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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
According to market intelligence platform Tracxn, funding for U.S.-based tech companies in Q3 of this year fell, both in comparison to the previous quarter as well as when compared to Q3 2023. Tracxn also reported that the number of tech unicorns actually increased this year compared to last year, with 13 new unicorns acknowledged in Q3 2024 compared to just five in Q3 2023. And while the report took this as a positive sign that “investor sentiment is stable,” there are other indications that the much-anticipated return to more robust funding trends for tech companies in general, and fintechs in particular, has yet to arrive.
Laura Bock, partner at QED Investors, was quoted in The Financial Brand back in January saying that “53% of fintechs will be cash out by Q3 2024 if they do not raise or exit.” We have a few more days before some of the research firms begin producing their Q3 reports on fintech funding, but clearly expectations are low.
Looking at our own Finovate alum funding for Q3 2024, we see plenty of evidence of the funding drought. In terms of the number of alums that reported receiving funding, as well as the amounts invested, Q3 alum funding for this year is as low as it has been in quite some time.
Previous quarterly comparisons
Q3 2023: More than $293 million raised by eight alums
Q3 2022: More than $1 billion raised by eight alums
Q3 2021: More than $1.1 billion raised by 14 alums
Q3 2020: More than $1.2 billion raised by 21 alums
Top equity investments
The top equity investment for Finovate alums in Q3 2024 was the $9 million raised by Illuma Labs. Headquartered in Plano, Texas, and founded in 2016, Illuma Labs debuted at FinovateSpring 2019 and has been a staple of our Spring and Fall conferences ever since. The company won Best of Show at FinovateFall in September for a demo of its Illuma Shield real-time voice authentication solution, now equipped with the latest deepfake detection technology to help prevent account takeover fraud.
Also noteworthy were the fundraisings from two brand-new alums: Dotfile, a regtech based in Paris, France, which debuted at FinovateEurope in February; and Scamnetic, an AI-powered anti-fraud solution provider that first appeared on the Finovate stage at FinovateFall in New York last month.
Here is our detailed alumni funding report for Q3 2024.
July 2024: An undisclosed amount raised by one alum
If you are a Finovate alum that raised money in the third quarter of 2024 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.
PayPal is launching its PayPal Complete Payments platform in China, offering seamless cross-border payment solutions.
The platform, which initially launched in the U.K., Canada, and Europe, helps merchants settle funds quickly and manage international payments.
PayPal estimates the new tool will help Chinese merchants to reach over 400 million PayPal users globally.
PayPal, which just released its stackable in-store and online rewards system PayPal Everywhere earlier this month, has a new take on what it means to be “everywhere.” The California-based company is launchingPayPal Complete Payments in China this week.
Originally debuted in the spring of this year, the PayPal Complete Payments platform integrates customized products and solutions to help merchants sell globally, streamlining payments and receivables. Upon launch, the platform was available to small and mid-sized enterprises in the U.K., Canada, and more than 20 European markets.
“We are excited to bring PayPal’s Complete Payments solution to China, empowering businesses with secure, seamless cross-border transactions and helping them tap into global markets,” said PayPal President, Global Markets Suzan Kereere. “This launch marks a significant milestone in PayPal’s mission to revolutionize commerce globally, bridging Chinese businesses with consumers around the world in a more efficient and transparent way.”
Over time, PayPal plans to add multiple capabilities to PayPal Complete Payments in China. The company will:
Use its network to enable Chinese merchants to reach over 400 million active PayPal users and billions of international consumers who use card and APM payments.
Settle funds quickly to allow merchants to get quick and easy access to their funds.
Offer tailored products– including RMB Transfer and Vendor Payouts– for Chinese merchants to enable fast and secure global fund management and facilitate settlements from PayPal accounts to domestic bank accounts.
Help merchants analyze risk and protect against fraud with AI-powered tools that can reduce time spent managing disputes.
