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Burgeoning Fintech Trends in Asia

Burgeoning Fintech Trends in Asia
By Julie Muhn (@julieschicktanz) Posted on
Categories: FinovateAsia 2021

When it comes to trends, Asia has always been ahead of the rest of the world. Because of this, it’s worth paying attention to the fintech themes that will be popping up at FinovateAsia.

Taking place digitally June 22 and 23, FinovateAsia will highlight discussions featuring the latest thought leaders in the industry. Tickets are still available; book before June 4 to receive a discount.

Here is a highlight of some of the topics you can expect to see throughout the two day event:

Embedded finance

After last year’s transition to digital, embedded finance has more potential than ever. During the panel titled Embedded Finance and the Future of Finance, our experts will address how to harness the power of data and digitization to build new models of finance across verticals and how to empower customers through better offerings. The group will share new models for meeting customer needs, and discuss how incumbent firms fit into the new picture.

The customer experience obsession

Asia is known for its hyper-focus on the customer experience. What are some of the lessons firms can learn from super apps like Alipay that delight customers? Our customer experience panel will discuss changing customer demands in line with the current climate, as well as address how to build successful partnerships and distribution channels with customers in mind.

Empowering ESG

ESG is one of the hottest topics in fintech this year, and it’s no longer limited to investing. The ESG panel at FinovateAsia, titled Leveraging Emerging Technologies to Meet ESG Goals, will assess the activities that can be done around ESG, look at how banks can make ESG a commercially viable product and scale up ESG initiatives, examine how regulators are approaching sustainability, and discuss how sustainability goals are encouraging new ways of partnering.

Cross-border payments and real-time payments

When it comes to cross-border payments, the future is real-time and global. FinovateAsia’s panel titled Integration between cross-border payments systems – The evolution of RTP across Asia will look at what the industry needs to do to support the regulatory agenda and at the additional services and value banks can offer. The team of experts will consider current progress with the interoperability of RTP systems and what the industry needs to do to overcome obstacles.

Partnerships

If there’s one thing we’ve learned in the fintech industry over the past few years, it’s that partnerships are key for survival. In a panel titled, Overcoming challenges and fostering successful partnerships across new ecosystems, we’ll host a range of bank executives as they share expert advice on how banks can best cooperate with startups, make the most of their networks, work quickly without sacrificing quality, and develop an entrepreneurial mindset throughout the organization.

Photo by Alexander Schimmeck on Unsplash

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Fintech-as-a-Service Matchmaker Synctera Scores $33 Million in Series A Funding

Fintech-as-a-Service Matchmaker Synctera Scores $33 Million in Series A Funding
By David Penn Posted on
Categories: Daily news, Funding

Synctera has raised $33 million in Series A funding to fuel its mission to make it easier for community banks and fintechs to work together. The round, which brought the company’s total funding to more than $46 million, featured new strategic investors such as Mastercard, as well as executives from Finovate alums like Marqeta, Feedzai, and Socure. These backers were joined by several of Synctera’s existing investors including Lightspeed Venture Partners, Diagram Ventures, Portage Ventures, SciFi Ventures, and Scribble Ventures.

“Since launch, Synctera has formed one of the best teams in the industry,” company CEO and co-founder Peter Hazlehurst said in a statement. “Bringing on a group of investors with deep industry expertise will help us meet rapidly increasing demand in our next stage of growth.”

Synctera helps community banks and fintechs achieve partnership banking at scale. The company’s platform streamlines day-to-day reconciliation, operations, and regulatory compliance for banks, while enabling fintechs to launch their solutions faster and with greater flexibility thanks to its one-stop-shop API. Part of the growing trend toward embedded finance and banking-as-a-service, Synctera will use the new capital to further build its software engineering team to speed the development of its product roadmap, as well as bolster sales and marketing efforts to help grow market share and expand internationally.

As part of the funding announcement, Syncetera also announced that it would endorse the diversity commitment from the Cap Table Coalition by allocating 10% of all funding rounds to traditionally marginalized investors.

“For this next chapter—and to put action behind Synctera’s values—we pledge to reserve 10% of this round and all future rounds to diverse investors, allowing for more representation and collaboration to further innovate the industry,” Hazlehurst said.

