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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Royal Bank of Canada (RBC) launched two new capabilities for its NOMI financial intelligence platform. Unveiled today, NOMI Forecast shows users their future cash flow. The app also has increased its security with the launch of two-step verification upon login.
“At a time when Canadians are more conscious than ever of their daily finances, and banking digitally more frequently, they expect solutions that help them confidently manage their money and safeguard their accounts and information,” said RBC SVP Digital Peter Tilton. “With NOMI Forecast, we’re giving clients next generation cash flow advice and insights to take the stress out of balancing their accounts. Equally important, 2-Step Verification will work to provide clients added peace of mind as they navigate this rapidly evolving digital banking landscape.”
NOMI Forecast works by showing users all of the pre-authorized payments they have coming over a seven-day period. By accounting for known upcoming expenses, the forecasting capability offers users better visibility of their account activity and helps them have more control over their finances.
With the two-step verification process, users can select their mobile device as the primary channel to access the account. If they attempt to login with another device, they receive an in-app notification to verify their session. Unlike two-factor authentication, there is no security code delivered via email or text. Instead, the user presses a button to continue their session.
In a press release, RBC said that the two new features demonstrate the bank’s “commitment to add value, enhance security, and create peace of mind” for clients.
Financial document automation platform Ocroluspulled in $80 million in Series C funding today. The round was led by Fin VC and included participation from Thomvest Ventures, Mubadala Capital, Oak HC/FT, FinTech Collective, QED Investors, Bullpen Capital, ValueStream Ventures, Laconia, RiverPark Ventures, Invicta Growth, Stage II Capital, and Cross River Bank.
The New York-based company now boasts $127 million in funding and is valued at over $500 million. Ocrolus plans to use the funds to expand U.S. operations and “more aggressively” build products for banking and mortgage lending.
“Our platform helps lenders automate underwriting and intelligently leverage cash flow and income data for credit scoring,” said Ocrolus Co-founder and CEO Sam Bobley. “By enabling lenders to more quickly analyze diverse sources of financial data, Ocrolus levels the playing field for every borrower, providing expanded access to credit at a lower cost.”
Ocrolus was founded in 2014 to create a document processing automation solution that helps lenders classify, capture, detect, and analyze financial documents to make better lending decisions. To accomplish this, the company leverages AI, machine learning, and human-in-the-loop (HITL) optimization. The HITL component serves as Ocrolus’ key ingredient to differentiation because it ensures an enhanced level of accuracy when analyzing data derived from documents.
The company, which won a Best of Show award at FinovateFall last week for its document analysis technology, has benefitted from the recent acceleration of digitization brought on by COVID. In today’s lending environment, FIs need to offer online options to compete. We spoke with Ocrolus’ VP of Solutions Nicole Newlin last year on the effects of this digitalization.
Ocrolus’ client list is as impressive as it is extensive, including firms such as Brex, Enova, Lending Club, PayPal, Plaid, and SoFi. Accommodating for a recent uptick in demand, the company added more than 75 employees this year and plans to boost its hiring efforts next year, focusing specifically on machine learning and data science professionals.
It’s becoming easier and easier to earn awards from everyday – or every month – transactions. Bilt, a fintech that enables renters to accrue points that can be redeemed for rewards, announced this week that it has raised $60 million in new funding. The investment, which included Mastercard and Wells Fargo among its chief contributors, gives the company a valuation of $350 million.
Also participating in the funding were some of the country’s biggest real estate companies including AvalonBay Communities, The Blackstone Group, Douglas Elliman, Equity Residential, GID-Winsor Communities, LENx, The Moinian Group, Morgan Properties, Starwood Capital Group, and Related.
Tenants can earn points by either renting from a member of the Bilt Rewards Alliance of more than two million rental homes or by making transactions using the Bilt Mastercard. Points can be used in a wide variety of ways, including travel, fitness club membership, paying rent, or even as part of a down payment to help pave the path to homeownership. Via the Bilt Mastercard, cardholders can earn up to 50,000 points a year toward rent, and earn an unlimited amount of points that can be used on other transactions.
