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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Subscription management startup Subaio landed $5.9 million (€4 million) this week. The investment comes from newly established venture firm, Global PayTech Ventures, which ex-Mastercard President Javier Perez launched after stepping down from Mastercard at the start of this year.
Founded in 2016, Subaio has received two previous funding rounds. The first came from Nordea in 2018 and the second was from startup accelerator Plug and Play last year. Both rounds were undisclosed.
“There is a massive market demand within the payments ecosystem and the team has deep technical expertise and a great product that solves a problem for banks and consumers alike,” said Perez. “That is why they have a European market leading position within the subscription management space, and we will invest both capital, our payment expertise and network of global contacts to realize the company’s full potential.”
Subaio’s value proposition fits well into today’s economy, where the average consumer has between eight and 11 subscriptions. That’s because Subaio enables banks to help their consumers view, manage, and cancel their subscriptions with one easy-to-use interface.
Eight bank clients, including Nordea, ABN AMRO, and Lunar, are currently leveraging Subaio’s subscription management technology.
Subaio CEO and Co-founder, Thomas Laursen, sees today’s funding as a vote of confidence for the technology. “The fintech sector is flush with funding,” said Laursen. “Thus, raising capital is not about how much you raise, but who you raise it from. It was imperative for us to receive a smart money investment that can propel us to the next level. Partnering up with a capacity such as Javier Perez and his team at GPT with their unique insight into the paytech industry is about getting knowledge and network into our company.”
Zelf, a messenger-based challenger bank based in Latvia and focused on Generation Z customers, announced earlier this week that it has secured $2 million in pre-seed funding. The round was led by Austrian venture capital firm 3VC, and featured participation by Seed X, Hard Yaka, Goldfinger, and angel investor Chris Adelsbach.
The company, founded by CEO Elliot Goykhman, will use the capital to fuel growth and expansion throughout Europe, particularly in Spain, Germany, Poland, and Italy. Zelf also sees the funding as an opportunity to establish itself in the U.K. and the U.S., as well. Most recently, the company launched operations in France and said it has 13,000 people currently using its Zelf Cards there.
“We started building ZELF in 2018 with a vision of a cashless and contactless society of the future,” the Zelf Team noted on its blog in a look back at 2020. “and the shockwave of COVID-19 in 2020 proved that it was the right path not only businesswise, but also sadly healthwise.”
Zelf accountholders get a digital Mastercard and an IBAN account which can be used to send and receive money on instant messaging apps like Facebook Messenger, WhatsApp, Telegram, and Viber. Zelf also features an AI-powered voice interface that can be used to perform basic PFM functions like requesting money, sending invoices, and checking account balances.
“We are confident that our business model of eliminating cumbersome banking apps, as well as physical plastic cards, will prove to be the winning strategy,” Goykhman said.
This week’s Finovate Global Lists takes a look at the fintech industry in the Philippines. IBS Intelligence recently leveraged the Startup Genome’s Global Startup Ecosystem Report to analyze the adoption of digital financial services in the country and pick five companies to keep an eye on this year.
The Philippines, as the article noted, is an interesting case study insofar as the country’s capital of Manila has signficant English-speaking population and what IBS Intelligence called “a more western inclined culture” that is a “natural fit for the growth of fintech.”
Compared to larger neighbor Indonesia and smaller neighbor Malaysia, the Philippines is younger and has a faster growing population. The Philippines also has a marginally higher literacy rate, as well as higher real GDP growth and greater per capita mobile phone penetration (based on subscriptions).
Looking specifically at the country’s fintech industry, Startup Genome noted that fintechs comprise 15% of the startups in Manila, the Philippine capital. The report gave the country’s fintech market a transaction value of $10 billion in 2019 and anticipated a growth of 24% in 2020. Among the fintechs highlighted in the report are digital wallet and exchange Coins.ph (recently acquired by Indonesia mobility company Go-Jek for $72 million) and online financing platform for SMEs, First Circle.
