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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
Enfuce closed a $9.2 million follow-on investment, adding to the $49 million it received in 2021.
Vitruvian Partners led the round, which saw contributions from existing investor Maki.vc and new contributor Visa.
Enfuce will use the funds to prepare for growth in the enterprise segment, as well as expand into more European markets.
Card issuing and payments processing innovator Enfuce recently announced it received a $9.2 million (€8.5 million) follow-on investment. The new funds are added to the Finnish company’s $49 million (€45 million) Series C round in 2021 and bring Enfuce’s total funding to $67 million (€62 million).
Leading today’s follow-on round is Vitruvian Partners. Existing investor Maki.vc, along with new contributor Visa, also participated.
Commenting on the new investor, Enfuce Co-founder and Co-CEO Monika Liikamaa said, “Visa’s trust isn’t just a validation of our business, it’s a testament to our significant growth during challenging economic times. With Visa’s investment, we will continue to bring our bold vision of shaping the future of embedded finance to life.” Enfuce Co-founder and Co-CEO Denise Johansson added, “This investment represents more than mere financial backing for us. It’s the continuation of an extensive and productive partnership between Visa and Enfuce.”
Enfuce was founded in 2016 with the intent to offer a cloud-based processing system that could allow any business to start issuing payment cards. In addition to payment card issuing, the company also offers digital wallets, fraud and dispute managements, card program analytics, and more. Enfuce processes $2.2 billion (nearly €2 billion) in transactions annually for clients including Pleo, OKQ8 and Memo Bank.
Enfuce will use today’s follow-on investment to prepare for its next area of growth, the enterprise segment. Additionally, the company plans to expand across European markets including Benelux, Germany, and France.
The rise in banking-as-a-service (BaaS) tools, such as the ones provided by Enfuce, offers businesses across a range of industries access to financial infrastructure. Integrating financial services into non-financial platforms not only enhances the customer experience but it also offers businesses new revenue streams. As we enter into 2024, BaaS and embedded finance solutions are set to rise. However, as regulators begin to take notice and find new risk factors, adoption of this trend will likely be cautious.
Treasury Prime, an embedded banking software platform, has signed a strategic partnership with fraud and risk management platform Effectiv.
Companies and FIs on Treasury Prime’s network will leverage Effectiv’s platform for transaction monitoring.
Effectiv made its Finovate debut in September at FinovateFall. The company is headquartered in San Francisco.
Embedded banking software platform Treasury Prime has forged a strategic partnership with fraud and risk management platform Effectiv. The new relationship will enable companies and FIs on Treasury Prime’s network to access transaction monitoring technology from Effectiv to reduce fraud and improve risk management.
Effectiv offers a no-code, fraud, risk, and compliance platform that helps FIs fight fraud at every point in the customer journey, from onboarding to real-time transaction monitoring. The platform identifies and monitors high-risk and high-value transactions for potentially anomalous or fraudulent behavior. This lowers the risk of financial loss for customers and the potential for reputational damage to institutions. Effectiv’s technology automates compliance and risk management, providing more than 80% reduction in manual review, and 58% reduction in fraud and risk management costs. Since inception, Effectiv has processed more than $41 billion in automated risk and fraud decisions.
“Over the past year, we’ve seen a rise in fraud with real-time payments,” Effectiv co-founder and CEO Ravi Sandepudi said. “As banks get ready to adopt FedNow and AI fraudsters increasingly get more sophisticated, it’s critical that fintechs and banks invest in technology that can improve their security posture.”
Effectiv made its Finovate debut earlier this year at FinovateFall. At the conference, the company demoed how its unified fraud, risk, and automated compliance platform helps institutions safely facilitate high-risk and high-value transactions.
Headquartered in San Francisco, California, Effectiv has raised more than $9 million in funding. This sum includes a $4.5 million seed round in July led by Better Tomorrow Ventures. Effectiv also used the funding announcement to preview its new biometric solution, DeviceIntel. The telemetrics and intelligence solution analyzes and identifies suspicious activity on user devices. Effectiv COO and co-founder Ritesh Arora referred to DeviceIntel as part of the company’s “holistic evaluation approach” to fighting fraud.