Bilt sees major opportunity in a market that consists of approximately 109 million renters who pay an estimated $500 billion in rent every year. The company said that it will use the additional funding to help scale its loyalty program, giving more renters the opportunity to get something more than shelter from what is typically an individual’s “largest expense every single month,” according to Jain.
Is there a better person to lead a conversation about bold leadership in fintech than Luvleen Sidhu? Chair, founder, and CEO of BM Technologies, Sidhu was the youngest female founder and CEO to take a company public when her firm listed on the New York Stock Exchange at the beginning of the year.
“I am proud to see BM Technologies take this historic step and enter the public markets,” Sidhu said in January. “We are delighted to be one of the first neo banking fintechs to go public. We are also EBITDA positive today, which serves to set us apart from other neo banking fintechs in the market.”
Formerly known as BankMobile, BM Technologies currently has more than two million account holders, and provides disbursement services at 700+ college campuses in the U.S., reaching one out of every three students in the country. The BaaS innovator was among the fintechs to earn recognition at the recently announced Finovate Awards, taking home top honors in the Best Fintech Partnership category for its collaboration with T-Mobile.
Beyond the Arc’s Steven Ramirez hosted a fireside chat with Luvleen Sidhu as part of the FinovateFall conference in New York last week. Below are a few excerpts from their conversation.
On what it takes to be a bold leader today
For me, being a bold leader really comes down to a few key things that, in my opinion, a bold leader would demonstrate. So that is being able to have a compelling and unique and unifying vision and purpose. (It is) being able to get people to buy into that, to be energized by that, committed to that. (It is also) being able to have superior execution, because you can have a great idea and be in the clouds, but unless you are working on improving, iterating, and being agile and adaptive to the times, you’re not going to succeed.
On the inspiration behind her company’s “bold bet” in 2016
We launched in 2015 as a direct-to-consumer strategy – like the Chimes, the Varos, the N26s of the world are doing now. We found out pretty early on that our pillar of being able to have a profitable, sustainable model as fast as possible wasn’t happening. The CAC was really high. We weren’t getting the sort of engagement and direct deposit customers which are critical in banking to actually get. So we took a bold bet in 2016 where we took a B2B2C approach and started implementing banking as a service, which is our strategy today.
On practicing bold leadership on an individual level
I think it’s contagious. When you’re bringing that innovative sort of passionate mindset and energy to work, then you engender that with everyone that you work with. It creates this ripple effect and you get others to buy in and work with you and you create a lot of tremendous momentum from that. I think it’s (important to) remain keen to continuous learning. This space is moving so fast. We can’t rest on our laurels for more than six months (before) you’ve got to innovate again. And so it’s people that make sure that they’re looking at what their customers are saying – and responding to that – but also looking at the competitive environment, how is it changing, how is it evolving … (That’s) how you remain competitive in the space.
A new partnership between American Express and New York City-based fintech Extend will give small businesses in the U.S. new options when it comes to using and deploying virtual cards. Specifically, U.S. companies with eligible American Express Business Cards will be able to use Extend’s technology to enroll and create virtual cards in as little as five minutes.
American Express EVP for Global Commercial Services Dean Henry highlighted the increased use of virtual cards during the pandemic – and the continued interest companies have in using the technology to facilitate contactless payments. “With today’s announcement, our Business Cards can work even harder for our Card Members through this quick and easy virtual Card option,” Henry explained. “This gives our Card Members enhanced flexibility and control across their day-to-day business spending, including for B2B purchases and enabling their employees to pay for expenses.”
