B2B FinTech Radar: 3rd June 2022

On the radar this week:

Q&A with Bernd Richter of FIS Impact Ventures

Jupiter Exchange Raises $5 Million in Seed Funding for First Publicly Available Alternative Asset Exchange

Fintech Startup equipifi Raises $12 Million to Power Financial Institutions with Buy Now, Pay Later

Banks and exchanges invest in digital securities market ADDX-The pre-series B funding round raised $58 million

Elliptic announced J.P. Morgan as an additional investor as part of its recent $60 million Series C funding round

Protego Trust Bank targets $2 billion valuation after quietly raising $70 million

FinTech Clear Street Closes $165 Million Series B Funding Round to Improve Access to Capital Markets

Scaling Enterprise FinTech: with Bernd Richter of FIS Impact Ventures

1. Please tell us a bit about yourself, both at work and leisure.

Family man and proud member of the venture building team at FIS to create new compelling businesses that improve our customers way to transact, pay and invest in the merchant, corporate and financial institution space across the globe

Jupiter Exchange Raises $5 Million in Seed Funding for First Publicly Available Alternative Asset Exchange

NEW YORK–(BUSINESS WIRE)–Today Jupiter Exchange, an alternative asset exchange using fractional NFT technology, announced that it has closed on a $5 million seed funding round led by White Hilt Capital. Jupiter curates iconic objects and makes fractional ownership available to anyone through its digital marketplace and exchange.

“We are thrilled to finally introduce Jupiter to the world,” said Loren Dealy Mahler, CEO of Jupiter Exchange. “Beauty belongs to those who appreciate it, and we are grateful to White Hilt Capital for sharing in that vision and partnering with us to facilitate expanded ownership of the world’s most beloved items. Our team has been working around the clock to bring Jupiter to life, and we look forward to establishing our presence at the intersection of blockchain technology and financial markets.”

“As a global financial institution, we look for impactful investment opportunities where technology is leveraged in an established but archaic market segment,” said David Mazaheri, Managing Partner of White Hilt Capital. “Historically, the alternative asset market is inefficient and participation has been closed to all but a few high-net-worth investors. By leveraging NFT technology, Jupiter is expanding ownership opportunities to anyone who cares about maintaining a diversified portfolio of investment-grade assets. Whether someone feels passionate about an item or just wants to explore new investment opportunities, Jupiter has created an ecosystem of tools that enable that pursuit.”

Jupiter Exchange establishes a simple process where the ownership of each carefully curated item, such as fine art, cars, sneakers, and pop culture memorabilia, is minted as an NFT and fractionalized into individual ownership tokens. Once sold out on the Jupiter marketplace, the item is listed on the Jupiter Exchange and available through a traditional bid-ask model.

Fintech Startup equipifi Raises $12 Million to Power Financial Institutions with Buy Now, Pay Later

SCOTTSDALE, Ariz., May 23, 2022 /PRNewswire/ — equipifi, a fintech company providing banks and credit unions with a white label Buy Now, Pay Later (BNPL) solution, completed a $12 million Series A funding round. The investment, led by Curql Collective via Curql Fund and PHX Ventures, will enable equipifi to provide financial institutions with BNPL capabilities available through their existing debit cards and banking app as consumer payment preferences evolve.

equipifi helps financial institutions use their existing data and digital banking platforms to extend BNPL offers that are in alignment with their customers’ financial goals. As an added benefit, banks and credit unions can also leverage BNPL to grow existing lines of revenue and open new ones. Since its launch in September 2021, equipifi has already partnered with seven financial institutions through multi-year contracts to bring BNPL to their solution suite.

“Consumers rely on their primary financial institution to know them and their financial goals. That’s why even as BNPL has been seeing rapid adoption through third-party lenders, the majority of consumers still look to their trusted financial institutions for a better option,” said Bryce Deeney, co-founder and CEO of equipifi. “equipifi powers banks and credit unions to take their customers shopping, providing a single place to view, accept, and manage their BNPL plans on their existing online banking app.”