Emerging from stealth last year, Synctera has already secured customers in Coastal Community Bank and ONE Finance, as well as Tennessee-based Lineage Bank. The company has also partnered with money management and financial wellness platform for women, Ellevest. Check out our conversation with Hazlehurst on the Finovate Podcast with host Greg Palmer from last month.

Photo by Harrison Haines from Pexels

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All-in-One PFM App Truebill Banks $45 Million in Series D Funding

All-in-One PFM App Truebill Banks $45 Million in Series D Funding
By David Penn Posted on
Categories: Daily news, Funding

Courtesy of an investment round led by Accel Partners, subscription management specialist turned personal finance company Truebill has secured $45 million in new funding. The Series D round – which featured participation from Bessemer Venture Partners, Cota Capital, and Eldridge Industries – takes the six-year old company’s total financing to $85 million.

“With this new capital, we’re transforming Truebill into an all-in-one, holistic platform that makes it easy for members to not only manage subscriptions and spending, but also optimize their savings and make informed decisions to improve their financial health,” company co-founder and CEO Haroon Mokhtarzada said. “More than 10,000 members sign up for Truebill every day seeking to better understand and improve their finances.”

Truebill’s PFM solution offers budgeting and autopilot savings tools, as well as insights into spending and credit scores. The app, available in both iOS and Android, also supports pay advance and bill negotiation, giving users further tools for managing cash flow and controlling costs.

Headquartered in Silver Spring, Maryland after being founded in San Francisco in 2011, Truebill has more than 100 employees and plans to use the new capital to help add to its workforce. The company is looking to bring on new talent in data science, machine learning, engineering, and marketing, as well as in customer service to help support Truebill’s growth.

With two million active users and revenues that have grown 3x since March 2020, Truebill is one of the companies that has been able to leverage the social discontents of the global pandemic into greater business for its services. Despite its expansion into the PFM space, Truebill has benefitted from the emergence of “power subscribers” that have 10+ recurring payments. The company currently profits from a user with an average of 17 subscriptions – down from an average of 21 during the worst of the pandemic last spring – and a monthly subscription bill of $145 a month.

Photo by shravan khare from Pexels

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Mitek Acquires ID R&D

Mitek Acquires ID R&D
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, ID R&D, Mergers & Acquisitions, Mitek

Identity verification and remote deposit capture solutions provider Mitek has acquired AI-powered biometrics company ID R&D this week. Terms of the deal were undisclosed.

Under the agreement, Mitek will integrate ID R&D’s portfolio of biometric technologies into its own identity verification solution. Additionally, ID R&D will continue operating under its own brand and will still sell its biometrics products directly to the market. The company’s solutions include IDLive Face, a passive facial liveness detection tool; and IDLive Voice, a voice anti-spoofing technology.

By integrating ID R&D’s technology into its own, Mitek will offer consumers and businesses a more holistic identity verification and fraud prevention product that protects a transaction from start to finish. The new solution will offer banks and other organizations with a single authentication tool that offers a simple approach to fighting fraud throughout each step of a transaction.

“With additional resources now available to the ID R&D team, we expect to bring exciting breakthroughs to the market at an even faster pace,” said ID R&D President Alexey Khitrov in a blog post. “Mitek’s financial strength, global reach, and scale will only enhance our ability to expand our core biometric product portfolio.”

ID R&D was founded in 2016 and is headquartered in New York City. The company has raised a total of $5.7 million across two rounds of funding, the most recent investment taking place in May of 2019.

Founded in 1986, Mitek went public in 2011 and now trades on the Nasdaq under the ticker MITK. The company has a market capitalization of $739 million.

The increase in consumers going digital has been beneficial to Mitek. Last year, Mitek saw a year-over-year growth increase of 20%. This growth is likely to increase. In fact, Juniper Research estimates that by 2025, 1.4 billion consumers will be using facial recognition to facilitate secure transactions.

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How Collaboration and Partnership Power Fintech Innovation: Our Interview with FISPAN’s Andrea Zand

How Collaboration and Partnership Power Fintech Innovation: Our Interview with FISPAN’s Andrea Zand
By David Penn Posted on
Categories: Alumni profile, FI.SPAN, Interview, Women in Fintech

How are banks and fintechs leveraging the lessons learned during the global health crisis to provide consumers and businesses with financial products that do an even better job than before of addressing their needs? And when it comes to innovation in technology and financial services, is disruption or collaboration dictating the pace of change?