“As one of the first e-commerce platforms to bring PayPal Complete Payments to China’s merchants, we are thrilled to support their expansion into global markets,” WooCommerce Chief Marketing Officer said Tamara Niesen. “This partnership delivers a tailored user experience for WooCommerce merchants, enabling cross-border businesses to confidently scale with PayPal’s advanced solutions.”
PayPal has offered its payments capabilities in China for almost two decades. By partnering with China UnionPay, along with other key players in the region, PayPal is currently engaged with over 700 merchants from across the country. Despite help from partners, PayPal is also able to hold its own in the region. In 2020, the company acquired a 100% stake in Chinese payments firm GoPay, becoming the first foreign company to fully own a Chinese payments platform.
This week’s edition of Finovate Global looks at recent developments in the fintech scene in Canada.
First up, we head over to Toronto, Ontario, where embedded payroll software company Nmbrhas secured $5.6 million (CAD$7.6 million) in seed funding. The round featured investors Panache Ventures, Golden Ventures, Motivate Venture Capital, and Luge Capital. In a statement, the company indicated it will use the funding to fuel growth and accelerate product development. And while focused presently on the Canadian market, Nmbr believes the investment will enable the firm to explore expansion opportunities in other countries.
“We’re incredibly grateful for our investors’ support and their confidence in our mission to empower businesses across the country with embedded payroll solutions,” Nmbr Co-Founder and CEO Simon Bourgeois said. “With these integrated systems already gaining traction in the U.S., we’re excited to extend these proven strategies to Canada.”
Founded in 2023, Nmbr simplifies complex financial products like payroll. The company’s technology enables businesses to embed Canadian payroll within their offering in days or weeks, rather than in years as is often the case with traditional payroll systems. Companies partnering with Nmbr have added payroll alongside operations such as AP/AR automation, employee scheduling, e-commerce, employee benefits management, and more. In addition to its funding announcement, Nmbr also reported that RBCx, the technology and innovation arm of Royal Bank of Canada, will serve as the company’s banking partner.
Staying in Ontario, but traveling 300 or so miles east, takes us to Ottawa and the home of Salt Edge, an open banking solution provider for banks, lenders, and other fintechs. This week, the Canadian fintech announced that it is helping Multitude Bank enhance its loan repayment processes to enable instant loan repayments.
“Salt Edge’s solution stood out due to its flexibility, competitive pricing, extensive coverage, and readiness to adapt to Multitude’s specific needs,” Multitude Bank CBO and Deputy CEO Dario Azzopardi said. “These factors were pivotal in choosing Salt Edge as a partner in this initiative.”
A core subsidiary of the Multitude Group, Multitude Bank will leverage Salt Edge’s technology, specifically using open banking method Pay-by-Link to provide customers with timely notifications about upcoming installments. The bank will use Salt Edge’s Payment Initiation solution to enable its customers to make instant loan repayments instead of relying on traditional online banking methods. The new process reduces transaction costs and connects bank clients with more than 2,300 banks across Europe.
“Open banking offers flexibility, and we’re happy to assist Multitude in supporting its clients with a safe and faster payment solution powered by open banking,” Salt Edge VP of Sales Erica Virlan said.
Salt Edge’s partnership with Multitude Bank comes just days after Moldova-based Victoriabank announced it was teaming up with Salt Edge to help ensure compliance with impending national legislation that will transpose European 2nd Payment Services Directive (PSD2) into Moldovan law. Also this month, the Canadian company forged new partnerships with international financial services company Ebury and Moldova’s Comertbank.
Salt Edge made its Finovate debut at FinovateEurope 2018 in London. The company offers an Open Banking Gateway that enables financial institutions to secure instant access to accounts in 5,000 banks across Europe, GCC, APAC, and the Americas for account information and payment initiation. Salt Edge also offers an Open Banking and Compliance Solution that helps banks and Electronic Money Institutions (EMIs) become compliant with PSD2 and open banking requirements.
Canada has a well-deserved reputation as a welcoming country. As of 2023, with more than eight million immigrants earning permanent residence status in Canada, immigrants currently make up approximately a fifth of the country’s population.