“BNPL solutions are providing credit unions with a unique opportunity to retain their membership and attract a younger demographic,” says Nick Evens, President & CEO of Curql Collective. “equipifi’s team, with their foundation in credit unions and the banking ecosystem, not only understands our needs but also how to service and scale in our space, making their white label solutions particularly exciting.”

Banks and exchanges invest in digital securities market ADDX

The Stock Exchange of Thailand, Krungsri Bank and UOB have invested in blockchain-based digital securities exchange ADDX.

The pre-series B funding round raised $58 million, bringing total funds raised by ADDX to $120 million. New investors join existing shareholders on the ADDX cap table, such as Singapore Exchange (SGX), Temasek-owned Heliconia Capital, Development Bank of Japan (DBJ), Japan Investment Corporation – Venture Growth Investments (JIC-VGI), Tokai Tokyo Financial Holdings, Kiatnakin Phatra Financial Group and Hanwha Asset Management.

Regulated by the Monetary Authority of Singapore, ADDX uses blockchain and smart contract technology to tokenise and fractionalise private market opportunities such as pre-IPO equity, private equity and hedge funds, as well as bonds, reducing minimum investment sizes from US$1 million to US$10,000.

The new shareholders will partner with ADDX on specific projects that will help the exchange expand into new business areas, geographies or market segments. Several strategic initiatives by ADDX will also benefit from the fresh capital, including the recent launch of private market services for wealth managers, dubbed ADDX Advantage

Oi-Yee Choo, CEO of ADDX, says: “The new shareholders aren’t just capital partners, but strategic partners too. They have much to contribute in the form of expertise, ideas, market experience and business networks, and ADDX looks forward to adding value to their businesses in return.

“SET is the second stock exchange to join as an investor after SGX, and this is part of a larger global trend over the past two years of exchanges joining forces in a new capital market landscape that emphasises continuity between the public and private markets.”

Elliptic Announces Investment From J.P. Morgan to Accelerate Safer Participation in Crypto Markets

NEW YORK and LONDON, May 26, 2022 – Elliptic, a global leader in cryptoasset risk management, today announced J.P. Morgan as an additional investor as part of its recent $60 million Series C funding round led by Evolution Equity Partners and including SoftBank Vision Fund 2, AlbionVC, Digital Currency Group, Wells Fargo Strategic Capital, SBI Group, Octopus Ventures, SignalFire and Paladin Capital Group. 

This investment will help accelerate Elliptic’s global expansion and further enable financial services market institutions to embrace the crypto opportunity with increased trust and confidence. Elliptic serves traditional financial institutions, fintechs, crypto businesses and government agencies with a leading suite of compliance and investigative solutions built specifically for cryptoassets.

Elliptic’s blockchain compliance product can support more than 500 crypto assets, or more than 98% of all cryptoassets by market cap. Furthermore, two thirds of crypto volume worldwide is transacted on exchanges that use Elliptic solutions.

Simone Maini, Elliptic CEO, said: “As an asset class, crypto has grown by more than 10x over the last five years and is now worth more than $1 trillion. A potential further 10x of growth lies ahead — and will be driven by businesses keen to shape the future of finance. We are focused on enabling the opportunity to help organizations unlock the true value of crypto.

“As more established financial institutions move into the sector, these companies need to understand when they can let transactions run — and when they should intervene. Stopping financial crime is not just a regulatory requirement but an ethical one, and a safe ecosystem is a healthy ecosystem.”

Protego Trust Bank targets $2 billion valuation after quietly raising $70 million

Quick Take

  • Protego’s $70 million Series A round drew investment from a host of major crypto players, including the investment arms of Coinbase, FTX, Avalanche and Solana.
  • It is now in the early stages of putting together a Series B round that would value the startup at close to $2 billion.

Protego Trust Bank, a chartered crypto bank advised by Brian Brooks, raised $70 million from a host of crypto heavyweights last year and is now in the early stages of another funding round that would value the company at nearly $2 billion.