To talk about these and other issues, we caught up with Andrea Zand, co-founder and Chief Operating Officer of FISPAN. Headquartered in Vancouver, British Columbia, Canada, FISPAN made its Finovate debut in 2017, demonstrating its cloud-based platform that leverages APIs to enable banks to deliver new business banking solutions to their corporate customers.

How are the banks you work with doing now – a little over one year after the onset of the pandemic?

Andrea Zand: Open-banking infrastructure and data sharing are helping banks and governments around the world better respond to the recovery post-pandemic. We are starting to see evidence that governments are beginning to use open banking data to help inform their pandemic responses and help small businesses. The banks we work with are feeling positive about the recovery going into 2021.

In what ways should banks expect customer behavior to change and how should they respond?

Zand: We’ve already seen that the pandemic has sped up innovation in financial services. Customers are getting more and more comfortable doing their personal banking online, and business banking customers are also turning to digital banking platforms as an alternative to in-person branch visits. Banks are struggling to keep up with this rapid shift in the types of online service offerings their clients are demanding. 

Because of this, banks are looking to deploy innovations that will have an immediate impact on the client experience. This is where we see a huge opportunity with embedded banking. By embedding the banking experience inside the platforms that business customers use to run their businesses (such as ERPs or accounting software), banks are able to easily provide their business clients with a more automated and streamlined treasury management process. The banks that are ahead of the curve and partnering with fintechs like us are beginning to better understand how their customers use their products in context, allowing them to innovate smarter and faster.

Technology has moved too fast for the banks to build those capabilities themselves. The best way for B2B banks to manage the impact of rapidly evolving customer expectations is to partner with agile, innovative fintech services.

Connecting with their clients as much as possible and understanding their needs will be essential in driving the agenda for the new capabilities the banks should be focusing on. Leveraging tech and automation will manage and rise to customer expectations while still allowing for more face time during this transition period to explore and understand customers’ needs and wants.

What are some of the other challenges that banks will encounter as the recovery picks up steam – and how will FISPAN help them?

Zand: Banks will continue to be challenged by continually changing customer expectations. They will also be challenged by the need to adapt to an open exchange of data that will happen as a result of the many new fintech upstarts that are creating new business models and finding ways to better meet these changing client demands.

FISPAN helps by collaborating with FIs to understand what will make their customers happier by joining forces across all levels of the product discovery and implementation phases. Getting in front of the customers and understanding their day-to-day ERP and accounting struggles is a large part of how we meet and overcome the challenges that have risen due to the digital shift during our global pandemic. More specifically, we enable banks to extend their service offering to their business clients by embedding commercial banking applications within the organization’s ERP or accounting software.

For those institutions that engaged in digital transformations, how do they make sure those efforts truly pay off?

Zand: Continue to be open to new ways of thinking and working with new partners. In partnering, serving, or investing in innovation by way of technology upstarts, financial institutions are able to position themselves for future growth and adaptation through real-time, easy access to products, services, data, and channels. Delivering a product or service that truly resonates with their customers and meets them where they are with the current challenges they face in a rapidly growing digital market.

What does collaboration between banks and fintechs look like in a post-COVID world?

Zand: Collaboration between banks, fintech, and other providers is becoming more important as the payments landscape is becoming more complex. Banks that are open to partnering have a competitive advantage because they can provide better services at scale. Not to mention that some banks are at risk of getting disintermediated by nonbank providers for some of these types of solutions. The time that bank partners spend helping integrate their banking services into different platforms is markedly less than the time it would take for the bank to develop it themselves. That same time investment from the bank also leads to countless saved hours for their business clients, increasing their value as a business bank.

What has been your biggest professional takeaway from 2020?

Zand: If 2020 taught me anything, it was to always remain flexible and open-minded. One of the big plans we had was to go to some in-person events and start to talk face to face with end-users and really understand what kinds of pain points they were experiencing with their treasury management process. All of our events were either canceled or transferred to digital. We were still able to get the information we needed from customer interviews and case studies, but it just goes to show that sometimes your best-laid plans aren’t going to be in the cards and you need to pivot quickly.

What are you looking forward to most in 2021? Where do you see the greatest opportunities?

