B2B FinTech Radar: 25th May 2022

On the radar this week:

Q&A with Teo Blidarus of FintechOS

Quantifeed, an Asian wealth management software provider, raised a Series C.

Former regulators join $45 million round in crypto risk platform Solidus Labs

Elwood, a UK digital asset platform for financial institutions, raised $70 million from investors including Barclays and Goldman Sachs.

Unit, a banking-as-a-service provider, raised a $100 million Series C at a $1.2 billion valuation.

Thought Machine, a UK B2B core banking provider, raised $160 million at a $2.7 billion valuation.

Xendit, a Southeast Asian payments infrastructure company, raised a new $300 million round of funding.

Q&A with Teo Blidarus of FintechOS

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

I am Teo Blidarus, CEO and co-founder of FintechOS. We allow banks and insurers to create customer-centric digital financial products and services using our digital on top and lean core solutions. Many financial institutions who want to innovate quickly are underserved or ill-served by current vendors. Our low-code, modular approach augments legacy systems and allows institutions to build, test and scale new digital products and services in weeks, rather than months.

HSBC Asset Management has led a round of funding for Quantifeed, an Asia-based wealth management software player.

The alternative investments business at HSBC Asset Management, called HSBC Alternatives, led a series C funding round in Quantifeed, which provides white-labeled platform software for financial institutions, the company said in a press release Thursday. In addition, Daiwa PI Partners was an investor in the round, while current shareholders Franklin Templeton and LUN Partners Group also invested, the release said.

Quantifeed declined to disclose the quantum of the round to

Hiring Plans: The company said the funds are earmarked to bolster its services for advisors, portfolio managers and end-customers, with improvements to portfolio design, advice and trading products as well as adding new asset classes, such as structured products, private equity and digital assets. Quantifeed said it planned to speed up hiring, particularly in Japan and Southeast Asia.

So far, Quantifeed operates in Hong Kong, Singapore, Japan, Australia and India, and has deployed its QEngine product for wealth management to clients including DBS Bank in Singapore, MUFG Bank in Japan and Cathay United Bank in Taiwan, the release said.

Quantifeed’s series B investors included Legg Mason, Cathay Financial Holding, YungPark Capital and Cyberport Hong Kong, according to data from Crunchbase. Previous funding rounds raised a total of US$14.5 million from eight investors, the data showed.

HSBC Asset Management had US$640 billion under management as of end-2021, according to the asset manager’s website.

Former regulators join $45 million round in crypto risk platform Solidus Labs

Solidus Labs, a digital asset risk surveillance firm founded by ex-Goldman Sachs engineers, has secured a $45 million B round led by Liberty City Ventures and joined by Evolution Equity Partners, Declaration Partners, and angels including former US Acting Comptroller of the Currency Brian Brooks and former CFTC Chairman Christopher Giancarlo.

The New York-based firm seeks to transform financial risk monitoring, beginning with the new challenges posed by crypto and digital asset markets. Solidus’ clientele includes top crypto firms as well as traditional financial institutions and regulatory agencies.

The announcement comes on the backdrop of record breaking crypto and DeFi adoption – with some estimates placing total value locked (TVL) in DeFi at more than $200 billion in the beginning of 2022 – which has seen Solidus Labs quadruple its team over 2021 amid massive demand.

In March, the firm unveiled its all-in-one crypto-native risk monitoring suite, Halo, which is currently monitoring more than one trillion trading events per day in more than 150 markets. The platform deploys over 50 different proprietary market abuse typologies, shielding investors and safeguarding crypto businesses from new threats unique to the crypto and decentralized finance space.

“For Web3 and the DeFi economy to truly fulfill their massive potential, there’s a need to mitigate new risks – both in terms of liquidity enablement and on the consumer and investor protection side. This is where Solidus’ crypto-native solutions come into play, and the reason we’ve been experiencing a 560% year-over-year revenue increase,” says Asaf Meir, Solidus’ founder and chief executive. “The additional funds will allow us to support the growing cohort of financial institutions looking to expand into the DeFi space, accelerate the deployment of our threat intelligence capabilities, and expand our R&D to solve a fast-growing array of DeFi specific use-cases and needs.”