Interestingly, the team that founded Effectiv in 2021 previously launched fraud detection company Simility. Acquired by PayPal in 2018. Simility introduced itself to Finovate audiences as part of our developers conference series FinDEVr in 2017.
Founded in 2017, Treasury Prime offers a range of core banking solutions including accounts, payments infrastructure, and enhanced FDIC insurance. The San Francisco, California-based company also leverages its embedded banking software to facilitate connections between banks and enterprise partners, as well as offer a partnership marketplace. Chris Dean is co-founder and CEO.
YieldStreet has agreed to acquire Cadre. Financial terms of the deal were not disclosed.
Cadre CEO Ryan Williams will lead YieldStreet’s new division focused on building an institutional audience.
When the acquisition is finalized, YieldStreet will hold an investment value of more than $9.7 billion and will serve more than 500,000 investors.
Alternative investments platform YieldStreet made its third acquisition today. The New York-based company announced it has picked up real estate investment platform Cadre for an undisclosed amount.
When combined with Cadre, YieldStreet will hold an investment value of more than $9.7 billion and will serve more than 500,000 investors across eight institutional and retail distribution channels. Across the two companies’ platforms, investors have allocated $5.3 billion and have received $3.1 billion in returns to date.
Founded in 2015, YieldStreet offers an alternative investment platform that provides access to a wide range of asset classes– including art, real estate, legal, corporates, consumer, and commercial– via single investments or funds. The company also offers short-term notes on offerings with terms between 3 and 6 months.
Cadre is headquartered in New York and offers its investors fractional commercial real estate investment opportunities, as well as access to funds comprised of multiple commercial real estate holdings. The company was founded in 2014 and had raised $133 million.
“After nearly a decade of building a top-tier real estate investment platform that has generated compelling returns for institutional investors, we are incredibly proud to take the next step in our journey to broaden access to institutional real estate and other alternative asset classes alongside Yieldstreet,” said Cadre Founder and CEO Ryan Williams. “Together with Yieldstreet, we look forward to helping expand institutional distribution and broadening its offering of institutional-caliber products and innovative solutions that reduce friction for investors in private markets.”
Logistically, Ryan Williams will remain CEO of Cadre and will take on a new role as Yieldstreet’s Global Head of Institutional Partnerships & Clients, where he will lead YieldStreet’s new division focused on building an institutional audience. Cadre investor and advisor Mike Fascitelli will serve as the Global Chairman of Real Estate and Head of Cadre’s Investment Committee. The rest of the Cadre team, including Chief Investment Officer Dan Rosenbloom, will also join YieldStreet.
“We will continue to pursue strategic opportunities to increase revenue, enhance profitability, drive operating synergies, and unlock new channels for distribution or exceptional technology,” said YieldStreet CEO Michael Weisz. “Expanding complementary distribution channels and markets beyond the U.S., investment portfolios and capabilities with Cadre is just the beginning. We are thrilled to welcome Cadre to the Yieldstreet family.”
A newly announced partnership between institutional payment orchestration platform Paydock and Australia’s Commonwealth Bank (CBA) will give merchants in Australia the ability to offer their customers a range of new payment options. This new flexibility comes courtesy of PowerBoard, which provides a dynamic payments experience to customers via API, without requiring businesses to make major changes to their existing payments infrastructure.
“Our partnership with CommBank sets a global precedent for financial institutions,” Paydock CEO and founder Rob Lincolne said. “It shows not only how banks can bring flexible payment strategies to customers in record time with payments orchestration, but also it establishes a new paradigm whereby banks can become more competitive and deliver more value by working with fintech players.”
PowerBoard will make it easier for CBA to deploy the latest payment methods, types, providers, and processors to merchants. CBA General Manager of Merchant Solutions Karen Last noted growing customer interest in new payment options. In a statement, she highlighted alternatives such as account-to-account payments, digital wallets, and Buy Now Pay Later as reasons to pursue the partnership with Paydock.
“PowerBoard makes it significantly easier for Australian merchants to offer choice to customers and manage their payments ecosystems, without all the costly integrations,” Last said.