With this in mind, it is heartening to read news that Scotiabank has expanded its partnership with Canadian cross-border credit bureau Nova Credit. The two entities will work together to help newcomers from countries including Australia, India, Kenya, Mexico, and Nigeria to leverage their credit history from their home country to help them access higher credit limits when applying online for financing in Canada.
“Canada relies heavily on the success of our immigrant population and the contributions they make to our economy,” Scotiabank SVP for Retail Customers, Tanya Eisener said. “In an increasingly digital world, a person’s history doesn’t have to start over when they move to a new country. Being able to access their foreign credit report through Nova Credit’s credit service allows us to get a better understanding of their credit risk and ultimately help them settle in Canada faster.”
The expanded partnership between Scotiabank and Nova Credit is designed to tackle the challenge of “credit invisibility” or the absence of a credit record. In Canada, based on data from 2015 through 2019, more than 25% of those considered “credit invisible” were immigrants. Further, more recent immigrants, those who had been in the country for less than two years, were nearly twice as likely to be credit invisible compared to native-born Canadians.
Scotiabank is a multinational banking and financial services company based in Toronto, Ontario. The bank offers a range of services including personal and commercial banking, wealth management, private banking, corporate and investment banking, and capital markets. The institution has more than 90,000 employees and assets of more than $1.3 trillion as of April 2023.
Headquartered in San Francisco, California, Nova Credit is a consumer-permissioned credit bureau that specializes in helping businesses make informed decisions on thin-file, no-credit history, and new-to-country credit applicants. Founded in 2016, Nova Credit expanded to Canada in 2023 as part of its initial partnership with Scotiabank.
Here is our look at fintech innovation around the world.
A partnership between Mastercard and ZOOD will bring virtual Buy Now, Pay Later cards for consumers in Uzbekistan. Read more about fintech in Uzbekistan in our Finovate Global interview with Oliver Hughes of TBC Uzbekistan.
Latin America and the Caribbean
Uruguayan cross-border payment platform dLocal teamed up with Asia-based mobile wallet ShopeePay.
Proclaiming itself the first digital bank dedicated to customers with disabilities, Brazil’s Parabank partnered with Dock to launch a new suite of credit and prepaid cards.
Payments innovator NETSTARS teamed up with ACI Worldwide to boost development of cashless payments in Japan.
Singapore-based Bybit introduced new Shariah-compliant cryptocurrency accounts for Muslim investors.
HSBC launched new financing plan for SMEs in Hong Kong.
Sub-Saharan Africa
Africa-focused investment firm Helios Investment Partners led a $100 million Series D funding round in Banking-as-a-Service (BaaS) and infrastructure API provider M2P Fintech.
Coming to America! African paytech Flutterwave has expanded its Send App remittance service to 49 states in the U.S. courtesy of a partnership with MainStreet Bank.
PayZeep, a Nigerian fintech startup, partnered with the Amalgamated Union of App-based Transporters of Nigeria (AUATON) to bring new payment options to drivers.
How is digital transformation impacting community banking? What can community banks do to maximize the opportunities that digitalization can provide? And what role should enabling technologies like AI play in helping community banks develop new products, new services, and new sources of revenue?
These are some of the questions posed to our fintech experts in our latest Streamly Subject Snapshot video on the digital transformation of community banking. Today’s conversation features insights and observations from:
Barb Maclean, SVP, Head of Technology Operations and Implementation at Coastal Community Bank (Linkedin)
“Your customers today are expecting to interact with their money at the time and place and mechanism of their choosing and they’re going to drive it off their phone, for the most part. So if you haven’t yet put in the kind of technology that enables them to do that in the way that they choose to do it, when they choose to do it, you’re definitely already behind the eight ball.”
John Waupsh, Chief Revenue Officer at Manifest Financial (LinkedIn)
“Certainly a lot of time the core is the scapegoat, whether it’s a real issue or not. ‘We as a bank have a challenge with X or building Y or doing some tactical thing because our data is being held by the core’ … The end of the story here is while it’s very challenging to switch core providers, every core, just like every vendor, wants to keep their customers around, wants to keep their clients around. So having progressive discussions with these providers, at an executive level, sharing strategy and moving forward together can usually be very productive.”