In an economy that is taking place increasingly online, the recent boost in fraud has left many banks, fintechs, and retailers underprepared in the fight against bad actors.
In a recent conversation, I spoke with Neustar Senior VP Robert McKay, who offered his perspective on the increase in fraud, the use of device reputation tracking, and steps firms can take to minimize their shortcomings.
Catch us up on the current security landscape in fintech and banking
Robert McKay: The pandemic has forced almost all customer interactions with institutions to digital channels. While it offers a new level of convenience for customers, it has exacerbated an existing problem in these types of interactions – increasing ambiguity for seeking secure, trusted connections across anonymous interactions. Institutions and fintechs that deal with highly sensitive customer information have long struggled to properly authenticate the identities of consumers across these digital channels, and fraudsters have developed savvy methods to skirt some of the most prominent forms of identity authentication.
Trust is at the center of successful fraud mitigation. If you can trust, with a high enough level of confidence, that the person on other end of the device is who they claim to be, then financial institutions and fintechs can reduce friction and improve the experience for legitimate customers while limiting additional verification and fraud-fighting resources to suspicious interactions.
2020 disrupted every subsector of fintech. Talk to us about how it changed the online security realm.
McKay: McKinsey cited that the pre-COVID consumer adoption rates for performing balance inquiries and transactions in the digital channels in the U.S. was at 50% while adoption for more complex activities like new account openings or credit card applications was around 36%. Many institutions and fintechs had to quickly address this as consumer activity shifts boomed across digital channels in a ‘survive-or-die’ approach. The combination of branch closures and an under-preparedness for these digital shifts resulted in spikes in call volumes and wait times, for example.
This disruption also shown a light on the robustness of institution’s authentication processes. Throughout 2020, a commonly used method for mitigating fraud was device behavior analysis using device reputation tracking, which determines whether a device has been linked to fraud in the past. Today, fraudsters can easily bypass this method by constantly rotating out devices they use to commit fraud.
Fintechs and their business customers need to take a more comprehensive approach to consumer authentication, exploring who is behind the device rather than focusing exclusively on the device itself.
Discuss what device reputation tracking is and why it is no longer an acceptable form of fraud prevention.
McKay: Device reputation tracking is a method of fraud mitigation that gathers device fingerprints — a series of device characteristics – and assembles a view of that device’s previous association with fraudulent activity. It’s a simple, yet effective, method to catch basic forms of fraud. However, sophisticated fraudsters know this approach relies on backward-looking data, and avoid it by using multiple ‘burner’ devices to commit fraud. Once they complete their interaction, they’ll abandon that device and use a new device to continue their scam. New devices present a big question mark to device reputation solutions since, without past user data, it cannot indicate whether the new device can be trusted.
Additionally, knowing a device is connected to normal or safe behaviors is also not a failsafe solution. It only takes one time for a device to fall into the wrong hands to open the door to fraud.
What is the easiest way for a firm currently using device reputation tracking or fingerprinting to adapt to a more secure fraud prevention technique?
McKay: To adapt, firms should consider a device-based identity resolution technique that connects the device to what is known about a consumer with persistence, and then observe how this online/offline identity graph is honed through continued observations of digital interactions. These online/offline identity graphs should also draw upon historical behavioral data and device fingerprints as just one source element of a multilayered fraud-prevention approach.
Device-based identity resolution determines not only whether a device has been linked to unsafe behaviors in the past, but also whether the device is likely in the hands of the individual who owns it. Hundreds of signals in an array of combinations provide a clear direction to either proceed with the transaction or seek additional verification from the fraud team.
A robust, layered approach like this incorporates data that cannot be hacked and stops fraud in its tracks.
The digital identity conversation is hotter than ever. What are some new developments in this space that we should be paying attention to?