The statistics on virtual card use by businesses support Henry’s assessment. A study conducted by American Express indicated that 39% of U.S. businesses expect to increase their use of virtual cards over the next 12 months. With regard to the specific benefits available via the new offering from Extend and American Express, there are at least seven – not including touchless payment ability – worth highlighting. These advantages include fast onboarding, flexibility and ease of use, spending controls due to the use of tokenization, better security and protection against fraud, streamlined expense reporting, automated card issuance, and the ability to earn rewards.
The two companies also noted in their partnership announcement that they planned to offer additional features and expand functionality in the future. Among the new functionalities anticipated is the ability to add American Express virtual cards to mobile wallets to facilitate in-store transactions.
“This market is rapidly growing as businesses realize just how versatile and effective virtual Cards can be,” Extend CEO Andrew Jamison said, “whether it’s managing subscription payments, equipping employees with secure company cards, or developing custom payment solutions with our APIs.”
Founded in 2017, Extend made its Finovate debut two years later at FinovateSpring in San Francisco, California. That same year, the Manhattan-based company raised $11 million in Series A funding in a round led by Point72 Ventures and the FinTech Collective, giving the firm a total capital of $14 million. More recently, the virtual card platform company forged partnerships with Mastercard and TSYS in the fall of 2020, and with City National Bank in January of this year.
American Express joined the Finovate alum club via its 2015 presentation at our developers conference FinDEVr Silicon Valley. At the event, members of the company’s engineering team discussed the evolving role of B2B payments in the e-commerce ecosystem, and how American Express was “bringing commercial payments to the cloud.”
At FinovateFall last week, Citizens Bank of Edmonds CEO Jill Castilla described how she is leading her bank through the pandemic. In her 16-minute address, she described how her bank navigated the decision making process and leveraged fintech relationships to help their small business customers survive COVID lockdown.
Citizens Bank of Edmonds was founded in 1901, has $400 million in assets, and 55 employees. The bank aims to serve everybody and has a goal to be the best at everything. And while that sounds like a lofty goal, the bank has proven that it is up to the task by implementing unique solutions that come alongside customers to meet their needs.
So what does it take to be such a successful bank in both the eyes of competitors and customers? Here are three takeaways from Castilla’s keynote that are worth considering.
Communication is foundational
By today’s standards, Castilla is very liberal about offering up her contact information. During the pandemic, she was quick to share her cell phone number; she even tweeted it out multiple times! Providing this open line of communication to both staff and customers was key to ensure that nobody fell through the cracks. Castilla even concluded her keynote by sharing her phone number, saying, “You’re welcome to text me any time.”
But it doesn’t end there. When the pandemic hit, Castilla made sure to contact all of Citizens Bank of Edmonds’ business customers to determine their main areas of stress. And when the bank had to close its lobby, it sent employees to meet customers at the curb to schedule time slots to serve its customers and maintain the personal touch.
Look forward
Castilla watched Frozen II during lockdown and the quote, “All one can do is the next right thing” caught on. In trying to make decisions for the bank, Castilla and her team would consider “the next right thing.” In other words, they would think about what the best decision would be for the future, and not for the present moment.
Castilla offered the example of using the mantra to determine if Citizens Bank of Edmonds should host its annual block party at a time when COVID was just getting started. Thinking about the next right thing made it easy for the bank to call off the party.
And while a block party may seem trivial, consider this mantra implemented for a larger, more strategic decision making. Questions such as, “should we make an investment in AI technology?” or, “should we partner with this up-and-coming fintech?” are a bit easier to answer when filtered through the lens of the next right thing.
Focus on the needs of clients
This takeaway ties back into the first two points, because if financial institutions maintain a foundation of communication while focusing on the next right thing, they will ultimately be doing what is best for their clients.
“Doing the right thing will help you find your people,” Castilla said during her keynote, “And talking about what’s important to you out on social media and the digital space will help you connect with people.” She also noted that both banks and fintechs are trying to do what is best during this challenging time, adding, “Collectively and individually, while working together and on our own, we’re going to change the world for [consumers and small businesses], we’re going to provide greater access to credit, we’re going to have a better understanding of what their financials are, (and) we’re going to help them run more successful businesses.”