Brian Solis, Author of Mindshift: Ignite Change, Inspire Action, and Innovate for a Better Tomorrow (LinkedIn)
“Right now we have an ability to run our company as an intelligent company, an AI-first company, one that’s more intelligent, more integrated, and one that’s more focused on not just using AI to automate what we do, but looking to unlock the future. It’s prioritizing the use of AI in shaping new business models and operational models, products, services, with AI influencing every decision, from the problems the company chooses to solve, to explore new horizons, to the way it interacts with customers and employees.”
“Building the relationship is not about being personable, about saying, ‘Oh, we’ve got dog treats in our branch.’ That’s not going to grow your deposits. You need to bundle in additional services that grow your deposits without growing the cost of those. These include things like, say, account protection against scams and frauds. Things like an AI assistant that helps you answer tough questions about retirement and health care choices attached to it.”
Greg Palmer, Vice President at Finovate (LinkedIn)
“Community banks are in desperate need of new technologies, but they lack the resources that some of their larger competitors have, which means there’s a real opportunity for fintechs to come in and help them, give them new access to technologies that they need to stay competitive with their larger counterparts.”
Visa is acquiring fraud prevention company Featurespace to enhance its own fraud detection and risk-scoring solutions.
Terms of the agreement were undisclosed and the deal is expected to close in 2025 pending regulatory approvals.
The acquisition comes as Visa faces legal challenges from the U.S. DOJ over alleged monopolization in debit card markets.
Visasigned an agreement to acquire fraud prevention company Featurespace today. Financial terms of the deal, which is subject to closing conditions and regulatory approvals, were not disclosed. The deal is expected to close in 2025.
Featurespace was founded in 2008 as a project in Cambridge University’s engineering department. The U.K.-based company offers AI-based tools that analyze transaction data to detect fraud. The company’s ARIC Risk Hub assesses behavioral analytics in real-time to identify abnormal user behavior, and leverages machine learning to adapt to changing behaviors and new scams, while improving accuracy over time.
“Providing our clients with solutions that can adapt to and anticipate the changing threat landscape is of the utmost importance,” said Visa Global Head of Value-added Services Antony Cahill. “Featurespace’s strong foundation in AI will enhance our existing product portfolio and enable us to address our clients’ most complex and pressing challenges. We look forward to welcoming the Featurespace team to Visa.”
Visa expects that Featurespace will complement and strengthen its existing portfolio of fraud detection and risk-scoring solutions. By leveraging Featurespace’s expertise, Visa will empower its clients to manage payments fraud in real-time while minimizing false positives and ultimately cutting costs.
“Over the past 12 years we have served the financial services industry, building a company that has gone from strength to strength, and we are thrilled to become a part of Visa,” said Featurespace Founder Dave Excell. “With Visa, we can bring the innovation, integrity and purpose of our platform and our team to more payment service providers and ultimately, stop more people from becoming victims of financial crime.”
Shadowing today’s deal is Visa’s previous failed purchase of Plaid. In 2021, Visa was forced to terminate its planned $5.3 billion acquisition of financial data access company Plaid. At the time, the U.S. Department of Justice (DOJ) filed a civil antitrust lawsuit that ended the merger about a year after discussions were initiated. The lawsuit argued that Visa wanted to acquire Plaid to protect its U.S. debit business against the threat of the fintech. Visa argued that the DOJ did not understand its business and the competitive landscape, saying that Plaid would complement its existing capabilities.
Visa’s planned acquisition of Featurespace is quite different than that of Plaid, however. That’s because the fintech will likely be seen as enhancing Visa’s existing fraud management capabilities and does not pose the same competitive risks as the Plaid deal did.