McKay: Consumers, especially digital natives, have developed high expectations for a frictionless customer experience. When considering fraud-mitigation tools, it is critical to remember that most consumers are not fraudsters. If businesses treat all customers as such, it will increase friction and drive good customers away. To provide a smooth customer experience while simultaneously reducing the risk of fraud, businesses need authoritative identity signals that enable them to accurately evaluate the degree of trust in digital interactions.
As fintechs look to accommodate an increasingly remote customer interaction model, it is even more essential to ensure the person on the other end of the interaction is who they claim to be.
What is the number one way you see financial firms fail in terms of security?
McKay: Firms often scrutinize and treat every interaction as possible fraud. This not only impedes the customer experience, but also spreads already thin fraud resources even thinner, leaving the business scrambling and that much more vulnerable to fraud.
Further impeding sound security and efficient fraud mitigation, many firms fail to make the connections across various customer touchpoints (e.g., digital, call center, in-person) and across different business units (e.g., credit card, retail, insurance) to gain the full view of a customer’s identity.
What is the best way for firms to fix this flaw?
McKay: Firms should seek out an identity resolution organization that can help form an identity graph with a singular view of a consumer against every touchpoint, and implement strong and silent authentication measures to automatically authenticate the great majority of interactions that are legitimate. This will allow firms to focus fraud-fighting resources and warranted consumer friction on the minority of interactions that truly represent potential fraud, instead of applying fraud fighting resources against every call center and digital interaction.
Banking technology innovator Backbase and customer service solutions provider Zafinannounced a partnership today.
The two Finovate alums teamed up to offer Backbase clients access to Zafin’s technology. Specifically, Backbase clients can use Zafin to send their end customers highly personalized products and offers with pricing models that are tailored to each recipient.
The personalization element is a key differentiator. In today’s digital-first banking economy, personalization is a crucial element to customer retention and loyalty.
“This new partnership with Zafin offers our clients yet another way to build hyper-personalized experiences for customers while helping to break away from the legacy systems that have historically slowed the pace of innovation, and we’re excited to see our customers benefit,” said Backbase CEO Jouk Pleiter.
Backbase was founded in 2003 and offers solutions for banks to better engage with their customers. Today’s move is a win-win; it not only enhances Backbase’s offerings, but also provides Zafin access to a host of new bank clients.
The Zafin partnership comes after a heavy month of news from Amsterdam-based Backbase. The company began February with an announcement that it was selected by TechCU to overhaul its members’ banking experience, followed by partnership announcements from Banesco Panamá, Basis Bank, an National Bank of Bahrain.
TreeCard offers a wooden Mastercard debit card and an app that enables users to track their spending and split bills. With backing from Mastercard’s network, TreeCard provides a debit account, with support for chip and PIN, as well as contactless and mobile payments. The card also can receive top-up funding from the user’s other bank accounts. Treecard pledges to spend 80% of its profits to financially support reforestation programs.
Additionally, TreeCard noted that the wood of a single tree – sustainably sourced cherry wood, the company disclosed – can produce more than 300,000 cards. So no need to call out the Lorax. These efficiencies and more (TreeCard’s cards use a core consisting of recycled plastic bottles, as well) are designed to ensure that the company is living up to its status as an “impact first business.”
“We wanted to create a financial product with a difference, one that was far removed from greenwashing and allowed customers to improve the impact of their spending without drastically changing their habits,” TreeCard CEO and co-founder Jamie Cox explained. “As a multi-stage fund, EQT Ventures’ presence across both Europe and the US provides the perfect springboard for us to launch into international markets.”
Also participating in this week’s funding were Seedcamp and Episode 1, along with angel investors including Matt Robinson (founder of GoCardless) and Charlie Delingpole (formerly of ComplyAdvantage). TreeCard said that it has a waiting list of more than 140,000 individuals interested in the card. The company is expected to make its wooden debit card available to consumers “in the next few months.”