Headquartered in London, Paydock also maintains an office in Sydney, Australia. The company has raised $31.8 million (£25 million) in funding according to Crunchbase. This capital came in the form of a Series A investment in May that was led by IAG Silverstripe.
Commonwealth Bank of Australia is one of the top 50 banks in the world. Founded in 1911, CBA became a fully private bank in 1996. The institution is part of the “big four” of Australian banks, along with the National Australia Bank (NAB), ANZ, and Westpac. CBA had total assets of 1.2 trillion AUD as of 2022.
Speaking of Commonwealth Bank, the institution also announced this week that Bendigo Bank and fraud monitoring firm Satoriwill pilot CBA’s NameCheck technology. Launched this spring, NameCheck is built to prevent scams and mistaken payments. According to the bank, the solution has prevented more than 10,000 scam payments and reduced mistaken payments by more than $100 million, to date.
“With scams and fraud costing Australians and businesses billions of dollars annually, it’s clear a whole of ecosystem response is needed to combat this problem,” CBA Group Executive Business Banking Mike Vacy-Lyle said. “We are proud to be able to extend our industry-leading technology to others and contribute to protecting more Australians against cyber criminals.”
NameCheck leverages advanced technology and CBA’s access to payment data to help establish the accuracy of account credentials. Bendigo Bank will integrate NameCheck into its Up app. Financial fraud monitoring company Satori will also take advantage of the technology.
“We are excited to work with CBA and extend the NameCheck service to our corporate customer base to complement the existing AI driven financial controls monitoring service driving operational efficiency and preventing fraud,” Satori Executive Director of Growth Mark Bookatz said.
Founded in 2002, Satori is headquartered in Sydney, Australia. The company has more than 200+ customers in the APAC region who rely on its automated transaction monitoring services. These firms include Afterpay, Qantas, and Volkswagen Group.
The Australian government’s plans to regulate Buy Now Pay Later services are having a hard time keeping up with public enthusiasm for the payment option.
This week, the Reserve Bank of Australia (RBA) shared results of a survey that indicated a significant increase in use of Buy Now, Pay Later services. The specific demographic was individuals between the ages of 18 and 39. The survey showed that more than 40% of those in this cohort had used BNPL services in the past year. The survey, which had almost 1,000 participants, also noted an overall increase in the number of people using BNPL. Incorporating data from a Reserve Bank of Australia research paper from 2022, the RBA determined that there has been an increase of 8% in adult BNPL use since 2019.
Designing a regulatory framework for Buy Now Pay Later services in Australia has been on the government’s to-do list since the spring. The goal is to bring BNPL under the umbrella of existing credit regulations, including credit license requirements, and minimum standards on conduct, services, and products. This also includes mandating that BNPL companies conduct credit history checks. Overall the regulations, which will treat BNPL services as conventional lending products, are seen as among the toughest proposed.
But the rollout has hit a snag. The RBA has announced that the new regulatory framework for BNPL will arrive next year rather than at the end of 2023 as originally planned. The reason for the delay was “resourcing pressures” on the government’s legislation writing team. And while this will likely give New Zealand regional bragging rights over its larger neighbor when it comes to adoption of BNPL regulations, the impact of the delay on the Australian BNPL market should be slight.
Here is our look at fintech innovation around the world.
Tomorrow marks the final month of 2023. And while it is a good time for organizations to reflect on their progress from the past year, it is also an opportunity to plan for success in 2024.
To jump start some new ideas for 2024, check out our conversations with industry experts. Earlier this year, we gathered a range of insights from thought leaders in attendance at FinovateFall in New York. Among the topics we discussed were:
Using AI to create better customer experiences
AI in authentication
How can banks and fintechs work together better?
Top industry trends
How can fintechs face new challenges in today’s economic environment?
Robinhood is launching in the U.K., marking the company’s first international launch.
General availability for U.K. users will roll out in early 2024.
Company CEO and Co-founder Vlad Tenev called the U.K. an ideal place to launch its first international brokerage product because the region is a hub for innovation, global finance, and top tech talent.
Stock brokerage app Robinhood is making its first geographical move– 10 years after first entering the market in 2013. The California-based company announced today it has launched its brokerage services in the U.K.
