2015: A Year in Finovate Alumni Mergers and Acquisitions

Handshake_graphic

2015 was another big year for mergers and acquisitions in the fintech industry. And whether they were the acquirer or the acquired, Finovate alums were very much a part of the M&A action.

Because terms of many deals were undisclosed, it is difficult to get a precise number on how much money was spent acquiring some of fintech’s most promising startups this year. But looking just at those acquisitions for which figures were available, we can see that 2015 was a banner year in M&A (more than $7 billion) — and that’s just counting alums.

So from the $5 billion deal between FIS and Sungard to the “alum-acquires-alum” mergers of September 2015, let’s take a closer look at some of the major unions of the year that featured Finovate alums.


December


October


September


August


July


May


April


March


February


January


If you’re a Finovate alum whose merger we’ve missed or acquisition we’ve overlooked, let us know. Send us an email at research@finovate.com.

Q2 Acquires Social Money in $10 Million Deal

Q2_homepage_SocialMoney_Dec2015

Q2 Holdings just got social.

The virtual banking solution provider today announced it will acquire fellow Finvoate alum Social Money for $10.6 million. Q2’s President and CEO Matt Flake said the “strategic” acquisition will help its customers “expand their reach, grow market share, and engage account holders.”

Formerly known as Smarty Pig, Social Money helps financial services companies better engage their customers by offering them savings solutions such as GoalSaver, a customized, goal-directed and bank-audited saving system. Founded in 2007 and headquartered in West Des Moines, Iowa, Social Money is geared toward millennials and gen-Y consumers, a point underscored by Flake. “The digital banking experience matters when it comes to reaching millennials and retaining existing account holders,” he said, adding that Q2 is committed to serving the “increasingly digital modern consumer.”

SocialMoney_stage_FS2012b
Social Money CEO Scott McCormack demonstrated GoalSaver at FinovateSpring 2012.

The Social Money acquisition is the second for Q2 in 2015. In July, Q2 Holdings acquired anti-fraud, risk-management specialist Centrix Solutions for $20 million. Q2 is still studying how it will integrate Social Money’s portfolio into its offerings, saying it plans to provide a “rebranded suite of Social Money technologies” in 2016. For its part, Social Money sees the acquisition as an opportunity to continue helping community banks and credit unions “establish direct-to-digital capabilities in the future,” according to CTO Adam Anderson.

Q2’s solutions are used in more than 275 community banks and credit unions. At their Finovate debut, FinovateSpring 2011, Q2 demoed its risk and fraud analytics technology. Headquartered in Austin, Texas, Q2 Holdings was founded in 2005.

Finovate Alumni News

On Finovate.com

  • “Fintech Developers, Lock in Presale Savings for the Very First FinDEVr in NYC”
  • “Q2 Acquires Social Money in $10 Million Deal”
  • Check out the latest developer news in this week’s edition of “FinDEVr APIntelligence”

Around the web

  • Employee Benefit News features Financial Guard in a discussion on the rise of robo-advisers.
  • Misys unveils its next-generation capital markets trading platform in the cloud, Misys FusionCapital.
  • CO-OP Financial Services to help credit unions deploy MasterPass from MasterCard.
  • ING expands its host card emulation (HCE) mobile payment service to all of its customers in the Netherlands. Join ING in London for FinovateEurope 2016.
  • Intuit partners with Fundbox to provide invoice financing for SMEs.
  • Technical.ly Delaware profiles Global Debt Registry.
  • Nostrum Group urges personalization in digital lending in new report on digital finance. See Nostrum at FinovateEurope 2016 in February.

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

  • “FinDEVr 2015: A Bounty for Builders”
  • Check out our latest FinDEVr Preview featuring Crysp.

Around the web

  • mBank launches “Digital Banking and Finance” degree program with University of Lodz.
  • Markit completes its acquisition of CoreOne. Join Markit in San Francisco for FinDEVr 2015 this week.
  • Brett King interviews Scott McCormack of Social Money on the topic of financial inclusion.
  • WorldPay investigates using facial recognition technology to combat card fraud. See WorldPay at FinDEVr 2015 in San Francisco.