Zand: Besides being able to see our bank clients and end-users face to face, in 2021 I am looking forward to watching banks, payments providers, and fintech companies launching services and solutions that can help small businesses across the country emerge from 2020. I think the greatest opportunity for economic recovery and success post-pandemic lies in banks being better able to serve their small business clients.

Photo by Nacho Juárez from Pexels

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MotoRefi Receives $45 Million for Auto Refinancing Platform

MotoRefi Receives $45 Million for Auto Refinancing Platform
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Funding

Vehicle refinance startup MotoRefi pulled in a $45 million Series B round of funding this week. The Virginia-based company received the funds from investors including Goldman Sachs, which led the round, along with IA Capital, Moderne Ventures, Accomplice, Link Ventures, Motley Fool Ventures and CMFG Ventures.

“In 2020, we proved we are the go-to platform for auto refinance. In 2021, we’re scaling that offering to make auto refinance accessible to everyone- helping more people save money on their car payments,” said MotoRefi CEO Kevin Bennett. “Goldman is the best in the business when it comes to financial services, and we’re thrilled to partner with Jade Mandell and the Goldman Sachs team on our next phase of growth.”

MotoRefi will use the investment to boost growth by investing in its platform and build out its team.

The funds come just months after the company raised a $10 million Series A round in January. MotoRefi’s funding now totals $60 million.

Today’s news also comes during a time of major growth for MotoRefi. The company, which works directly with lenders to help them facilitate refinances on auto loans, has seen an increase in demand during the low interest rate environment. From the first quarter of 2020 to the first quarter of this year, MotoRefi has seen:

  • 7x revenue growth
  • 5x loan volume growth
  • 2.5x team growth

Founded in 2016, MotoRefi has been in the fintech headlines a handful of times this year, having recently announced senior hires, a new headquarters location, and a new partnership with SoFi.

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Three Strategies for Transitioning Customers to Digital Bill Payments

Three Strategies for Transitioning Customers to Digital Bill Payments
By Julie Muhn (@julieschicktanz) Posted on
Categories: Guest Post

This is a guest post by John Minor, SVP of Product and Support at PayNearMe.

Pay by check? Yes, that’s still a thing. In fact, nearly a quarter of consumers (22%) pay their monthly utility bill and 9% make monthly mortgage payments by mailing a check or money order to the biller, according to a recent bill payment study by PayNearMe.

Traditional, non-digital forms of bill payment can be expensive. The labor cost to have employees available to accept cash or check payments and then manually count, sort, reconcile, and deposit these payments throughout the day is reason enough for businesses to encourage customers to adopt digital bill payments.

However, eliminating these familiar payment types and transitioning customers to electronic payments can be challenging. Here are three strategies to try:

Put electronic bill pay options front and center

At every opportunity, put digital pay options in front of your customers — on billing statements, through customer service representatives, via emails, on your website, and through push notifications.

For example, savvy billers are now generating personalized QR codes for customers that can be printed on paper billing statements. Customers then can pay their bill by scanning the code and choosing their preferred method of payment without having to log into their account. It’s frictionless, fast, and encourages your customers to pay their bills electronically.

Offer mobile payments

Mobile payments are nearly ubiquitous. The majority of Americans (74%) use their phone to order and pay for food and merchandise at least once a week, and nearly 1 in 3 Americans (29%) would like to pay with their smartphones all the time.

This same consumer behavior translates to the way they expect to pay their bills. In fact, according to this bill payment study, Americans are likely to pay their bills using one of the following forms of mobile payment, if they have the option:

  • 26% — likely to pay bills via text message on their mobile phone
  • 32% — likely to pay bills by scanning a QR code on their bill and paying using their mobile phone
  • 37% — likely to pay bills using their mobile wallet (Apple Pay / Google Pay)

The data is clear: your customers want to pay with their mobile devices. To accommodate them, look for a payment platform that enables your business to accept multiple forms of payment, including Apple Pay and Google Pay.

Enlist your customer service staff

Every time traditional bill payers pick up the phone to make a payment or drop by the office to pay in person, the customer service agent has an opportunity to promote digital bill payment options. The agent can ask questions like:

  • “Have you considered paying your loan through our electronic payment system? Let me tell you why it is such a convenient option!”
  • “Can I email or text you a link so you can enter your payment information directly?”
  • “Would you like me to assist you in signing up for autopay to make your monthly payment easier?”