JP Morgan Chase announced this week it will replace its U.S. core banking suite with U.K.-based Thought Machine’sVault.
Founded in 2014, Vault is a cloud native core banking engine that leverages smart contracts to help banks and fintechs build in the cloud and avoid the constraints of legacy technology. Vault provides a full range of retail and small business banking capabilities, including checking accounts, savings, loans, credit cards, and mortgages.
In the future, Thought Machine plans to build Commercial and Private Wealth offerings into Vault, as well.
JP Morgan, which was in the headlines yesterday for its purchase of college planning platform Frank, will benefit from Vault. The technology’s cloud-based nature will decrease the siloed structure that comes with most large, legacy banks. Instead, JP Morgan will operate as a universal banking platform where all products run on a single system.
“JPMorgan Chase represents one of the most ambitious, powerful financial institutions in the world—and our joint work signals to the finance industry that cloud native core banking technology is the future for financial services,” said Thought Machine CEO and founder Paul Taylor. “We are delighted to be working with JPMorgan Chase on this project, delivering modern core technology to the bank, and powering the next generation of financial services in North America.”
Thought Machine, which raised $125 million last year, is said to be working on another $205 million funding round. The company has seen significant growth over the past year and has scaled up its clients base to include Lloyds Banking Group, Standard Chartered, Atom bank, Monese, and SEB. Not only that, the company added 100 employees in the first half of 2020.
As part of our #womeninfintech series, we spoke with Karen Gordon Mills, a Senior Fellow at the Harvard Business School and a leading authority on U.S. competitiveness, entrepreneurship, and innovation. She details her perspective and experience with small businesses and lending, and highlights several other women leading the charge to create a better future with fintech.
How did you become interested in fintech?
Karen Mills: My interest in fintech grew out of my work with small businesses.
As Administrator of the U.S. Small Business Administration (SBA) from 2009 to 2013, I had a front-row seat to the challenges that small businesses face when accessing bank capital. Getting a loan is an onerous process even for the most creditworthy small business owners. It often involves carrying stacks of paperwork to a local bank and waiting months for a decision. That’s because for banks, lending to small businesses is actually pretty hard. They tend to lack complete information about the business that would allow them to determine profitability or cash flow, and since small businesses are such a heterogenous group, it’s difficult for loan officers to develop expertise in a specific sector. These frictions have led to a credit gap, especially among the smallest and most vulnerable businesses.
The traditional lending process wasn’t working for this critical part of our economy. Yet it had been this way for decades and only started to change in the late 2000s, around the time I was at the SBA. That’s when a wave of new fintechs entered the market. The fintechs gathered nontraditional data streams from their small business customers (like daily transactions) to get around the lack of information, integrated them using application programming interfaces (APIs), and deployed machine learning tools to quickly generate insights about the business and automate loan decisioning. All of a sudden, small businesses could submit applications, receive decisions, and find new funds in their accounts in a matter of days.
I thought fintech’s potential to transform small business lending was so transformational that I wrote a book describing its evolution and possible outcomes: Fintech, Small Business & the American Dream. I’ve continued to speak about and research fintech developments in my current role as a Senior Fellow at Harvard Business School.
How have you seen the industry change across your career?
Mills: Lots of people initially thought the fintechs would knock traditional banks off the map. But that hasn’t happened. Although banks might be less nimble or tech-savvy, they have established customer bases and low-cost capital—which most fintechs don’t. One big change we have seen in recent years is a rise in bank-fintech partnerships, with each seeking to benefit from the other’s strengths. Another important development is the presence of Big Tech companies, like Apple and Amazon, whose wide reach and ability to create seamless user experiences allow them to make rapid and large-scale inroads with small businesses.