This post will be updated throughout the day as news and developments emerge. You can also follow alumni news headlines on the Finovate Twitter account.

Mobile Monday: Turning Spending Management Into a Positive Experience

moven_wheelMany people closely track their spending because they have to. They live paycheck to paycheck and there is no choice. A few track it because they are masters of control, and they love the sense of order that results from processing each transaction. But almost no one tracks spending for fun or fulfillment.

If a bank, card issuer, or fintech startup cracks that barrier into entertainment, they would surely be en route to fame and fortune (or at least a demo slot at Finovate). If I knew how to make expense tracking fun, I wouldn’t be writing about it here. I’d turn it into a startup, or at least a consulting practice.* So for what it’s worth, here’s my five-point plan for making banking fun.**

1. Go all-in on mobile
This is probably obvious to most readers. But I still encounter people who still believe that money management is best done on a desktop. True, it’s easier to design for the big screen, and real keyboards are nice, but it’s just NOT how people interact with digital providers today. For example, 76% of Facebook’s and 88% of Twitter’s ad revenue last quarter was on mobile (source). What more do you need to know?

2. Remove the login
You cannot engage mobile users multiple times per day with a standard username/password system. Thankfully, logging in via fingerprint is becoming a handset standard. Bank of America said last week it was about to adopt TouchID on iOS, so the log-in problem should eventually be going away. And for non-biometric handsets and/or users, a 4-digit PIN entry is a pretty good workaround.

3. Stream the transactions
Users should not have to do any work to see each new transaction in reverse chronological order. It should be just like an email system showing new transactions at the top. Unread ones should be super-easy to identify by staying boldface until viewed. For extra credit, adopt the gmail standard, identifying Priority transactions at the top of the stream.

4. Gamify the spend
Once you’ve laid the groundwork with #1, #2 and #3, it’s time to do the tough part of making tracking fun, or at least interesting enough to hook users. I look to Fitbit and Starbucks for inspiration. I probably look at my Fitbit app 7 to 10 times per day to see how I’m doing against my weekly goals; in comparison, I probably open a mobile banking app about 1 or 2 times per month. Why does Fitbit get 20x the engagement? Because it’s a POSITIVE experience. Every time I open it up I’m literally steps closer to my goal. That’s positive reinforcement. In comparison, every time I look at my banking app, I’m one more step removed from my goal of spending less. That’s a negative.

Banking is never going to be as fulfilling as step tracking, but it doesn’t have to be a downer at every login. FIs need to provide positive reinforcement instead of negative. Moven does as good a job as any along these lines by showing a red/yellow/green color-code rating on each expenditure to help users instantly understand what they are doing. And there are lots of ways to begin quantifying spending once users stop being afraid to log in for fear of always getting bad news.

5. Reward the save
Once users start seeing tracking as a positive experience, positive behaviors can be rewarded. Starbucks does a great job getting me to change my behavior by delivering custom offers and rewards to the mobile app. Before the mobile app, and more importantly, mobile ordering, I was a once-or-twice per-month customer. Now, it’s my seventh day in a row inside a store in order to win “14 bonus” stars (value about $7 if I use them to score a sandwich).

Until interest rates get back to something that you can actually measure, financial institutions need to overhaul their rewards programs to provide incentives for beginning savers. I realize how challenging that is based on the near-zero margins currently in the deposit and debit-card business. But there are ways to do this, such as providing retailer discounts when savings goals are reached. See SmartyPig/Social Money (post) or Finovate demo.

—–
*Just kidding, Finovate employees do not invest in or advise fintech startups (outside the Finovate event-coaching process).
**By “fun,” we are not saying money management will compete with television or Facebook. The aim is to make banking useful on a daily basis, perhaps the equivalent of checking the weather forecast.

