, besting only the services industry.
Women like Padmasree Warrior, who served as Cisco Systems’ CTO between 2007 and 2015 and, before that, as CTO for Motorola for four years, have been among the relatively few women at the top tier of technology leadership – especially at the largest tech companies. Elissa Murphy, at GoDaddy, Selina Tobaccowala at SurveyMonkey, and Raji Arasu at StubHub are just a few of the female CTOs in charge of technology at some of our economy’s newer, most innovative companies.
Turning to fintech – and our own experience at Finovate – a woman like Pamela Rice comes to mind. The former Senior Vice President of Technology at OnDeck who represented the company at our developers conference FinDEVr, Rice is currently Chief Technology Officer for Earnest. The San Francisco, California-based company she joined in 2019 provides consumer financing options for underbanked populations including recent college graduates. Last summer, she participated in a company-hosted, Tech Meet-Up on Diversity and Inclusion, sharing her thoughts on the value of making diversity “part of the DNA of everything you do.”
We took a look at how the fintech industry was faring in terms of female representation at the CTO level. There is still a great deal of progress to be made. Here is a sample of the women who are increasingly providing technical leadership for fintechs large and small.
Marianna Tessel – Intuit – With more than 20 years experience as a VP of Engineering for companies like Ariba, Docker, and VMWare, Tessel took the helm as Intuit’s Chief Technology Officer in January 2019.
Educated at Technion – Israel Institute of Technology and the Weizmann Institute of Science – and having served as a captain in the Israeli Army – Tessel was praised by new Intuit CEO Sasan Goodarzi as a “transformational change agent” who has created “an engineering culture that has accelerated innovation.”
At Intuit, Tessel is responsible for leading the company’s product engineering, data science, information technology, and information security teams around the world. She first joined Intuit in 2017, leading product development for the firm’s Small Business and Self-Employed Group, including the company’s QuickBooks product family.
Rija Javed – MarketFinance (formerly MarketInvoice) – After more than four years as an engineer for Wealthfront, including roles as Director and Senior Director, Javed joined U.K.-based MarketFinance as the company’s Chief Technology Officer in 2018. This made her one of the first female fintech CTOs in the country.
“Having Rija on board underlines our focus on hiring the best talent and building innovative technology to deliver business finance solutions,” MarketFinance CEO and Co-founder Anil Stocker said. “It’s the foundation we’ll use to help thousands of business(es) access funding quickly and easily.”
While at the Wealthfront, Javed built the company’s first mobile app. Transitioning to the company’s investment products platform, she helped scale Wealthfront’s offerings including the development of a new brokerage and banking platform. With degrees in Electrical and Computer Engineering from the University of Toronto, Javed is also a mentor for the New York Academy of Sciences.
Ekate Kuznetsova – Token Transit – Sometimes the only way for a woman to make sure that there’s a woman’s place at the tech table is to build the table herself. That’s the approach of Kuznetsova, who parlayed her experience in software engineering at Akamai and Google into launching a fintech startup of her own. Token Transit, for which Kuznetsova is founder, CEO, and Chief Technology Officer, provides mobile ticketing and payment verification solutions for public transportation.
Launched in 2016 and available in more than 75 cities in the U.S. and Canada, Token Transit enables people to pay for fares and passes with their credit, debit, or commuter benefits card and provides them with a digital ticket that is stored on their smartphone.
Kuznetsova earned her Bachelor of Science degree from Massachusetts Institute of Technology, where she studied Mathematics and Computer Science.
While the ranks of female CTOs in fintech remains modest, it should be mentioned that there are women – from VPs of Engineering to Chief Scientists – who are not only currently leading tech teams, but also are likely among the CTOs of tomorrow. For a peek at one shortlist, check out Angie Chang’s spotlight on 21 female executives who could become one of the Fortune 100’s next CTOs.
Know a woman who’s driving technology innovation at one of your favorite fintechs? Send us a note at firstname.lastname@example.org!
Alternative lending platform OnDecklanded a new client for ODX, its digital loan origination platform. Investors Bank, with $27 billion in assets and 147 branches in New York and New Jersey, has become ODX’s newest partner.
ODX, an OnDeck subsidiary, is a platform-as-a-service that leverages software, insights, and human input to enable banks to automate small business lending. The offering, which launched a year ago, is as much about supporting banks to reach small business clients as it is about helping small businesses interact with their bank. ODX bank clients can offer small businesses a fully digital loan application and underwriting process that provides funding within 24 hours.
“As a leading small business [loan originations] platform, ODX provides proven technology and professional services that enables bank clients like Investors to offer credit to small businesses faster and more efficiently,” said Brian Geary, President of ODX. “That combination is mutually advantageous for the bank lender and the small business owner.”
Investors Bank joins PNC Bank and others as ODX clients. One of ODX’s original bank partners, JP Morgan Chase, made fintech headlines this summer when the bank announced plans to rescind the partnership.
OnDeck was founded in 2007 and has loaned more than $12 billion to small businesses in 700 different industries across the United States, Canada, and Australia since launch. The company demoed at FinovateSpring 2012 and is listed on the New York Stock Exchange with a market capitalization of $280 million.
Alternative small business lending platform OnDeckfinalized its purchase of Canada-based small business lender Evolocity Financial Group. Financial terms of the deal were not disclosed.
“The closing of this transaction signals a new era of online lending innovation on behalf of Canada’s small businesses,” said Noah Breslow, CEO of OnDeck. “As one of Canada’s leading online lenders to the crucial small business sector, we are well-positioned to provide financing options that will benefit Canadian small business owners from coast to coast.”
Evolocity brings expertise in Canadian underwriting practices, as well as local business relationships and knowledge to the table. Combined with OnDeck’s marketing and international online lending experience, the two businesses will offer small businesses across Canada access to working capital finance solutions.
The combined companies will operate under the name and branding of OnDeck Canada, with Evolocity CEO Neil Wechsler serving as CEO of OnDeck Canada. Evolocity co-founders David Souaid and Harley Greenspoon will serve as chief revenue officer and chief operating officer, respectively.
OnDeck was founded in 2007 and has loaned more than $10 billion to small businesses in 700 different industries across the United States, Canada, and Australia since launch. The company leverages its OnDeck Score to underwrite loans and deliver funds to small businesses in as little as 24 hours.
OnDeck most recently demoed at FinovateSpring 2012. The publicly traded company is listed on the New York Stock Exchange under the ticker ONDK and has a market capitalization of $418 million.