News

B2B FinTech Radar: June 14, 2022

On the radar this week:

Q&A with David Putts, Chief Growth Officer, Billon

Digiseq, a tokenized wearable payments receiver, raised strategic funding.

Lumiant, a wealth manager client advice and engagement platform, raised $3 million.

Datia, an ESG data workflow solution for investing, raised $3.4 million.

Cryptio, a digital asset back-office platform, raised a $10 million Series A.

Entropy, a decentralized crypto custodian for financial institutions, raised $25 million in seed funding.

Trovata, a builder of automated cash reporting and forecasting, raised $27 million to launch in the UK and Eu.

Ethena, a compliance training platform for financial services, raised$30 million.

MidDesk, an automated KYB and underwriting platform, raised a $57 million Series B.

Bud, an open banking platform that uses machine learning, raised$80 million.

Kushki, an Ecuadorian payments infrastructure builder, raised a $100 million Series B extension at a $1.5 billion valuation.

Codat, a UK API platform to connect small businesses with financial institutions, raised $100 million from investors including JP Morgan and Plaid.

Backbase, a Dutch builder of banking engagement software, raised€120 million at a €2.6 billion valuation.

Q&A with David Putts, Chief Growth Officer, Billon

1. Tell us a bit about yourself and your company.

I am the Chief Growth Officer of Billon – the fintech scaleup which created the Unified Enterprise DLT System.  What makes Billon special is that it saw weaknesses in the ability for blockchain protocols to handle the complexity of compliance.  For this reason, Billon creates a new, eco-friendly layer 1 protocol which unifies fiat digital cash, documents and non-cash tokens into a single, high-performance distributed ledger (DLT). The system, designed for maximum throughput and low cost of maintenance, meets regulatory requirements and solves challenges for the wide adoption of blockchain technologies. As a result of this innovation, we are now moving past the early commercialisation stage, and we have over 20 clients.

Before joining Billon I was a challenger bank leader.  I founded or ran two challenger banks, building them from scratch – Inteligo in Poland and Equa in Czechia – and I also became a payment expert with several years of experience in both Barclays and HSBC. The passion for challenging the status quo has always been in my blood, even during my early years as a consultant at McKinsey, so you could say that I have been fighting for change during my entire 30-year career.

http://www.fintechforum.de/qa-with-david-putts-chief-growth-officer-billon/

Digiseq secures investment from Rtekk

Wearable tech pioneer DIGISEQ has today announced it has secured an undisclosed investment from Rtekk, a portfolio company of Investcorp, a leading global alternative investment firm, to accelerate DIGISEQ’s rapid expansions plans as demand for its ground-breaking mobile provisioning and personalisation service (RCOS™) surges amongst bank issuers, payment schemes and sports venues worldwide.

Established in 2014, DIGISEQ is the world’s first tokenised wearable payments service, enabling wearable tech users to pair their bank card and make contactless payments or digital ID authentication with a wide range of passive wearable items.

DIGISEQ’s RCOS™ technology is revolutionising wearable payments by allowing consumers to register and activate their own item using their payment card via their Android or iPhone device, through DIGISEQ’s Manage MiiTM mobile app, which can be white-labelled with the branding of its clients, essentially making it an invisible payments partner for banks, payment schemes and brands.

Currently in use with MasterCard, RCOS™ uses secure tokenisation to deliver payment data over-the-air to the consumer’s wearable item.

https://www.finextra.com/pressarticle/92878/digiseq-secures-investment-from-rtekk

Savant Wealth Management Invests $3M in Advice Engagement Platform Lumiant

CHICAGO–(BUSINESS WIRE)–Lumiant, an advice and ​client engagement platform that empowers advisors to connect with families around their values and money goals to make better choices and live their best financial lives, today announces it has secured a $3 million investment to support its expansion in the United States from strategic investor Savant Wealth Management.

The move will accelerate Lumiant’s international expansion into the lucrative $52.9B U.S. financial planning and advice and the $142B accountancy services markets.

Founded in Sydney, Australia, Lumiant is specifically designed to deepen client relationships and help financial professionals communicate their unique value while delivering tailored financial advice.​ The company officially launched in the United States on May 17 and aims to use its new resources to bankroll rapid expansion in the country.