Finovate Alumni News

On Finovate.com

  • “Behalf Closes $119 Million Series D”
  • “Neon Release Adds Touch ID and Enhanced Notifications to Oink 2.0″
  • “ShopKeep Rings Up $60 Million Investment”

Around the web

  • Citibank India and MasterCard launch digital wallet, Citi MasterPass, in India.
  • This is Money features TransferWise in a look at the lack of transparency in exchange fees.
  • LoanNow earns #4 spot in Orange County Business Journal’s “Best Places to Work in Orange County 2015” roster.
  • PYMNTS looks at how PayPal’s Paydiant is powering Subway’s mobile-payments app.
  • Payments Views talks with Doug Yeager, HCE inventor and CEO of SimplyTapp, in its latest podcast.
  • Expensify launches New Investment Fund, Expensify Ventures, for fintech startups.
  • American Banker considers how banks are using startups such as Social Money and Qapital to bolster their offerings.
  • Dashlane launches One-Tap Password Changer for Apple Watch and iPhone.
  • John Hancock Retirement Plan Services now offers Morningstar’s HelloWallet financial wellness tool to plan-sponsors on its Total Retirement Solution platform.
  • Arroweye Solutions to provide EMV Credit and Debit Cards for Mountain America Credit Union.
  • TechCrunch: Betterment tops 100,000 customers and $2.5 billion AUM.
  • Taulia reports record revenue and ten customer wins for Q2 2015.
  • Mobile Payments Today looks at InComm’s drive to bring open-loop prepaid to mobile wallets.

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.

 

Social Money Teams Up with Sallie Mae to Provide Goal-based Savings Accounts

SocialMoney_homepage_June2015

Having established itself as a goal-saving solution for millennials with its SmartyPig solution, Social Money is now gearing up for the next generation with its new partnership with educational lender, Sallie Mae.

Sallie Mae will use Social Money’s CorePro technology to build savings accounts for educational expenses such as tuition and books. The accounts are part of Sallie Mae’s Upromise program and will be rolled out this summer.

The partnership “validates a lot of trends” said Social Money co-founder Jon Gaskell in a telephone conversation after the deal was announced. First, it demonstrates the value of its new technology organizations can use to make goal-based savings accounts easy to set up, administer and, importantly, be cost-effective.

SocialMoney_FS2012_stage

(Left to right): Social Money co-founders Scott McCormack, president, and Mike Ferrari demonstrated their GoalSetter solution at FinovateSpring 2012 in San Francisco.

Second, Social Money’s relationship with Sallie Mae shows banks there may be more value in their “low-balance” clientele than they think. “Sallie Mae would have to pay a lot of money to bank these accounts,” Gaskell said. “CorePro makes it easy to provide an account to customers and not affect the business model.”

Social Money co-founder and President Scott McCormack agreed. A banker by trade, McCormack spoke about the challenges of serving low-balance segments such as students and the underbanked. Often the only way to offset the costs is through higher fees, he said, which is not what low balance segments want or will pay for.

“CorePro eliminates that issue,” McCormack said. “We provide a core processing solution to the bank at a cost-effective entry point so (the bank) can provide a value-added user experience.”

CorePro-main+image

“We help (banks) profitably bank customers they can’t reach,” said Gaskell. “Many of them don’t have the best feelings about banks, or about needing them. We provide a bridge to the next generation of bank customer.”

The Upromise program from Sallie Mae helps students and their families save money for education expenses via a rewards program that provides cash back for school when shopping with any one of Upromise’s more than 850 retail partners. Upromise also provides a MasterCard credit card with a cash-back-for-college plan, and a high-yielding savings account. Even though Upromise has been in operation for 13 years, Sallie Mae’s Charles Rocha, executive vice president, welcomes the new relationship with Social Money.

“We are consistently looking for new ways to enhance our customer experience and provide products and services to help our customers effectively save, plan, and responsibly pay for college,” Rocha said. “Social Money’s platform will provide a simple, straightforward, and consumer-friendly system for our new college savings account.”

Headquartered in Des Moines, Iowa, Social Money was founded in 2008 as SmartyPig, and rebranded as Social Money ahead of its appearance at FinvoateSpring 2012. CorePro was officially launched in 2013. The technology has been deployed by FIs like The Bancorp and Lincoln Savings Bank, as well as payment processors such as The Members Group. Qapital, another Finovate alum, has leveraged Social Money’s savings account and core processing power to build its own PFM app.