The move means that Robinhood’s U.K. customers will be able to use the platform to trade more than 6,000 U.S.-listed stocks and American Depositary Receipts, including TSLA, AMZN, and AAPL. Launching today, Robinhood’s U.K. platform will offer trading with no account minimums, no foreign exchange fees, and will allow customers to trade outside market hours via Robinhood 24 Hour Market. Additionally, investors who pay $5 per month for Robinhood Gold will earn 5% AER on uninvested cash that they hold on the platform.
Minister for Investment Lord Johnson said that he is “delighted” that Robinhood selected the U.K. as its first international brokerage market.
Robinhood’s expansion overseas is an important step forward for the company, which states that its mission is to democratize finance for all– including those in other geographies. “Since we launched Robinhood a decade ago, it’s always been our vision to expand internationally,” explained Robinhood CEO and Co-founder Vlad Tenev. “As a hub for innovation, global finance and top tech talent, the United Kingdom is an ideal place for us to launch our first international brokerage product.”
Starting today, U.K. residents can sign up on the waitlist for early access to Robinhood. The company plans to roll out general availability in early 2024.
With 23 million U.S. users, Robinhood offers stocks, ETFs, options trading, crypto trading, and a debit card that helps users invest as they spend. Earlier this year, the company acquired credit card company X1, stating that the purchase will one day help the company offer its customers access to credit. Offering credit will also help Robinhood compete with its closest U.S. competitor, Acorns, which currently does not offer any credit products.
Transaction Assurance automates effectiveness testing. This ensures that all transactions are both monitored and tested.
Cable made its Finovate debut last year at FinovateFall 2023. Co-founder Natasha Vernier is CEO.
Effectiveness testing platform Cablehas launched its financial crime compliance and transacting testing solution, Transaction Assurance. The new offering automates effectiveness testing to ensure that all transactions are both monitored and tested for potential regulatory breaches or control failures. This helps banks, fintechs, and payment platforms avoid the limitations of manual dip sampling.
Cable founder and CEO Natasha Vernier explained that the recent spate of compliance lapses – and the billions in fines paid by major institutions for these lapses – have revealed specific problems in financial crime prevention methods, including the way these processes are tested.
“These cases have brought to light gaps in existing protocols, including systemic failures in manual testing,” Vernier said. “These industry shortcomings are why we developed Transaction Assurance. It helps illuminate the vast, often untested expanse of transactional data, bringing that previously unseen 99% into sharp focus.”
Transaction Assurance acts as a sophisticated translation layer. The solution amplifies the effectiveness of first-line control systems by synthesizing and testing data in real-time. This ensures continuous adherence to an institution’s policies and controls. Transaction Assurance delivers actionable insights and alerts, as well as detailed reporting and analytics. This gives managers maximum transparency with regards to the institution’s compliance status.
“It is either Cable or four more people,” Steven Eisenhauer, Chief Risk and Compliance Officer for Ramp Network, a Cable client, explained. “No one questions the expense for that reason. For our size and volume, you would expect a larger team, but we have literally tested more transactions than all of our competitors.” Ramp Network and Cable announced their partnership in February.
Cable made its Finovate debut last year at FinovateFall. At the conference, the company demoed its Automated Assurance solution that enables banks and fintechs to automate their compliance assurance and effectiveness testing. The company’s technology also streamlines a number of manual compliance processes including stakeholder reporting and record management.
This year, Cable has forged partnerships with credit card company Yonder, digital bank Grasshopper and, in October, with unsecured business and personal loan specialist BHG Financial.
Founded in 2020, Cable introduced new Chief Revenue Officer Candace Sjogren in August. Sjogren most recently served as SVP, Global Head of Sales at crypto-as-a-service company Zero Hash. Cable has raised more than $16 million in funding, according to Crunchbase. This includes $11 million in a Series A investment from CRV, Jump Capital, and Stage 2 Capital announced in May.
The Fintech Founders series, presented by our sister publication Fintech Futures, features fintech and financial services veterans sharing their insights and experiences on a range of topics important to businesses in our industry.