Even still, the Featurespace deal comes at an interesting time for Visa. The payments giant is re-living some of its 2021 woes with the DOJ. The department sued Visa earlier this week, alleging that it is monopolizing debit card markets. “We allege that Visa has unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market,” said Attorney General Merrick Garland. “Merchants and banks pass along those costs to consumers, either by raising prices or reducing quality or service. As a result, Visa’s unlawful conduct affects not just the price of one thing – but the price of nearly everything.”
As some experts have pointed out, however, banks and merchants have multiple payment rails to choose from, and that Visa’s global market share is simply a result of capitalism.
Online brokerage firm TradeStation has partnered with open source algorithmic trading platform QuantConnect.
The collaboration will enable mutual customers to build and automate strategies with QuantConnect, and then execute their trades via their TradeStation brokerage accounts.
QuantConnect made its Finovate debut at FinovateEurope 2013. The company was founded in 2011.
Multi-asset online brokerage service TradeStation has announced a partnership with open source algorithmic trading platform QuantConnect. The two companies have integrated their solutions to enable mutual customers to create and automate their trading strategies on the QuantConnect platform, and then execute their trades via API through their TradeStation brokerage account.
“By integrating our personalized brokerage service with QuantConnect’s algorithmic trading platform, we’re providing sophisticated traders with powerful tools to develop, backtest, and automate their strategies, enhancing their ability to identify and execute new trading opportunities,” President and CEO of TradeStation Securities’ parent company, TradeStation Group, Inc. John Bartleman said.
The partnership combines two significant forces in the algorithmic trading tools space. TradeStation Securities provides institutional-grade tools and personalized services, enabling traders to buy and sell a wide range of assets including equities, equity options, and futures. A favorite of advanced retail and institutional traders, TradeStation caters to market participants who often require a more customizable and sophisticated trading experience, especially those who rely on algorithms to make buy and sell decisions. The integration will make the transition from building strategies to executing them in the market that much smoother.
“With this collaboration, mutual customers can create, manage, and analyze trading strategies from the new cross-platform integration,” QuantConnect CEO Jared Broad said. “TradeStation Securities is a well-known self-directed online broker-dealer and futures commission merchant, and it’s exciting to know that QuantConnect’s platform will be available to mutual customers.”
Founded in 2011, QuantConnect made its Finovate debut at FinovateEurope 2013. At the conference, the company demoed its cloud-powered stock market backtesting technology, which can simulate years of stock market data in minutes. The company’s quantitative analytics platform facilitates more than 500,000 backtests per month for a community of more than 300,000 quants and developers. QuantConnect’s platform is powered by the LEAN Engine, an open source infrastructure for algorithmic trading.
QuantConnect’s partnership with TradeStation Securities comes a month after the Miami, Florida-based firm announced an integration with brokerage platform Alpaca. Courtesy of the partnership, Alpaca users can leverage QuantConnect’s technology to design, backtest, and trade algorithmic strategies for stocks, ETFs, options, as well as cryptocurrencies.
It is no secret that banks are under pressure from a variety of sources: fintech upstarts, the rise of embedded finance, an increasingly dynamic regulatory environment, the pace of technological innovation–to say nothing of competition with one another.
For community banks, the pressure can be all the more intense. While many community banks enjoy a special relationship with local customers and businesses, this relationship does not prevent their patrons from wondering from time to time if the grass might be greener with a banking or fintech solution offered by another provider.
BNY recently surveyed community bankers to find out what they see as their top challenges–and opportunities–in the current environment. Conducted in partnership with the Harris Poll, BNY’s 2024 Voice of Community Banks Survey provides some interesting insights into where community banking is today, and what it needs in order to be successful in the years to come.
Wealth management and treasury services in demand
The growing interest in wealth management and treasury services was one of the more exciting insights from the BNY survey of community bankers. With the aging of the Baby Boomers and Millennials entering prime family formation years, it is little surprise to see a growing demand for everything from investment to estate planning. Relative to their larger rivals, community banks have not been as active in wealth management. But some have argued that community banks could change this by better leveraging their more personal relationships with their customer base to entice them away from faceless, corporate asset managers and large institutions. In fact, 100% of the community banks surveyed indicated that they want to add wealth management services to their offering.