The pandemic has obviously brought massive change over the last year, and accelerated the uptake of digital technologies for both lenders and borrowers. The Paycheck Protection Program (PPP) played a key role, pushing banks to overhaul their systems and get money out the door at an unprecedented pace. Fintechs were especially important in distributing aid dollars to the smallest businesses, and they may be able to leverage that success into new customer relationships. Meanwhile, with more and more activity occurring online, small businesses will likely adopt new digital tools to serve their various needs—in everything from lending to advertising.
How have you seen female leadership influence the fintech space, particularly around small businesses?
Mills: Women have developed some of the most transformative and innovative fintech solutions that I’ve seen for small businesses. For example, Kathryn Petralia co-founded Kabbage, a company that pioneered the use of alternative data and machine learning to automate small business lending. As the head of Square Capital, Jackie Reses built out Square’s similarly data- and technology-driven strategy for providing small business loans. Both of these women, and many others like them, have created crucial new opportunities for small businesses to grow and thrive.
Women’s leadership has also been influential in other, related spaces. In traditional banking, women like Jill Castilla, the CEO of Citizens Bank of Edmond, a community bank in Oklahoma, are spearheading digital transformations intended to provide better service for small businesses. In academia, female economists like Professor Sabrina Howell of NYU are doing crucial research around fintech’s impact on small businesses—including demonstrating how fintechs like Kabbage and Square played an outsize role in delivering PPP funds to minority-owned businesses during the pandemic.
What more do you think can be done to support women in fintech?
Mills: First and foremost, we need more women in fintechs, in banks, and in the research and policy areas too. There are talented women coming up in banking and in other areas of finance who will push the industry to adopt more innovative solutions.
And, yes, there are things we can do to help. Investors need to funnel more money to female founders in fintech, and established companies and organizations need to implement better recruitment and selection strategies. There are brilliant, highly-qualified women out there who may well have the next big idea or innovation for small business customers. We just need to be more deliberate about bringing them on board and promoting them to the highest leadership levels – in ways that account for the biases and obstacles that women often face.
We also need to be aware that simply recruiting more women isn’t good enough. It’s crucial to actively foster cultures of diversity, equity, and inclusion that provide women—and all underrepresented groups—with the resources and opportunities they need, and with an environment in which their contributions are valued. Organizations that do this well will be more successful in innovating and winning in a rapidly changing environment like the worlds of banking and fintech.
What advice would you give to women starting their careers in the industry now?
Mills: Fintech is a great industry to be in. Traditional banking is being challenged and organizations are more open to innovative thinking – because they have to be. Female leaders are most often excellent problem solvers. The solutions that fintechs put forward are game changing. Better access to capital can have a significant impact on the success and wellbeing of small business customers, and on the American economy.
My advice to women is that this is a critical time to get involved. Work to build a new environment that closes gaps in the market and improves access and opportunity for a more diverse set of small business owners. Get engaged, build relationships (and help each other out), pursue your ideas, and stay committed to your goals.
Trustly, the company that helps customers pay directly from their bank account, launchedInstant Payouts for U.S. users this week.
The service helps U.S. businesses provide their clients with near-instant payouts to their bank accounts. Instant Payouts in the U.S. is made possible via a partnership with Cross River Bank, which participates in The Clearing House’s (TCH) RTP network, a real-time payments rail.
Trustly’s business users can fund payments with Cross River Bank, which will send RTP payments on their behalf to their customers’ accounts at other participating RTP banks.
“The RTP network provides a platform for financial institutions and their corporate users to create innovative new payment products for their customers,” said TCH SVP of technology and Innovation Bijan Chowdhury. “Trustly’s partnership with Cross River Bank to deliver Instant Payouts to U.S. businesses and Cross River Bank’s use of the RTP network to send instant payments to the the businesses’ customers illustrates the power of the RTP network to boost innovation in the payments industry.”