“We couldn’t ask for a better strategic partner than Savant. For more than 30 years, they have committed to applying the smartest financial thinking to serve individuals and their families in a fiduciary capacity. Savant’s approach, values, and interests align with ours. We look forward to working with them to ensure our platform drives referrals, retention and revenue for firms in the United States, as well as helping more people live their best possible lives,” said Santiago Burridge, CEO and Co-founder of Lumiant.

Savant is a leading independent, nationally recognized, fee-only firm offering investment management, financial planning, retirement planning, accounting and family office services, with $13.5B in assets under management (as of March 31, 2022). As Lumiant’s first customer in the United States, Savant will be taking a minority stake in Lumiant’s U.S. business.

https://www.businesswire.com/news/home/20220601005581/en/Savant-Wealth-Management-Invests-3M-in-Advice-Engagement-Platform-Lumiant

Swedish climate fintech Datia plants $3.4 million to streamline ESG workflows

The global Environmental, Social, and Governance (ESG) reporting market is growing rapidly and is expected to grow at a CAGR of 17% to reach $16 billion by 2027. At the same time, the number of sustainable finance regulations and policy interventions is also accelerating, putting pressure on investors to meet market and regulatory demands.

Founded in 2019 by Juan Manuel Serruya and Manne Larsson and headquartered in Stockholm, Datia aims to support investors in their sustainability work. The fintech company has now raised $3.4 million in a seed funding round to simplify investors’ transition to sustainable finance.

The funding will drive its expansion across Europe. It will also help to accelerate research and development of its ESG tools and sustainability data.

The investment was led by Berlin-based VC firm Nauta Capital, with participation from Accel Starter Ramzi Rizk, Zenloop’s founder Paul Schwarzenholz, Söderberg & Partners and Sting.

https://tech.eu/2022/06/07/swedish-climate-fintech-datia-plants-34-million-to-streamlines-esg-workflows

Cryptio raises $10m

Cryptio has raised $10 million in Series A funding for its enterprise crypto back-office platform.

Point Nine led the round, with participation from BlueYard, Alven, Coinshares, Avantgarde Finance, Protocol Labs and Draper Associates.

Cryptio is an enterprise-grade crypto accounting and reporting platform that helps financial institutions, corporates and crypto-native businesses navigate the fragmented digital-asset landscape. The firm already claims more than 200 clients, including Consensys, Aave and DeFi Saver, and has seen revenue grow 12x since its seed round last March.

Antoine Scalia, CEO, Cryptio, says: “The biggest challenge with crypto accounting on the institutional level is having auditable and reliable transaction history data. Block explorers and third-party data providers often fail to capture complex crypto activity like DeFi, Staking, Mining, and NFTs. These discrepancies can’t be tolerated at the institutional level.

“At Cryptio, we’re obsessed with data accuracy and have partnered with Layer-1 foundations to build proprietary blockchain indexers. We’re able to reliable pull transaction data and perform mini-audits, ‘sanity checks’ to prove data quality.”

https://www.finextra.com/newsarticle/40401/cryptio-raises-10m

Meet the trans, anarchist founder who just landed $25M to reform how crypto is stored

Tux Pacific isn’t your average tech founder. They’re a self-taught cryptographer who dropped out of college, a proud member of and advocate for the transgender community and a self-described anti-capitalist anarchist who believes in free-market principles deeply rooted in the early days of crypto, when Bitcoin reigned supreme and banks had no interest in the sector.

Pacific’s radically different background in comparison to other entrepreneurs is precisely what informs their unique way of thinking, they told TechCrunch in an interview. Pacific founded and serves as CEO of Entropy, a decentralized crypto custodian that says it has raised $25 million for its seed round led by Andreessen Horowitz alongside Coinbase Ventures, Robot Ventures, Dragonfly Capital, Ethereal Ventures, Variant and Inflection. Prominent angel investors from the tech community, including Naval Ravikant, Sabrina Hahn and James Prestwich, also participated in the round, according to Entropy. This latest round follows the company’s $1.95 million pre-seed raise in January.

Trovata eyes UK and EU launch on $27 million funding round

Trovata, a US startup specialising in automating cash reporting and forecasting through wholesale, multi-bank API data aggregation, is set to open for business in the UK on the back of a $27 million funding round.

Sky News understands that Trovata, which is based in California, is opening offices in London and Amsterdam as it tries to accelerate the adoption of its specialist cash reporting and forecasting services.