One of my favorite quotes from the current U.S. president is “Don’t tell me your values; show me your budget.” Swap out “budget” for “brand” and you’ll learn a lot about where the priorities of Wise, the fintech formerly known as TransferWise, currently lay.
“Our customers now need us for more than money transfers,” company CEO Kristo Kaarmann announced on the Wise blog earlier this week. In the beginning, it was sending money that was “too expensive, slow, and inconvenient,” he noted. Now, he believes that banking services suffer from many of the same problems that money transfers once did and, further, sees his rebranded company as being in an ideal position to do something about it.
Color us convinced. But for the doubters, here are the three, pretty good reasons why the Wise rebrand makes great sense.
First reason: Banking is Beautiful … and Broad
Wise sees itself as a “community of people and businesses with multi-currency lives.” This image, and the company’s origins as a cross-border money transfer innovator, sync well with our bank-in-your-pocket / work-from-anywhere / market-at-your-fingertips world.
In addition to its cross-border money transfer business, Wise offers a multi-currency account that enables users to hold more than 55 different currencies and receive payments in ten. The company also has issued more than one million of its debit cards. In fact, Wise announced a partnership with Visa last month to expand its debit card offering to the Asia Pacific, Europe, MENA, U.K., and U.S. markets.
And while Wise has not secured a banking license – and expressed no plans to do so – the company was granted a license from the Financial Conduct Authority last summer to offer investment services to retail customers.
These are the ways, in Kaarman’s words, that Wise is increasingly “replacing international banking for many” of its customers. And it is this combination of infrastructure and culture that Wise is leveraging in its pivot toward banking.
Second reason: Growing Pains
These new offerings underscore the degree to which the company already has outgrown its old name. Like many fintechs, Wise has been, ahem, smart to note that its road to growth will have to extend beyond cross-border payments. Money might make the world go ’round. But moving money around the world, as a business, has its limitations.
In their 2018 report, A Vision for the Future of Cross-Border Payments, McKinsey highlighted a number of trends that are likely to impact this landscape. These include both emergent technologies such as distributed ledger technology, as well as new Big Tech entrants like Alibaba and Amazon, that will offer challenges to banks, service providers, and fintechs in the cross-border space. The rebrand makes it much easier for Wise to re-define itself beyond money transfers at a time when many people are migrating to digital financial technologies in earnest for the first time.
Additionally, as at least one observer noted, “Wise” fits far better on a stock ticker than any truncated version of “TransferWise”. That leads us to our third pretty good reason below.
Third reason: IPO?
Among all the reasons cited by the company in announcing their rebrand, a potential initial public offering, was not among them. This may be for good reason. Sky News reported earlier this year that then-TransferWise had engaged both Goldman Sachs and Morgan Stanley to lead an IPO. The report cites analysts who believe an offering could give the company a valuation of more than $5 billion.
If the rumors are true and an IPO is imminent, then the rebrand is all the more timely – and further comment unlikely. That said, company co-founder, former CEO, and current Chairman Taavet Hinrikus has expressed openness to a public offering in the not-too-distant past.
“In a few years it will be time to think seriously about becoming a public company like the strongest and most trusted financial institutions are,” Hinrikus wrote. “But when we do that we will explore that through our own lens – how will it help our customers? How will it help us achieve our mission faster.”
With more than $6 million transferred around the world every month – saving its 10 million customers more than $1.5 billion every year, why shift the emphasis toward banking? For now, Wise seems content to enjoy the benefits of being bank-adjacent rather than pursue the final step of being a fully-licensed financial institution.
Who needs a SPAC to go public? According to Reuters, cloud-based digital banking technology provider Alkami is looking to enter the public markets the old-fashioned way: with an IPO.
The Reuters report cites sources who requested anonymity, and neither Alkami nor Goldman Sachs – who has been reportedly engaged to lead IPO preparations – have commented on any specific IPO plans Alkami might have. Sources say that an initial public offering could earn the company a valuation of $3 billion and give the state of Texas its next fintech unicorn.