At the same time, the interest in treasury services is perhaps even more eye-catching. The advent of real-time payments has made treasury services an increasingly attractive offering for financial institutions. In the same way that more personal relationships with individual customers can make wealth management services worthwhile for community banks to offer, so can the personal relationships these institutions have their local businesses encourage them to consider seeking treasury services where they are already doing much, if not all, of their banking business. According to BNY’s survey, fully 95% of community banks surveyed are inclined to agree that they would like to see treasury services added to their portfolio.
AI, tech, and digital transformation
While nearly half the community banks surveyed indicated that they saw themselves as “innovative within their communities,” that has not stopped most of them from wanting to enhance their products and services–as well as offer new ones– via digital transformation and enabling technologies. Interestingly, the survey did not just ask about technology per se, but instead queried them to find out specifically what they hoped these enabling technologies would do. To this point, nearly 30% pointed to efficiency and security as two major needs and indicated offerings like instant payments and automated loan processing both responded to these needs and helped community banks maintain “a competitive edge.”
Yet, while more than 90% of community banks said they were ready to embark upon digital transformations, significant uncertainty about the actual readiness remains. Approximately half of the respondents considered their data analytics capabilities–key for maximizing technologies like AI–to be “advanced,” and less than 20% believed that they had any real expertise when it comes to data analytics.
Non-fintech partnerships
Partnerships with technology companies and fintechs is one way for community banks to improve their ability to take advantage of enabling technologies like AI. However, one interesting reveal from the BNY survey was the interest that many community bankers have in non-fintech partnerships.
Almost 30% of respondents indicated that they saw non-fintech partnerships–collaborations with institutions in retail and education–as opportunities that would be as important as fintech partnerships over the next five years. This, arguably, should serve as a wake-up call for those fintechs that are innovating in adjacent areas–from e-commerce and consumer lending to financial education and even college prep.
FinovateEurope 2025 takes place in London on February 25 and 26. Register to attend and save up to £798.
We are now accepting demo applications for FinovateEurope 2025. Working on new fintech, finserv, or techfin? Read on to learn more about showcasing your innovation to 1000+ senior decision-makers and hear from companies who recently demoed.
We’ve been watching FinovateEurope for a long time. It’s a great show. It’s an opportunity where you can’t hide behind a sales slide deck. You actually have to show the quality of your product.
-Richard Weston, Sales Director @ Tuum
Finovate’s somewhere that we really come to actually show new products and developments in our technology, and we’ve got the right audience here of bankers, buyers, and actual potential tech partners.
-Ambar Vitelli, Innovation Lead @ NayaOne
On February 25, more than 35 startup, established, and public companies will take the stage. And while time on the main stage is at the crux of the demo package, the rest of the demo experience has been carefully curated to give selected companies the best ROI.
Here are key components and what our 2024 demoers think:
Influential audience – demo in front of hundreds of high-quality attendees, including FI executives, fintech and tech giants, venture capitalists, industry press and analysts, and entrepreneurs.
The reason that we wanted to be on stage at Finovate was because it’s really one of the best opportunities to speak to such a broad variety of senior leaders across banking and insurance.
-Tom Somers, UK&I Director @ SkenerioLab
7-minutes demos – get the audience’s undivided attention and show them exactly what you can do. All demos are on the main stage, and there are no other sessions competing for attention.
Seven minutes, it’s a lot. You don’t feel it when you prepare, but on stage, it is a lot of time. You can explain everything. So don’t be afraid. Seven minutes is a lot.
-Roman Zilber, Founder @ Intrepid Fox
Frequent and strategic networking breaks – capitalize on the energy and momentum generated during your demo to connect with attendees at your stand and one-to-one meetings through the networking app.
Directly after the demo, a lot of people came to our stand, asking questions, wanting to learn more about it. So it’s definitely impactful.
Plug and play stands – generate leads and meet attendees at your dedicated stand (table, monitor, power, and signage included).
Expert coaching – hear a decade’s worth of best practices and feedback on crafting your demo and messaging for Finovate’s unique audience.