Launched in 2019, Trovata provides an end-to-end platform built natively on wholesale banking APIs, removing the need for legacy implementations or IT support and enabling self-setup. This allows Trovata to aggregate bank balances and transactions in real time to automate cash-centric workflows, such as cash reporting, analysis, and forecasting, says the firm.

In January 2021, the company raised $20 million in a Series A funding round led by Wells Fargo Strategic Capital. Capital One Ventures and Pivot Investment Partners, as well as existing early investors JPMorgan and Fintop Capital joined the round.

Earlier this year, the firm scored a distribution agreement with Capital One, which will market and refer Trovata’s cash management platform to new and existing commercial and corporate banking clients.

https://www.finextra.com/newsarticle/40386/trovata-eyes-uk-and-eu-launch-on-27-million-funding-round

Modern Compliance Training Startup Ethena Announces $30 Million Series B

BROOKLYN (June 7, 2022) — Ethena, a modern compliance training platform, announced it raised a $30 million Series B, led by Lachy Groom, with participation from existing investors including Felicis, Neo, Homebrew, and others. They’ve also welcomed angel investors including Jack Altman, Mathilde Collin, William Hockey, Gretchen Howard, and Claire Johnson. It will use the capital to build out additional compliance product lines and expand its core training technology.

“Businesses are held to a much higher standard than ever before. Employees expect companies to build inclusive and ethical workplaces — and compliance, when done right, does exactly that,” said Roxanne Petraeus, CEO and co-founder of Ethena. “Modern companies don’t want to just ‘check the box,’ they want to use data-driven approaches to educate employees and spot issues proactively. This latest round of support allows us to continue building out a compliance operating system designed for today’s teams.”
When the company was founded in 2019, it was clear that the old way of doing compliance training — dated videos sent out yearly — wasn’t working. According to a Gallup poll, only 10% of employees strongly agree that they learned something from their compliance training. In contrast, Ethena’s solution, which delivers digestible training over time, is highly effective: For example, learners who completed Ethena’s Harassment Prevention training reported a 61% increase in confidence intervening on behalf of a colleague.
https://www.goethena.com/post/modern-compliance-training-startup-ethena-announces-30-million-series-b

Middesk raises $57M to automate business verification and underwriting

Middesk, a platform designed to automate business verification and underwriting decisions, today announced that it raised $57 million in a Series B round co-led by Insight Partners and Canapi Ventures with participation from Sequoia, Accel and Gaingels. Co-founder and CEO Kyle Mack said that the new capital will enable Middesk to triple its headcount to 120 employees by 2023 and further develop products in the identity management space.

“When people hear ‘identity,’ they think of ‘identity verification,’ but identity means something different based on who is asking or interested,” Mack told TechCrunch in an email interview. “For a bank, it means simplifying the process of opening commercial bank accounts. For a lender, it means accelerating the process for businesses to access capital. For the government, it means ensuring businesses are registered and paying their taxes appropriately.”

Mack co-launched Middesk in 2019 with Kurt Ruppel to address what he describes as the “downstream effects and resulting challenges of onboarding new business customers.” Mack previously worked at Checkr, where he managed and built the solution consulting team. Ruppel was a senior software engineer at Zendesk before joining Checkr, where he worked with Mack as an engineering manager.

Bud raises $80M more to expand its AI-based open banking platform, used to power lending tools and more

Embedded finance — where financial services companies and others bring in different kinds of fintech technology by way of APIs to enhance their own offerings with more data and functionality — remains a growing opportunity, both to help fuel new business and to help incumbents get up to speed with their disruptors. In the latest development, Bud Financial, a provider of an AI-based open banking platform that is used by large banks and others to help power lending and other personalized products, has raised $80 million.

Ed Maslaveckas, the CEO and co-founder, told TechCrunch the investment, a Series B, will be used both for R&D — specifically to further build out its artificial intelligence-based tools — and for international expansion. The company today’s tech appears to be based around natural language (that language being English). It is live in the U.K., Australia and New Zealand and it plans to expand to two more countries this year. It won’t say which ones but it has a lot of multinational investors, including some out of another English-speaking market, the United States.