Alkami has raised more than $385 million in funding from investors including D1 Capital Partners, General Atlantic, and MissionOG. The company secured $140 million in its last round in September, and acquired fellow Finovate alumACH Alert a month later.
“Alkami continues to be the go-to partner for FIs wanting to accelerate their digital strategies, plans and results,” company CEO Mike Hansen said when the acquisition was announced. “Together with ACH Alert, we expect to continue to create and deliver winning digital solutions to our clients and their consumer and business digital users.”
Founded as iThryv and making its Finovate debut under that name in 2009, Alkami has grown into a digital banking technology innovator with more than 160 clients, 10+ million users, and $130 million in annually recurring revenue. The company’s platform provides a complete digital banking solution with user onboarding, engagement, and account servicing functionality for both retail and business customers. Users can take advantage of both Alkami’s products as well as third-party services and solutions courtesy of more than 230 integrations.
Named to the 2020 CB Insights Fintech 250 last fall, Alkami recently added a number of women to leadership positions within and around the company. This included inviting financial services veterans Merline Saintil (formerly of Intuit) and Barbara Yastine (formerly of Ally Bank) to join its Board of Directors and hiring former Hewlett Packard Enterprise executive Allison Cerra as Alkami’s new Chief Marketing Officer.
VersaBank is getting in on the digital currency game. The Canada-based bank announced plans to launch VCAD, its own cryptocurrency backed one-to-one by the bank’s Canadian dollar bank deposits.
Key to the launch is a partnership with Stablecorp, a joint venture between crypto asset manager 3iQ and blockchain development company Mavennet. Stablecorp will aid in the commercial launch of VCAD.
VersaBank plans to manage the digital issuance process using VersaVault. The issuance tool is a digital bank vault designed by Versabank subsidiary DRT Cyber to secure digital assets.
“VCAD provides consumers with not only the security afforded by an underlying deposit with a Canadian chartered bank but also the comfort of knowing that each VCAD issued or redeemed will always have one-to-one value with the Canadian dollar,” said Stablecorp CEO Jean Desgagne. “With such clear benefits, we are highly confident in the demand for VCAD as digital currencies increasingly become part of mainstream financial transactions.”
According to CoinTelegraph, VCAD is not the only stablecoin pegged to the Canadian dollar. Other Canadian dollar stablecoins available include Coinsquare’s eCAD and TrustToken’s TrueCAD token.
VersaBank aims to make VCAD publicly available “in the coming months.” In the future, VersaBank and Stablecorp plan to launch VUS and VEuro, which will be U.S. dollar and Euro versions, respectively, of the VersaBank digital currency.
While 2020 made its mark on the financial industry by causing tremendous disruption, 2021 is shaping up to be a year remembered for transformation and adaptation. Companies are hard at work building new digital strategies that will help them to thrive in an increasingly volatile economy.
Fintech developers are taking up the challenge to meet the functionality and performance demands of the financial industry as firms embrace true digital transformation. Their ability to build applications that deliver new features and integrate new capabilities into legacy solutions will be critical for helping firms reshape existing technology infrastructures.
Top 5 Fintech Trends to Watch in 2021
1. Customer-First Solutions
With so many fintech applications to choose from, financial organizations must take the time to consider which solutions are best suited for the needs of their customers. Banks and investment firms once put their own needs at the center of their processes, but in an increasingly competitive marketplace, they have realized that providing a high-quality user experience is paramount to success. They can begin transforming processes by eliminating friction to allow customers to access the services and products they need more quickly.
Fintech developers can help them to eliminate manual processes, reduce external dependencies, and automate common tasks by designing unified digital solutions that address multiple challenges and streamline workflows. By integrating features like document viewing, file conversion, and form data capture into their applications, innovative developers are finding ways to strengthen the connection between firms and their customers.