These one-on-one conversations can help get customers over the initial learning curve and help those who are hesitant feel more confident in making the switch from traditional to digital payments.

The majority of consumers (69%) prefer digital payment channels to paying bills by mail, phone, or in-person. But, getting set up on electronic payments has to be easy. Your customers don’t want to deal with lengthy forms, frustrating sign up processes, or having to provide payment details every month. Instead, use techniques like embedding personalized payment links or QR codes in billing statements and reminder messages so your customers can simply click a link or scan a code to go directly to their payment screen.

Transitioning your customers to digital bill payment will save your company time and money while affording your customers greater freedom and flexibility. It’s worth the effort.

John Minor is SVP of Product and Support for PayNearMe, leading the product, merchant services and support teams. By combining industry research with client and partner feedback, he ensures that PayNearMe’s solutions continue to lead the market in terms of mobile readiness, ease of use, and advanced bill pay and collection techniques.

Photo by LinkedIn Sales Solutions on Unsplash

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Will Mobile Money Platform OPay Become Africa’s Next Unicorn?

Will Mobile Money Platform OPay Become Africa’s Next Unicorn?
By David Penn Posted on
Categories: Finovate Global, Modularbank, ThetaRay

“China-backed and Africa-focused” is a way to describe much of the investment that has poured into sub-Saharan Africa in recent years. This week’s news that African-based fintech platform OPay is in the process of raising $400 million in new funding – giving the firm a valuation of $1.5 billion – is the latest example of this trend.

OPay is a mobile money platform launched in Nigeria by popular internet search engine Opera back in 2018. The funding report, which was published in The Information, noted that the capital would be used to fuel the company’s geographic expansion, having gone live in Egypt earlier this year. With Chinese investors maintaining a majority stake in the company, OPay had raised more than $170 million to date from investors including Sequoia Capital, IDG Capital, Source Code, GSR Ventures, Meituan-Dianping, and parent company Opera.

The company said that it processed $1.4 billion in payments in October alone, a sum that increased to $2 billion by December. Much of this can likely be attributed to COVID-19. In a country where cash is still king, the onset of the global pandemic made in-person, cash-based transactions problematic. Digital payment options like those provided by OPay have soared in popularity; Forbes took a look at the boom in Africa’s mobile money business back in December, noting investments in sub-Saharan payment innovators like Paystack (also of Nigeria) and Chipper Cash, a San Francisco based P2P payments company that serves customers in seven African countries.

That said, OPay is looking to leverage its pedigree as a payments solution to offer additional products including debit and credit cards. Earlier this month, OPay launched its USSD withdrawal service to make it easier for Nigerians to access cash at OPay merchant stores – without needing a debit card. Also this month, the company introduced version 4.0 of its super app. OPay 4.0 now makes it easier for users to connect with friends and family, add contacts, make quick payments for frequently used services, and more.

Interestingly, OPay is the most successful of the ventures Opera has tried to spin off. These efforts include ORide, a bicycle-sharing service that was shut down after the Nigerian government banned the business; a similarly shuttered bus-booking solution, OBus; a logistics delivery service OExpress; a B2B e-commerce platform OTrade; and a food delivery service called OFood.

Here is our look at fintech innovation around the world.

Central and Eastern Europe

Middle East and Northern Africa

Central and Southern Asia

Latin America and the Caribbean

Asia-Pacific

Sub-Saharan Africa

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Stavvy Secures New Investment to Simplify and Digitize the Mortgage Process

Stavvy Secures New Investment to Simplify and Digitize the Mortgage Process
By David Penn Posted on
Categories: Daily news, Funding

Stavvy, a company that is digitizing the mortgage closing process, announced a $40+ million Series A round this week led by Morningside Technology Ventures. The Boston-based proptech startup, founded in 2019, will use the additional capital to add talent and accelerate growth in its banking and lending solutions which have seen an increase in demand as a result of the COVID-19 crisis.

“When we launched Stavvy in late 2019, we had no idea what was in store for the world in 2020,” Stavvy co-founder Josh Feinblum said. “We’re proud of the technology we’ve developed to help homeowners and buyers in this challenging time, and grateful for this opportunity to amplify our services and impact.”