Barclays and Goldman Sachs invest in digital asset platform Elwood

Barclays and Goldman Sachs have joined in a $70 million funding round in Elwood Technologies, the intsitutional-grade digital asset platform founded by British hedge fund billionaire Alan Howard.

The round was co-led by Europe’s largest B2B investor Dawn Capital and Goldman Sachs, with participation from Barclays, BlockFi Ventures, Chimera Ventures, CommerzVentures, Digital Currency Group, Flow Traders and Galaxy Digital Ventures.

Elwood’s end-to-end OMS/EMS/PMS platform provides low-latency connectivity to global crypto exchanges and deep liquidity via one single API. Full reporting and analytics and dedicated customer support round out the package.

James Stickland, CEO of Elwood Technologies, comments: “The rich mix of investors participating in this raise reaffirms the movement of financial institutions working closely with their native digital asset technology providers. Together, we aim to provide broader mass market involvement in digital assets and cryptocurrency. We look forward to working with our investors to further enhance our offerings and broaden their market adoption.”

Forecasts by Goldman Sachs’ analysts in January that a single bitcoin could hit a $100,000 valuation now look overcooked in the current crypto market rout. Despite the market setbacks, the bank remains confident that insitutional demand for digital asset investments will continue to grow.

Mathew McDermott, global head of digital assets at Goldman Sachs, says: “Our investment in Elwood demonstrates our continued commitment to digital assets and we look forward to partnering to expand our capabilities.”

Banking-as-a-service startup Unit closes on $100M at a $1.2B valuation

Unit, a banking-as-a-service startup, has closed on a $100 million Series C round of funding led by Insight Partners.

Existing backers Accel, Better Tomorrow Ventures and Flourish Ventures also participated in the financing, which values the company at $1.2 billion. The raise follows a $51 million Series B financing that was announced last June, and brings its total equity raised since inception to nearly $170 million.

Founders Itai Damti and Doron Somech started Unit, which has dual headquarters in Tel Aviv and New York City, in late 2019. The pair spent the first year stealthily building out the technology with the mission of giving companies a way to embed financial services into their product, accelerating their time to market.

In other words, Unit touts that companies using its technology in a variety of industries — such as freelance or creator economy and personal financial management, for example — can build financial products directly into their software. This gives them the ability to build and launch next-gen bank accounts, cards, payment and lending products.

Unit has seen its transaction volume grow by 7x over the last six months. The startup has crossed an annualized transaction volume of $2.6 billion, issued over 430,000 cards to over 330,000 customers, and saw a 10x increase in deposit volumes.

Damti and Somech are no strangers to growing companies. The duo previously started — and bootstrapped — Leverate, a Tel Aviv-based B2B trading tech provider.

The raise is further evidence that startups that enable other companies to offer financial products are among the most well-funded in the fintech world these days. Last week, TechCrunch reported on Dock, a Brazilian fintech infrastructure provider that raised $110 million at a valuation of over $1.5 billion. The startup operates a full-stack payments and digital banking “platform” across Latin America.

Thought Machine Raises $160 Million in Series D  

Thought Machine, a London, UK-based fintech company that builds cloud-native technology to revolutionize core banking, raised $160 million in a Series D funding, after 6 months since the series c round, now valued at $2.7 billion.

The round was led by Temasek, participation from Intesa Sanpaolo and Morgan Stanley, as well as follow-on investments from existing investors including Eurazeo, ING, JPMorgan Chase, Lloyds Banking Group, and SEB. 

The new capital will be used to carry the momentum, with APAC markets Vietnam, Thailand, Indonesia, and the Philippines on tap.

Company: Thought Machine Group Limited

Raised: $160.0M

Round: Series D

Funding Month: May 2022

Lead Investors: Temasek

Additional Investors: Intesa Sanpaolo and Morgan Stanley, as well as follow-on investments from existing investors including Eurazeo, ING, JPMorgan Chase, Lloyds Banking Group, and SEB

Company Website:

Software Category: Core Banking Software

About the Company: Founded in 2014 by former Google engineer Paul Taylor, Thought Machine provides modern, cloud-native core banking technology to some of the largest financial institutions around the world including investors and clients, Intesa Sanpaolo, Lloyds Banking Group, ING, SEB, and Standard Chartered. Thought Machine describes itself as a cloud-native core banking technology firm and is selling cloud-based banking infrastructure to old and new banks as they look to offer their customers services via the cloud, moving away from the mainframe, legacy banking tech (in the case of old school banks) or offering cloud-based services from the get-go in the case of challenger banks and fintech startups.