2. Enhancing Digital Collaboration
In response to the COVID-19 pandemic, much of the financial industry has embraced remote work arrangements for the foreseeable future. The transition has created significant demand for digital tools that can facilitate effective and secure collaboration. Not only must physical documents be converted into digital form, but firms also need ways to make those files available to remote employees without threatening data security or causing version confusion.
Organizations frequently turn to a variety of incompatible software solutions and improvised workarounds to meet their viewing, editing, and document management needs rather than implementing a dedicated, all-in-one solution. Unfortunately, these ad hoc measures create inefficient third-party dependencies, expose data to unnecessary risk, and make human error more likely. Fintech developers can integrate these features into a single application through the use of SDKs and web-based APIs.
3. Managing Big Data
Financial services firms gather massive quantities of data on a regular basis. Although much of that data is unstructured and needs to be filtered through sophisticated algorithms to bring notable trends and risks to the forefront, the industry also collects a great deal of data from structured forms. Structured documents such as loan applications, tax filings, and financial statements all provide valuable data insights that organizations can use to make more informed strategic decisions.
Fintech applications with the ability to extract and process data from structured forms accurately is essential for improving the performance of powerful analytics tools deployed by today’s financial firms. Software integrations can further enhance fintech solutions with image cleanup, document alignment, and form recognition features that make the data collection process more efficient and accurate.
4. Disaster Mitigation
After seeing how the COVID-19 pandemic caused massive disruption to global markets and supply chains, financial organizations are reviewing the way they do business to reduce the impact of similar disasters in the future. One of the key steps in this process will be the rapid transition to paperless workflows and an expansion of electronic data capture capabilities to reduce the reliance upon manual processes.
Solutions that incorporate streamlined document viewing, file conversion capabilities, and data extraction tools will be essential to these “disaster proofing” efforts. By automating previously manual tasks, such as data entry, document assembly, and signature authentication, Fintech solutions can help financial companies protect their business processes from future disruptions.
5. Expanded Partnership Opportunities
Although traditional financial institutions like banks have been skeptical of many fintech solutions, the rapidly-changing market has caused them to reassess their technology in order to reach a new generation of customers. Collaboration between banks and innovative fintech startups was already on the rise before the pandemic reduced longstanding barriers to digital transformation. The challenge they now face is how to integrate their operations and data while also launching innovative services across multiple channels.
Fintech developers can streamline this process by building flexible software applications capable of handling a variety of file formats without the need for any burdensome third-party dependencies. In some cases, that may mean building entirely new solutions, while in others it might call for integrating additional features into firmly entrenched legacy applications. The fintech companies with the ability to get innovative software platforms to market more quickly will be able to make the most of their partnership opportunities.
Building Better FinTech Solutions with Accusoft
Accusoft’s diverse library of SDKs and APIs allows developers to easily integrate robust content processing, conversion, and automation capabilities into their solutions. Whether they’re using PrizmDoc Suite to give their web applications the ability to natively view, edit, and convert documents, extracting data from multiple form types with FormSuite for Structured Forms, or building image cleanup, OCR, and PDF annotation features into their on-prem applications with ImageGear, FinTech companies can trust Accusoft to help them overcome the challenges of 2021 and the years to come.
Multiple benefits arose from last year’s drive to digital, including the increase in user data and more control over the user experience. But making the leap to capturing that data and enhancing control over the user experience is easier said than done.
It is this gap that led Quantum Metric to launch its platform for continuous product design. The product uses realtime data from digital customer interactions to inform the decision-making process. As a result, firms can maximize opportunities, find errors, measure engagements, and more.
Quantum Metric offers tools for a range of industries, including retail banking. Some of the company’s retail banking clients include Western Union, Bank of Montreal, Silicon Valley Bank, and Aspiration.