Finovate Alumni News

On Finovate.com

  • Social Money Teams Up with Sallie Mae to Provide Goal-based Savings Accounts
  • Finovate Debuts: Shoeboxed’s Features Help Banks Dig Into Level 3 Data
  • Personal Capital Launches Retirement Planner to Give You a Reality Check

Around the web

  • Trustly creates double-digit increase in conversion rate after launching with Logitravel, now constitutes 40%+ of all transactions.
  • PYMNTS interviews Vishal Patel, senior marketing leader at Tradeshift on how the company makes the supply chain run smoothly.
  • Personal Capital launches retirement-planning tool.
  • Finance Magnates features Tradier in today’s Fintech Spotlight.
  • NICE Actimize, a division of NICE Systems, launches its Customer Due Diligence suite.
  • Mobile Syrup features FinanceIt, “the money lender for the smartphone age.”
  • InvestorIntel for Investors highlights Lending Club, Prosper, and FundAmerica in its look at startups in the crowdfunding industry.
  • Upstart Business Journal talks about how Malauzai Software is enabling “wearable banking.”
  • Let’s Talk Payments interviews Jingit CEO Kate Bolster.
  • BuzFeed lists TradeHero among its “13 apps that’ll teach you something new every day.”
  • Business Insider examines how LoopPay could help Samsung take the “early lead” in mobile payments.
  • PaymentsSource quotes Prairie Cloudware CRO Doug Parr in a column on Apple Pay adoption (sub req).
  • Payments Source features BehavioSec’s biometric security solution (paywall).
  • Emitac Enterprise Solutions partners with Kony to speed the delivery of enterprise mobile apps.
  • Cartera Commerce launches Splender, a new eCommerce and cash-back shopping website.

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

  • Azimo Lands $20 Million in Series B Investment Led by Frog Capital
  • Narrative Science Launches Quill Portfolio Review

Around the web

  • INETCO teams up with Printec Partners to bring customer transaction data and analytics to FIs in Central and Eastern Europe.
  • MasterCard to provide tokenization support for private-label credit cards used in digital wallets.
  • Dwolla joins steering committee of Fed Fast Task Force dedicated to creating a faster payment system.
  • iSignthis partners with IPGPAY Ltd., bringing online identity-verification to clients in the Asia Pacific region.
  • Avalara acquires Belgium-based VAT Applications. Check out Avalara at FinDEVr on 6/7 October 2015 in San Francisco.
  • Kabbage partners with UPS Capital Partners to offer more SMBs access to a loan through UPS. Kabbage will present at FinDEVr in San Francisco this 6/7 October.
  • SandHill mentions SnoopWall as 1 of 5 cool, pre-VC cybersecurity startups.
  • First Data launches Clover Mini for accepting Apple Pay, Android Pay, and other NFC-enabled wallets.
  • Thinking Capital announces new name, visual identity and tagline.
  • Insuritas partners with Gate City Bank to install insurance-agency solution in the North Dakota-based bank.
  • BizEquity signs distribution agreement with Four Seasons Financial Group, a wholesale insurance and investments provider for institutional markets.
  • Social Money and Sallie Mae Partner to Create New Digital Banking Solution.
  • The Coin Telegraph talks open source software and fintech innovation with Quantopian.

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: March 6, 2015

  • Finovate-F-Logo.jpgAmerican Banker: Qapital the first nonbank in the U.S. to go live with Social Money’s CorePro API.
  • Finovate Debuts: Quantitative Credit Research Helps Lenders Understand Economic Risks.
  • PayPal buys CyActive, an Israeli cyber-security company.
  • Community & Southern Bank to deploy digital banking solutions from Digital Insight.
  • BioCatch launches its new account-fraud-detection solution.
  • Bill.com appoints Sheela Zemlin to SVP of Sales and Customer Success.
  • MasterCard and Microsoft partner to encourage financial inclusion in Mexico.
  • Temenos acquires Multifonds, an international fund administration software provider.
  • SecondMarket among bidders in U.S. government’s third Silk Road bitcoin auction.
  • Listen to Tradier CEO Dan Raju on Money Talk with Jesse Torres.
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.