Southeast Asian payments infrastructure unicorn Xendit banks $300M

Xendit, a payments infrastructure platform for Southeast Asia, has raised $300 million in fresh funding. The company’s new valuation wasn’t disclosed, but it hit unicorn status in its last round of funding in September 2021. The new round brings its total raised to $538 million and was led by Coatue and Insight Partners, with participation from Accel, Tiger Global, Kleiner Perkins, EV Growth, Amasia, Intudo and Goat Capital.

Part of the funding will be used to expand into new markets, like Thailand, Malaysia and Vietnam. The company, which bills itself as “the Stripe of Southeast Asia,” also plans to add value-added services in addition to payments, like working capital loans. Xendit now has more than 3,000 customers, including Samsung Indonesia, GrabPay, Ninja Van Philippines, Qoala, Unicef Indonesia, Cashalo and Shopback.

The company says that over the last year, it grew annualized transactions from 65 million to 200 million, and increased total payments value from $6.5 billion to $15 billion. Xendit has made several strategic investments in companies that serve startups and SMEs, including private bank Bank Sahabat Sampoerna in Indonesia and payment gateway Dragonpay in the Philippines.

Xendit was founded in 2015 by chief executive officer Moses Lo and chief operating officer Tessa Wijaya.

For people who aren’t familiar with Southeast Asia’s fragmented payments landscape and the challenges its poses for businesses, Wijaya explained that “while the U.S. builds everything around credit cards, you just cannot do that in Southeast Asia. Credit card penetration is extremely low especially in countries like Indonesia, so we have to help merchants offer alternative payment methods.”

Fintech Firm Q2 Is Weighing Options After Takeover Interest

Q2 Holdings Inc., a banking-software provider, is weighing options including a sale after receiving takeover interest, according to people familiar with the matter.

The Austin-based company, which is working with a financial adviser, is fielding interest from potential private equity buyers, said the people, who asked to not be identified because the matter isn’t public. No final decision has been made and Q2 could opt to remain independent.

Q2 shares climbed as much as 11% after being temporarily halted in New York trading Tuesday. They traded around $46.10 apiece at 11:29 a.m., giving the company a market valuation of about $2.6 billion. Prior to the report, they dropped as much as 5.8% on the day and were down more than 55% in the past year.

A representative for Q2 didn’t immediately respond to requests for comment.

Private equity firms, with mountains of cash to put to work, have been aggressively pursuing software providers, which tend to generate steady cash flow. A dip in financial technology stocks in particular has also created buying opportunities. Thoma Bravo has approached banking software specialist Temenos AG about a takeover, Bloomberg News reported last month.

Q2 offers cloud-based digital banking, lending and other services to banks, financial technology firms, alternative finance providers and other clients. One of its main products, Helix, helps companies that want to be in banking, such as Betterment and Credit Karma Inc., offer finance products from checking accounts to debit cards, according to its website.

SBI Holdings to buy controlling stake in BITPoint for about $99 million, Cryptonews reports

Japanese securities and banking giant SBI Holdings will buy a controlling interest in BITPoint Japan, a crypto trading platform and domestic rival of SBI VC Trade, from its parent company, Cryptonews reported on Saturday, citing Nikkei’s Japanese news service.

SBI will buy a 51% stake of BITpoint from Remixpoint for $98.6 million. BITPoint’s market value was estimated at more than $193 million, the report said.

Remixpoint said it will “form a capital and business alliance” with SBI to expand its business through crypto collaboration, according to the report. SBI will also take a 5% stake in Remixpoint.

The report noted that the deal involves a provision that would entitle Remixpoint to receive future compensation if BITPoint meets a number of financial goals.