Today we share five conversations on fintech funding featuring our panel our fintech experts. As part of our Funding Series of discussions, our panelists talk about issues such as: bootstrapping versus external funding, finding the right investment partners, the importance of producing significant growth, as well as tips for entrepreneurs and surprises our panelists encountered in their own journeys in fintech and financial services.
eToro announced it will pay investors 4.9% interest on idle cash held in their options account.
Users must have at least $5,000 in idle cash to benefit from the interest rate, but investors with less than that can pay a fee to receive the 4.9% interest.
The move not only indicates that eToro wants to keep hold of investors’ funds as they move their money out of risky investments, but it also signals that eToro likely won’t launch its own suite of banking tools any time soon.
After starting the year with a fresh $250 million in funding, social investment network eToro has experience with cash. Perhaps that’s why today the company is launching a feature that pays users interest on cash in their accounts.
The new option is meant to serve as another form of diversification for its investor clients. Currently eToro offers users the opportunity to invest in crypto, stocks, ETFs, and options trading. And while holding cash is usually considered a negative quality for investors, a high interest rate, combined with no risk of loss may make higher cash balances more palatable.
“Retail investors are constantly told to diversify their portfolio and ensure they’re maximizing their investments – our new high interest on cash offering helps investors make their money work even when it is at rest,” said eToro U.S. CEO Lule Demmissie. “Our high rate offering is accessible to real investors unlike other brokers who have high minimum balance requirements to earn their rates.”
The new interest on cash program is free for eligible users with an at-rest cash balance of $5,000 or more and the 4.9% interest is paid on cash reserves that are not actively invested. Users with a cash balance lower than $5,000 can still receive the 4.9% interest rate, but eToro will charge them a monthly fee.
Users can access the new interest on cash feature via eToro Options. At launch, accountholders will receive 4.9% APR on cash balances within their eToro Options account. This comes at a time when, in the U.S., the average yield for savings accounts is 0.61% APR.
As new and existing challenger banks bolster their offerings with high-yield interest rate accounts, it is becoming increasingly difficult (and more expensive) for banks to win over consumer deposits. Today’s move by eToro indicates two things. First, the company is seeking to stem the outflow of investor funds as they move their money from risky market opportunities into high-yield savings account safe havens. Secondly, it indicates that, unlike many other fintechs in the investing space, eToro is not planning to become a challenger bank by launching its own savings account and debit card any time soon.
A wealthtech pioneer, eToro was founded in 2007 and has received nearly $693 million in funding. The Israel-based company currently has over 32 million registered users from more than 100 countries on its platform. Yesterday, eToro announced it received approval from the Abu Dhabi Financial Markets Authority to operate in the UAE.
Money transfer company Paysend has raised $65 million in funding. The round featured a strategic investment from partner Mastercard.
The investment adds to Paysend’s $125 million Series B round, which closed in 2021.
Paysend made its Finovate debut at FinovateEurope in London in 2016.
International money transfer company Paysend has secured $65 million in funding. The round included a strategic investment from Mastercard, which announced a partnership with Paysend earlier this year. That alliance helped enhance cross-border payments for SMEs by way of its Open Payments Network (OPN).
Existing investors Infravia Growth Capital, One Peak, and Hermes GPE Innovation Fund also participated in the round. This week’s investment follows the company’s $125 million Series B round, which closed in 2021.
A Finovate alum since its debut at FinovateEurope in London in 2016, Paysend provides fund transfers to more than 170 countries. The company’s platform ensures transparency by displaying currency rates, transfer fees, and the receivable amount before each transfer. Paysend users can make transfers via bank cards, accounts, and even mobile numbers. Money transfers are certified by Visa, Mastercard, China UnionPay, and are PCI DSS certified, as well.
“This significant investment is a testament to the strength of Paysend’s vision,” Paysend CEO and co-founder Ronnie Millar said, “to build the best-in-class cross border solutions for businesses and consumers, making money transfer simple for everyone.”
Paysend’s funding news comes just days after the company announced a partnership with CalQRisk. The company offers a governance, risk management, and compliance (GRC) solution that Paysend will use to enhance its current risk management processes. In October, Paysend teamed up with fellow Finovate alum Western Union. This partnership provided Western Union customers with a new direct to card payout option.
Paysend is headquartered in London, U.K. The company entered the Israeli market this summer after partnering with Israel-based fintech Okoora.