Dubbed the largest Series A funding for a New England-based fintech to date, the investment was accompanied by an announcement that Stavvy had forged an alliance with Flagstar Bank, the sixth largest bank mortgage originator in the country. The partnership will enable the bank to offer remote loan modification services and help homeowners who are in need of relief in the waning days of the pandemic.

“Thanks to Stavvy, we can process more requests to help customers more quickly, reduce errors in the signature process, and even better, walk homeowners through their loss mitigation closing during this difficult time,” Flagstar CIO of Servicing Ken Creech said.

Named to HousingWire’s 2021 Tech100 Mortgage Winners roster, Stavvy leverages e-signatures and video conferencing to “bring real estate lending and servicing into the 21st century” in the words of company co-founder Kosta Ligris. Along with its remote notary capacity, Stavvy’s eClosing functionality makes it easier for businesses to safely conduct complicated, location-agnostic, legal and financial transactions.

This spring, Stavvy earned status as a MISMO Certified Remote Online Notarization Provider. The company began the year integrating with ICE Mortgage Technology’s Encompass Digital Lending Platform.

Photo by Jayden Burdick from Pexels

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The Emergence of Childhood Investing Apps

The Emergence of Childhood Investing Apps
By Julie Muhn (@julieschicktanz) Posted on
Categories: Speaker series

Providing services for Generation Z is increasingly on the minds of both banks and fintechs alike.

One such fintech, EarlyBird, is making it easy for a child’s community to invest in their future. We spoke with the company’s CEO Jordan Wexler on the current childhood investing environment and what it takes to compete.

Talk to us about the current state of financial literacy in the U.S.

Jordan Wexler: The numbers tell us that most American families aren’t doing a great job at teaching financial literacy. According to a recent survey, 19% of Americans reported that their household spent more than their income over the past year. Add in the fact that 43% of adults say they haven’t got a rainy day fund, and that means huge chunks of our society simply aren’t prepared to face financial hurdles. This shows that good financial habits and knowledge aren’t being effectively passed down either.

Research suggests there isn’t much time to sow the seeds of financial literacy into a kid’s headspace. Children generally have their financial habits set by the age of seven. That means to set kids up for financial independence, they have to be taught the basics of financial literacy sooner rather than later. Not only will you instill good habits early, but you’ll also be setting them up to make smart investment and financial choices throughout their lives.

Most wealthtech tools target high net worth individuals. What benefits are there to having a young client base that typically has no income?

Wexler: The benefit of helping the youth is that we’re trying to set them up for financial success in the future. We aren’t encouraging spending – we’re instilling good financial habits early on that will help kids flourish in their adult lives.

With EarlyBird, our vision is to have parents start investing in their children from day one. That way, in 18 years, they will have a solid financial foundation for their child to give them the freedom to pursue their aspirations – traveling the world, going to college, starting a business, whatever it may be.

EarlyBird was built for more than the children with their name on the custodial account. It’s for parents, family, and friends that want to give meaningful and purposeful gifts to the children in their lives to help support them financially. We’re making it accessible to all because it doesn’t matter which household income bracket a family falls under, investing just a little bit each month for your child can go a long way.

What elements do you use to cater EarlyBird to such a young audience?

Wexler: We’re catering EarlyBird to parents, their children, and also the community around them that wants to see them succeed. For parents, we’ve simplified the process to kickstart their child’s future by opening a custodial investment account. It doesn’t matter if the parent is a beginner, novice, or expert in investing in the stock market, we’re allowing families to gift meaningful and sustainable financial contributions for all life’s milestones.

For children, we’re creating a platform that allows them to learn about finances. They can better understand investing/saving, watch their money grow, and then one day have a bank account with accumulated funds to use as they please. Our hope is that from being a lifelong EarlyBird user, they’ll know how to manage those assets responsibly.

We’ve also created a great user experience for the ‘givers.’ They are able to record a video memory with their contribution and can use it as an opportunity to pass down stories and knowledge from the world of money. Video memories are placed into an archive on the EarlyBird app for the children to look back on and learn from forever.

EarlyBird was founded in 2019. How have you seen the childhood financial services space grow since then?

Wexler: Being in the weeds in the childhood financial services space, it’s apparent that there’s been massive growth and that it’s on an upward trajectory, especially with latest funding news from services like Greenlight, Current, Step, and Till Financial.