Bud is also not disclosing customer or transaction numbers, nor revenues, nor its valuation with this round, but here is some context on that. This round is being led by Bellis Phantom Holdco Ltd., which is an indirect affiliate of investment funds managed by TDR Capital (this is a big PE investor whose name isn’t typically associated with tech investments, with its portfolio including the likes of the Pizza Express chain of restaurants and ex-Walmart supermarket giant Asda). Others in this round include SEI investments Outward VC and others. (Note: This is not the same Bud as the Singaporean metaverse startup that recently also raised funding.)

Ecuadorian payments infrastructure startup Kushki lands $100M at a $1.5B valuation

Ecuadorian payments infrastructure company Kushki has raised $100 million in an extension to its Series B round, more than doubling its valuation to $1.5 billion.

The startup had raised $86 million in the first tranche of the financing in June of 2021 at a post-money valuation of $600 million. It has raised nearly $200 million since its 2017 inception, according to Crunchbase.

Raising an extension as opposed to a new round made more sense because it was the same investors doubling down, according to CEO and co-founder Aron Schwarzkopf. Those backers include Kaszek Ventures, Clocktower Ventures, SoftBank Latin America Fund and DILA Capital, among others.

“Since then, we have just gotten more ambitious and continued to grow so we needed more money to fuel more growth,” Schwarzkopf said in an interview with TechCrunch. “The only things that changed were the economics and speed of business.”

The raise comes after a year in which Kushki saw 200% revenue growth, he said, declining to reveal hard revenue figures. It also follows a quarter in which the company grew by 100% year over year.

Codat raises $100 million to build the internet for business data and announces J.P. Morgan, Shopify & Plaid as investors

NEW YORK, June 8, 2022 /PRNewswire/ — Today Codat, the universal API for small business data, announced that it has raised $100 million in a series C investment round led by JP Morgan Growth Equity Partners. Canapi Ventures and Shopify also participated in the round and Plaid has been publicly named as an investor for the first time. Existing investors Index Ventures and PayPal Ventures also participated in the round. As part of the financing, Patrick McGoldrick, Partner at J.P. Morgan Growth Equity Partners will join Codat’s board.

Codat’s API is used by SaaS, lending and payments companies to build integrated products for their SMB customers. Whether that’s a neobank building a cashflow forecast in their app, or a payment provider enabling merchants to sync transactions with their accounting software, there is a use case for Codat in almost every fintech serving SMBs. The investment comes less than a year after Codat announced a Series B investment round last July led by Tiger Global, alongside American Express and PayPal Ventures. Codat reports that it now has over 200 clients, including many of the world’s largest banks as well as rapidly growing fintechs such as Brex, Jeeves, Pipe and Clover, and a team of 250 people across the UK, North America and Australia.

Codat will use the funds to build out their critical infrastructure to be the default means of sharing data for the small business economy. In the same way that the internet has changed almost every aspect of how we live and work, Codat’s technology will underpin the flow of small business data, giving way to tools, capabilities and opportunities not yet seen or imagined. The economic impact of this infrastructure is already proven. The SMBs sharing and syncing data to other systems via Codat’s technology have grown on average 2.7 times faster than GDP in 2021.

https://www.prnewswire.com/news-releases/codat-raises-100-million-to-build-the-internet-for-business-data-and-announces-jp-morgan-shopify–plaid-as-investors-301564131.html?tc=eml_cleartime

Backbase raises its first funding, $128M at a $2.6B valuation, for tools that help banks with engagement

Larger banks and other financial service providers are getting a lot more serious when it comes to competing with upstarts that are disrupting their businesses with fresher approaches and newer technologies. Today, one of the companies helping those larger banks with that task is announcing a big round of funding to double down on that opportunity.

Backbase — an Amsterdam-based startup that provides a platform that banks and others can use to better structure and leverage the data that they have, and to then use that to build more personalization and other new features into those banks’ customer-facing services — has raised €120 million ($128 million at today’s rates), money that it will be using to continue investing in its technology, as well as expanding its teams into more geographies. The funds — coming from a single investor, Motive Partners — values Backbase at €2.5 billion ($2.6 billion).

Backbase has been around for a decade already. It has amassed 150 big banking customers, grown from €20 million in revenue to €200 million, and is profitable, all without raising any money — in fact, it was only a few days ago that they were the subject of a profile about the virtues of being bootstrapped … oops.

It chose to take a turn away from that path for the same reason that many others that have been bootstrapped do: They want to strike while the iron is hot and invest to grow at a time when its services are in demand.