The rehearsals with Greg were absolutely amazing. They really helped us to shape our presentation. So at the beginning we were super focused on the product, but by the end of the rehearsals, we really focused much, much more on the value that we’re providing to the clients and potential partners here.
-Tom Somers, UK&I Director @ SkenerioLab
Demo videos – use your professionally edited video as a unique sales and marketing tool. Plus year over year, demoing companies have told us they receive business from companies seeing their video on Finovate.com.
Fandom – stay in the news. We follow you for the rest of time and share your product launches, capital raised, awards earned, acquisitions and expansions made to our thousands of followers.
It’s fantastic. I think the amount of coverage that sort of Finovate gets, you’ve been sharing on LinkedIn, been very active. So just getting our name out there really helps. . . . And I think it really got us in front of the right stakeholders for our business.
-Rohan Regmi, Co-Founder @ Zeed
If you’re ready to jump into the Finovate spotlight and generate new leads in 2025, apply now.
France-based regtech Dotfile has secured $6.7 million (€6 million) in new funding.
The round was led by Seaya Ventures. The company’s existing investors Serena and Hexa also participated in the investment.
Dotfile made its Finovate debut earlier this year at FinovateEurope 2024 in London.
Fresh off its FinovateEurope debut earlier this year, Paris-based fintech Dotfile has raised $6.7 million (€6 million) in funding. The round was led by Seaya Ventures, and featured participation from the firm’s existing investors Serena and Hexa. In a statement, the regtech innovator indicated that the funding will power its R&D efforts as well as fuel its international expansion plans.
Dotfile leverages AI to enable banks and other financial institutions to automate customer onboarding and ensure compliance with anti-money laundering (AML) regulations. The company’s business verification platform improves upon the traditionally manual, complex, and expensive Know-Your-Business (KYB) process by aggregating dozens of different data sources to produce a comprehensive picture of a business within 10 seconds.
“More than $200 billion is invested in compliance every year, yet 2% of the world GDP is still going through the money-laundering rinse cycle, which is fueling crime,” Dotfile CEO Vasco Alexandre said. “AI could change how effective those policies are and the positive impact for our societies could be massive.”
The investment in Dotfile comes at a time of growing awareness of the importance of compliance in financial services – and the ability of technology to help banks and other institutions meet these obligations. From banks seeking to maximize opportunities in fintech partnerships to cryptocurrency platforms eager for greater clarity on digital asset regulations, institutions throughout financial services are finding themselves in an increasingly dynamic regulatory environment. To help companies better manage their compliance obligations, a new generation of fintechs such as Dotfile have emerged with tools, workflows, and other solutions–often AI-powered–to streamline and enhance verification, ensure accurate auditability, and reduce costs.
“Compliance is costing banks up to 10% of their revenue, 1 out of 4 employees work in a compliance-related position and existing systems are sometimes more than a decade old,” Alexandre said. “With the competition from fintech intensifying, a transition is bound to happen and generative AI is the tipping point.”
Dotfile made its Finovate debut at FinovateEurope 2024 in London. At the conference, the French regtech demonstrated its end-to-end business verification platform that empowers compliance teams to streamline their operations. The company was founded in 2021 by Alexandre and Titouan Benoit, and received major support from startup studio Hexa (formerly known as eFounders). Today, Dotfile has more than 50 customers across 10 countries, including banks, private equity firms, and fintechs. Most recently, the company announced a partnership with private market investment platform Roundtable, helping the firm improve its KYC process to optimize and accelerate customer onboarding.
Xero and Klarna have partnered to allow small businesses to offer buy now, pay later (BNPL) options at checkout, giving consumers more flexible payment choices.
Under the partnership, Xero’s small business clients will have access to BNPL capabilities that may help boost revenue and enable more large-ticket sales.
This collaboration has the potential to help Xero’s small business clients maintain healthy cash flow by getting paid upfront.
Small business accounting software company Xero and global payments network and shopping platform Klarnaannounced this week that they have teamed up.