One thing we are noticing right now is that “kids” and “children” are being somewhat generalized into one category of fintech. The reality is – there are different offerings in the space that make sense for different ages and parental comfort levels. I feel that we’re at the point where parents need to start to consider their “ideal mix” when it comes to the fintech tools and apps they use to save for their children, teach them financial literacy, and also get them started with spending when it’s time.

For example, parents can get started with EarlyBird when their child is born and then later on incorporate an app with teen-focused debit card to begin digital banking. This is similar to the “old school” trajectory of starting off with a 529 account then adding a standard savings account and later a checking account.

It’s great to see so much growth, innovation, and potential happening in childhood financial services. We’re beyond excited to be a part of this movement and to set the next generation up for financial freedom!

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Acorns Makes Public Debut via SPAC

Acorns Makes Public Debut via SPAC
By Julie Muhn (@julieschicktanz) Posted on
Categories: Daily news, Mergers & Acquisitions, SPAC

Millennial investing app Acorns announced plans today to go public using a merger with a special purpose acquisition company (SPAC).

The SPAC, Pioneer Merger Corp, is a blank check company founded in 2020 that aims to acquire Acorns in a deal valuing the fintech at $2.2 billion. The transaction is expected to complete in the second half of this year. Once finalized, Acorns will trade on the Nasdaq under the ticker OAKS.

Acorns’ new valuation of over $2 billion is more than double its last valuation. The company was estimated to be worth $860 million in January of 2019.

Prior to today’s announcement, Acorns was in the middle of another funding round, which would have added to the $207 million it had already raised since it was founded in 2014. Instead of closing another round of funding in the private markets, Acorns CEO Noah Kerner chose the SPAC route because he felt that Pioneer Merger Chairman John Christodoro was the right partner.

“Now was the time to go public to accelerate our growth and get the tools of responsible wealth-making in everyone’s hands as fast as possible, when they need it most,” Kerner told CNBC. “We just saw this as an accelerant on that journey.”

The timing is also right from a demand perspective. The pandemic, combined with media frenzy around meme stocks, fueled interest from new investors. Acorns clearly benefitted from this, having just completed its best quarter on record. The company doubled its number of subscribers compared to the fourth quarter of 2020 and now counts four million users.

Acorns has long been known for helping its millennial client base invest the “spare change” from their card purchases into index funds. The company has since expanded and now offers a debit card offering and more robust banking services such as mobile remote deposit check capture, direct deposit, check sending tools, and automated IRA investing for retirement.

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Flywire Begins Trading on NASDAQ

Flywire Begins Trading on NASDAQ
By Julie Muhn (@julieschicktanz) Posted on
Categories: Alumni News, Daily news, Flywire, IPO

Global payments platform Flywire began trading on the Nasdaq today under the ticker FLYW.

The Boston, Massachusetts-based company is offering 10,440,000 shares of its stock at $24 per share and expects to raise about $300 million with a market capitalization of $3 billion. These figures are at the top range of what Flywire originally expected; last week the company announced it planned to offer 8.7 million shares priced between $22 and $24 a share.

The Flywire team gathered at the exchange in person this morning for the IPO. The reunion was especially notable since this was the first time in 15 months that team members have seen each other in person due to COVID lockdowns.

Flywire originally launched as peerTransfer in 2009, when it focused on streamlining international payments to save schools and international students money on tuition and fees. The company rebranded to Flywire in 2011 and expanded from education to facilitate international payments in healthcare, travel, and select B2B payments. Flywire now counts 2,250 customers.

Differentiating itself from competitors, Flywire focuses on high stakes, high value transactions. That’s because once transactions exceed $10,000, the funds are subject to a different set of regulations and must be exchanged using a purpose-built network– that’s where Flywire comes in.

“We’re just getting started,” Flywire CEO Mike Massaro told CNBC in an interview. “We see this business as a cornerstone of how money moves within the industries that we serve. If you look at the four industries we’re in now it’s $12 trillion of opportunity. There’s so much room to grow here. We’ve got clients in 30 countries already… I see us going into more industries. I see us going into more countries, and really just try and digitize more payments for our clients.”

In addition to its Boston headquarters, the company has offices in Chicago, London, Manchester, Valencia, Shanghai, Singapore, Tokyo, Cluj, and Sydney. Prior to going public, Flywire had raised $323 million.

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