In the video below, Aspiration Chief Product Officer Jody Mulkey explains how his bank uses Quantum Metric to understand sticking points in its application process and better interpret how clients are using the bank’s tools.
Founded in 2015, Quantum Metric became a unicorn company earlier this year after raising $200 million in a Series B funding round. Because the company aids in the transition to digital, Quantum Metric came close to doubling both its staff and revenue in 2020.
Though there is no official word on a public offering, Quantum Metric appointed a new Chief Revenue Officer, Chief Financial Officer, and Advisory Board Member late last month. The new hires indicate the company may be poising itself for an IPO in the foreseeable future.
Quantum Metric is one of the demoing companies at FinovateEurope 2021, which will take place digitally on March 23 through 25. Register to watch the demo and network with the company during the event. Or, check out a recording of the demo on Finovate.com later this year.
Digital mortgage software provider BeSmartee has secured a strategic growth investment from Boston-based venture and growth stage investment firm M33 Growth. Terms of the deal were not disclosed. In a statement, the company said the capital will help accelerate growth of the Huntington Beach, California-based fintech, as well as power further product innovation.
Calling 2020 a “pivotal year for the mortgage industry,” BeSmartee CEO and co-founder Tim Nguyen underscored the value of a platform like BeSmartee’s in “driv(ing) higher volumes for and ROI to” customers. “We believe that M33’s investment and knowledge will help us to bring our product to more customers and continue to build out our capabilities,” he said.
BeSmartee enables banks, credit unions, and non-bank lenders to deliver a complete digital mortgage experience for their customers. The company offers a white-labeled, mortgage POS that helps lenders go to market faster (zero to POS in 30 days) and better compete with tech-savvy fintechs and marketplace banks. BeSmartee’s technology has been particularly helpful to bank and non-bank lenders alike during the COVID crisis, as lenders have moved “with greater urgency” to embrace digital mortgage options. BeSmartee has referred to this demand for POS platforms as “exponential.”
A Finovate alum since 2017, BeSmartee began this year teaming up with NOVA Home Loans, a Tucson, Arizona-based mortgage banker. Earlier this month, the company announced that it had achieved a 100% customer retention rate in 2020, a 91% customer conversion rate, and growth of 50% in its customer base. “We deepened our integrations with LOS partners, pricing engines, and document providers, along with numerous other integrations to deliver a better experience to our customer base,” BeSmartee Operations Manager Rick Johnston said. “The suite of new tools rapidly increased the rate of loan officer adoption and, in turn, skyrocketed lender ROI.”
Apex Clearing Holdings, a digital clearing and custody engine, announced formal plans to publicly list on the New York Stock Exchange under the ticker “APX.”
The Texas-based company is eschewing the traditional IPO route to a public launch, and instead pursuing the listing via a merger with Northern Star Investment Corporation, a special purpose acquisition company (SPAC). The deal values Apex at $4.7 billion.
Apex is the sixth fintech to use a SPAC to go public in the past few months, joining SoFi, BankMobile, Payoneer, MoneyLion, and OppFi.
“We are in the first inning of the digital revolution in financial services, and our merger with Northern Star will provide Apex with the resources and flexibility to accelerate our growth, scale our platform, and expand our offerings and market share alongside our clients,” said Apex Clearing CEO William Capuzzi.
Capuzzi, along with Apex President Tricia Rothschild, will continue to serve the company in their current roles. Northern Star Chairwoman and CEO Joanna Coles will join the combined company’s Board of Directors.
Apex was founded in 2012 and helps online brokerages, traditional wealth managers, wealthtechs, professional traders, and consumer brands with account opening and funding, execution of trades, digital asset movements, trade settlement, and the safekeeping of customer assets.
Apex has provided custody for $14 billion in new assets year-to-date and currently serves 200+ clients representing more than 13 million customer accounts. The company has already recorded impressive growth so far this year, seeing 3.2 million customer accounts and more than one million new crypto accounts opened in the past two months.