Trustly was founded in 2008 and supports card-not-present payments for online merchants to offer a secure way for consumers to transact using their online banking access credentials. Last year, the company processed over $21 billion in transaction volume in its network. At FinovateEurope 2017, the company debutedDirect Debit, a payment offering that removes the pain of entering payment card information by allowing users to transact using their current account by entering their bank login credentials.
Trustly works with more than 8,100 merchants, helping them connect with 525 million consumers and 6,300 banks across 30 countries. The company has 500 employees across Europe, North America, and Latin America.
The company is adding a handful of features that bring it into “super app” territory, competing with the likes of WeChat, Alipay, and Paytm. PayPal’s app already offers a peer-to-peer payment tool, a mobile wallet, and a charity donation feature.
The new release, however, will offer more features and new banking capabilities. Here’s a rundown of what to expect:
PayPal Savings, a new, high-yield savings account provided in partnership with Synchrony Bank that pays 0.40% APY
In-app shopping tools that allow customers to discover and earn loyalty rewards
Billpay management tools that help users track, view, and pay their bills
A new Direct Deposit feature that fronts users their paycheck up to two days early
Rewards capabilities
Gift card management
Credit access
Buy Now, Pay Later services
Crypto purchasing, holding, and selling abilities
The app will show users a personalized dashboard of their account; a wallet tab to manage payments and direct deposits; a finance tab to access savings and crypto accounts; a payments tab that enables users to send and receive money, make a donation, and manage billpay; and a messaging feature built around peer-to-peer payments.
“We’re excited to introduce the first version of the new PayPal app, a one-stop destination for our customers to take charge of their everyday financial lives, with new features like access to high yield savings, in-app shopping tools for customers to find deals and earn cash back rewards, early access Direct Deposit, and bill pay,” said PayPal CEO Dan Schulman. “Our new app offers customers a simplified, secure and personalized experience that builds on our platform of trust and security and removes the complexity of having to manage multiple financial or shopping apps, remember different passwords and track loyalty rewards.”
What’s next for PayPal’s Super App? The company will add investment tools, offline QR code payments, and new shopping and deals capabilities.
PayPal is currently the closest thing the U.S. has to a super app. However, the new app is still missing some key elements that Asia’s successful super apps have, including food delivery, transportation, travel, health, insurance, government, and public services.
A strategic partnership between Finovate alums Q2 and Plaid will give 18 million consumers across more than 500 banks and credit unions the ability to access 5,500+ fintech apps and other digital banking features. The alliance, announced today, combines Q2’s digital banking platform and Plaid’s open finance platform, Plaid Exchange. The goal is to provide customers with a secure and reliable way to both connect accounts to digital apps and services, as well as give them the tools to manage these connections.
“At Plaid, we believe all consumers should have access to digital financial services, regardless of where they bank, and the Q2 team shares this same mission,” Plaid director of strategic partnerships Reed Bouchelle said.
The partnership also will enable Q2’s financial institution customers to leverage Plaid’s APIs to give accountholders fast, easy, and secure digital account funding. New customers will be able to save time and effort by linking their bank accounts during the account opening process to fund new accounts in seconds rather than days.
“Our partnership extends beyond data access,” Bouchelle continued. “With Plaid, Q2 financial institutions will enable consumers to more easily fund new accounts and see a holistic view of spending and net worth across all of their financial accounts,” he said. Bouchelle credited a quartet of Plaid solutions – Exchange, Auth, Identity, and Transactions – for ensuring the comprehensive nature of the new functionality.
Q2 Chief Technology Officer Adam Blue highlighted the needs of financial institutions serving diverse communities in emphasizing the importance of the partnership with Plaid. “To stay competitive in the market, and provide unparalleled customer experiences,” Blue said, “FIs need to offer the services their customers expect. By integrating Q2’s digital banking platform with Plaid Exchange, Q2’s financial institutions will be able to effectively partner with fintechs while providing improved end-user experiences to their customers.”