The deal is essentially a distribution partnership for Klarna, which will help Xero’s small businesses clients accept buy now, pay later (BNPL) payments from their consumers. Xero small business customers in all regions except Australia can offer Klarna at checkout as a payment option, providing a credit card alternative while still getting paid for the goods or services up front.
“We know that maintaining a healthy cash flow is critical to a successful business, and offering more ways to pay supports increased business growth and getting paid faster,” said Xero SVP Payments & Ecosystem Bharathi Ramavarjula. “In fact, our recent research report shows that if a business doesn’t offer customers their preferred way to pay, they are prepared to take their business elsewhere. By enabling our customers with more ways to pay, including Klarna, we can help them retain customers and increase their revenue.”
Klarna’s BNPL tools include a four-payment, interest-free installment plan, a 24-month financing option, and a pay-in-30 day option. Before a customer makes their purchase, Klarna verifies their eligibility and offers transparent terms of the payment. Once the purchase is made, the company follows up with reminders to help ensure that shoppers stay current on their payments. According to Klarna, 99% of the financing is repaid and 40% of orders placed are repaid early.
The partnership has the potential to provide BNPL capabilities to small businesses that would normally not be able to offer flexible payments or financing. By offering a more flexible payment option, these businesses have the potential to close more larger-ticket deals. It also has the potential to help businesses maintain healthy cashflow, as merchants using Klarna will receive the payment up front.
“This partnership brings Klarna’s flexible payment options to micro businesses of all kinds so business owners can get paid on time and their customers can choose how and when to pay,” said “Klarna Chief Commercial Officer David Sykes. “This includes businesses where gardeners and landscaping services using Xero can now offer a Klarna BNPL payment option, plumbers and heating engineers using Xero can fix their customers’ boilers and let them spread the cost while small businesses involved in the construction industry could spread the cost of smaller projects over three interest-free installments.”
Both Klarna and Xero have been in the fintech news cycle in recent months for different reasons. Last month, Klarna unveiled plans to cut its workforce in half in favor of AI-driven productivity. And earlier this month, Xero announced plans to acquire collaborative reporting tool Syft Analytics.
Voice authentication technology innovator Illuma Labs has raised $9 million in funding. The Series A round was led by LiveOak Ventures and featured participation from Forefront Ventures, Curql Fund, UsNet, Capital Factory, Connexus, and TDECU.
As the first major investment for the company, the capital will help accelerate the development of Illuma’s voice verification offerings to help banks and other institutions fight fraud, voice cloning, deep fakes, and more. Illuma Labs also plans to leverage the funding to expand its reach to more credit unions and banks across the country.
“While we are excited about the capital infusion to accelerate our development of fraud prevention and deep fake detection tools, we are equally excited about bringing in new partners to fuel Illuma’s continued commercial growth,” Illuma Co-Founder and CEO Milind Borkar said. He praised both LiveOak Ventures and Forefront Ventures for their operational expertise and industry connections and thanked investors Curql Fund, UsNet, Capital Factory, Connexus, and TDECU for their “continued support.”
Illuma Labs offers banks, credit unions, and other financial institutions the ability to replace their traditional, knowledge-based authentication protocols with a secure, real-time voice authentication solution. The company’s flagship product, Illuma Shield, delivers effortless authentication that enhances the customer experience, improves operational efficiency, and prevents fraud in contact centers.
The funding news arrives one month after the identity verification specialist inked a partnership with Americu Credit Union. The New York State-based CU added voice recognition technology to its Member Contact Center courtesy of a partnership with Illuma announced in August. Earlier this year, Illuma announced that SF Fire Credit Union was adding voice authentication technology to its call center via a collaboration between Illuma and fellow Finovate alum Glia.
Headquartered in Plano, Texas, and founded in 2016, Illuma Labs made its Finovate debut at FinovateSpring 2019. The company most recently demoed its technology on the Finovate stage earlier this month at FinovateFall, winning Best of Show for its latest deepfake detection technology that helps banks fend off a new generation of AI-enabled fraudsters.