Digital identity verification company Mitekannounced a new partner today. The California-based company has teamed up with compliance, credit risk, and lending solutions company Abrigo to help the firm’s bank clients access technology to help protect themselves against financial crime.
Specifically, Abrigo is seeking to mitigate check fraud, which is not only prevalent among banks, but is also costly. While the technology behind paper checks seems antiquated, fraud techniques for the payment method are not. According to FinCEN, check fraud suspicious activity report (SAR) filings increased 94% over the course of 2021. Last year, the number of SAR filings exceeded 680,000. “The sophistication of fraud and synthetic checks has never been more concerning,” explained Mitek SVP and GM Michael Diamond.
Abrigo will offer its bank customers access to Mitek’s Check Fraud Defender to help them stop fraudulent activities around checks. Mitek’s Check Fraud Defender uses imaging science, machine learning, and artificial intelligence to analyze the images of the checks and verify authenticity to reduce fraud losses.
“By combining Mitek’s cutting-edge technology with Abrigo’s industry-leading platform, we can provide our 2,400 customers with a powerful solution to help protect their institutions and customers from financial crimes,” said Abrigo CEO Jay Blandford.
Mitek was founded in 1986 and offers technology for mobile check deposit, new account opening, identity verification, and more. The company’s solutions are used by more than 7,900 organizations and its mobile check deposit and account opening tools reach more than 80 million consumers. Mitek is publicly listed on the NASDAQ under the ticker MITK and has a current market capitalization of $517 million.
Earlier this fall, Mitek partnered with Equifax to advance the company’s biometric authentication and liveness detection capabilities.
Core banking platform 10x Banking has formed a strategic partnership with B2B lending technology company Trade Ledger.
The two companies will offer banks and alternative lenders solutions to help them better serve small and medium-sized businesses.
10x Banking won Best of Show in its FinovateEurope debut earlier this year.
Cloud-native core banking platform 10x Banking and B2B lending technology company Trade Ledger announced a strategic partnership this week. The two fintechs will work together to offer banks and alternative lenders a composable banking solution to help them better serve their SME customers.
Specifically, the collaboration will enable FIs to introduce a variety of new, more complex, working capital solutions to market. These include invoice, receivables, and supply chain finance products. A real-time API connection between Trade Ledger’s data platform and 10x Banking’s SuperCore platform allows credit applications to be linked to the creation of a new 10x customer account. Trade Ledger manages the loan application, risk assessment, and the risk and collateral management operations. 10x Banking handles account opening and the credit account life cycle.
“Automating integration between credit applications and account creation allows banks to deliver a superior customer experience, while also driving operational efficiency,” 10x Banking’s VP and Global Head of GTM and Partnerships, Frederico Venturieri said. “This collaboration reflects our shared vision of leveraging technology to revolutionize the business banking landscape.”
The strategic partnership seeks to close what the company called in a statement “the global working capital credit gap.” A report by Allianz estimated this liquidity gap to be $30 trillion worldwide, with SMEs impacted the most. Among the culprits are high acquisition costs, which make lenders reticent to take on small business customers. Another issue is an overly complex and lengthy application process. The partnership between 10x Banking and Trade Ledger responds to both the challenges of account opening, as well as the problem of access to working capital.
“Combining our lending automation capabilities with 10x’s core banking expertise, we can redefine how financial institutions onboard customers and manage the lending process,” Trade Ledger VP of Channels Alan Walsh said.
Founded in 2016 and headquartered in London, U.K., 10x Banking made its Finovate debut at FinovateEurope in March. The company won Best of Show for its 10x SuperCore Cards solution that enables banks to build a card proposition in minutes. More recently, 10x Banking has forged partnerships with compliant open banking API technology company Ozone API and mortgage sales and origination software provider Iress. In August, the company introduced new Chief Product Officer Okan Ozaltin, formerly of Signifyd and Fiserv.
10x Banking has raised more than $252 million in funding according to Crunchbase. Antony Jenkins is CEO.
Looking to demo your latest fintech innovation? Applications are now being accepted for demoing companies at FinovateEurope in London, February 27 and 28, 2024. Visit our FinovateEurope hub for more!