Austin, Texas-based Q2 was founded in 2004 and made its Finovate debut (as Q2ebanking) at FinovateSpring seven years later. The digital banking and lending solution provider went public in spring of 2014 under the ticker symbol QTWO, and currently has a market capitalization of $4.8 billion. The company’s Plaid partnership announcement comes just weeks after Q2 inked a deal with Stanford Federal Credit Union ($3.6 billion in assets; 77,000 members) to deploy both its digital banking platform and its Q2 Innovation Studio. Q2 also recently announced core processing partnerships with b1BANK ($3.9 billion in assets), Citizens Bank of Edmond ($350 million in assets), and fellow Finovate alum Moven.
Financial data network Plaid works with more than 11,000 financial institutions to ensure broad access to the thousands of digital financial services built on its platform. Making its Finovate debut in 2014 as a presenter at FinDEVr SiliconValley where the company demonstrated its “API for Financial Infrastructure,” Plaid has become synonymous with the movement to democratize digital finance. The company secured a Series D extension – amount undisclosed – from American Express and JP Morgan in August and, later that month, announced a new partnership with advanced bank-to-bank transfer solutions company Astra. Earlier this month, Plaid announced a collaboration with Silicon Valley Bank to make the institution the first to offer ACH account token integration with its technology.
“With Silicon Valley Bank,” Plaid Head of Revenue and Partnerships Paul Williamson said when the partnership was announced, “thousands of fintech innovators now have access to an integrated payment processing solution that combines the power of SVB and Plaid to deliver seamless, convenient digital finance experiences.”
Plaid was founded in 2013 by William Hockey and Zachary Perret (CEO). The company achieved unicorn status in 2018 after securing a $250 million Series C investment that gave the San Francisco, California-based firm a valuation of $2.65 billion.
In a round led by Valar Ventures, Neo Financial, a fintech based in Alberta, Calgary and Manitoba, Winnipeg, has raised $50 million ($64 million CAD) in new equity funding. The fresh capital takes the Canadian company’s total funding to $89 million ($114 million CAD), and will help enable the company to add talent and launch new integrated fintech partnerships with retailers.
“Reimagining the way Canadians bank is no easy feat, but it’s a challenge that our team is taking head on,” Neo co-founder and CEO Andrew Chau said. “This raise is validation of not only the problem Neo is tackling, but (also) our team’s ability to solve it.”
Going live last year, Neo offered a high-interest savings account, and a no-fee Mastercard that offers up to 6% cash back at partnering companies and at least 1% cashback across all other spending, called Neo Card. Since its 2020 launch Neo has inked partnerships with more than 4,000 retailers, including a strategic partnership with Hudson’s Bay to power the company’s new Hudson’s Bay Mastercard offering. Today’s funding announcement comes on the heels of Neo’s purchase of office space in Winnipeg’s Exchange District, enabling the company to open a second headquarters in the city.
Joining today’s Series B were new investors Greenoaks Capital – which has backed fintechs and ecommerce innovators like Robinhood and Stripe – as well as South Korean challenger bank Toss, a unicorn valued at more than $7.3 billion ($9.4 billion CAD). Other investors included Breyer Capital, Golden Ventures, Afore Capitaal, Inovia Capital, Thornvest, and Maple VC. In addition to leading Neo’s Series B round, announced today, Valar Ventures also led the company’s previous round of funding – a $19.5 million (CAD $25 million) Series A round – in December 2020.
“As one of the largest Series B raises for a Canadian fintech, this new round of funding will allow us to continue building innovative products and features for all Canadians and businesses,” Chau said. “It’s an exciting time to grow our team from both our Calgary and Winnipeg offices.”
Neo Financial was founded by two of the co-founders of SkipTheDishes, an online restaurant food delivery firm launched in 2012. SkipTheDishes was acquired by JustEast four years later for $200 million.