Investors in the $70 million Series A fundraise — which closed quietly in 2021 — included the investment arms of FTX, Coinbase, Algorand, Avalanche, Cardano, Ripple and Solana, as well as Digital Currency Group, NYCA Partners and Reciprocal Ventures, according to people familiar with the matter.

FinTech Clear Street Closes $165 Million Series B Funding Round to Improve Access to Capital Markets

NEW YORK, NY / ACCESSWIRE / May 24, 2022 / Clear Street, a fintech building better access to capital markets, announced today the completion of a $165 million Series B round to accelerate launching its platform. The round was led by Prysm Capital, LLC, a growth equity firm that partners with disruptive, category-leading companies in the technology, consumer, and healthcare sector. Additional investors included NextGen Venture Partners, Walleye Capital, Belvedere, NEAR Foundation, McLaren Strategic Ventures, and Validus Growth Investors, as well as angel investors, Illia Polosukhin (founder of NEAR), Moses Lo (founder of Xendit), and Alastair Trueger (Event Horizon Ventures).

Launched in 2018, Clear Street’s mission is to build better infrastructure to improve market access for all participants. The firm started with a prime brokerage platform for institutional investors. With this additional capital, Clear Street will be able to expand its capabilities to serve fintechs, market makers, and professional traders.

“We founded Clear Street to replace the outdated tech infrastructure being used across capital markets,” said Chris Pento, Co-Founder and Chief Executive Officer at Clear Street. “It shouldn’t take six months to open an account or a year to begin trading a new asset class. Clients are demanding better technology and better service. Clear Street is stepping up to address this issue head-on. Our cloud-native platform provides the services and data that investors need to compete in today’s markets.”

Sachin Kumar, Co-Founder and Chief Technology Officer added, “We started with prime brokerage, an area where we had experienced the frustrations caused by operating on outdated technology first-hand. As we built out prime services, we realized that 80% to 90% of the infrastructure used to service prime brokerage customers is the same infrastructure used by other market participants, like fintech app developers or market-makers. We’ve focused heavily on creating platforms that are API-first, such as clearing, settlement and custody, so that we can scale to other parts of the market.”

The Series B round marks Clear Street’s first venture capital raise since inception and brings its valuation to $1.7 billion. Since the beginning of 2021, Clear Street experienced a 220% increase in financing balances, and 510% growth in equity transactional volume. Today, Clear Street’s architecture processes more than $3 billion in daily trading volume.

Viola Credit Closes $700M for its Alternative Lending Income Funds

Leading global credit asset manager has deployed to date over $1.1B in structured, asset backed loans to FinTech companies disrupting traditional financial markets

TEL AVIV, Israel, May 26, 2022 /PRNewswire/ — Viola Credit, a global alternative credit asset manager providing customized credit solutions to technology companies and FinTech lenders, announced the final closing of the Viola Credit Alternative Lending Income Fund II (ALF II) with $700 million of investable capital including its flag ship fund and related managed accounts. ALF II will follow the strategy of its prior vintage and will provide minimally dilutive asset-based lending capital solutions to emerging and established global FinTech, PropTech, and InsurTech companies that are disrupting traditional financial markets.

The FinTech sector gained significant momentum in 2021 with global FinTech funding reaching a record $132B and the global FinTech unicorn count hitting 235, up 108% from 2020. Financial markets are undergoing digital transformation giving rise to non-bank and alternative lending companies and in 2021 alone, FinTech Lenders originated in excess of $120 billion in loans.

ALF II will continue to enjoy its robust network and deep long-standing relationships with the technology ecosystem to provide asset backed lending transactions for FinTech platforms to scale their origination business. The fund will partner with FinTech platforms across the US, Western Europe, UK, Australia, and New Zealand that disrupt traditional lending sectors. As of the final close, the fund has already called more than 40% of its capital commitments and plans to partner with 13-15 additional Fintech platforms.

Singapore’s 1982 Ventures closes oversubscribed debut $20M Southeast Asia FinTech fund

1982 Ventures, a Singapore-based early-stage venture capital firm, on Thursday announced the final close of its debut seed fund with over $20 million in committed capital.

The fund was heavily oversubscribed as 1982 Ventures was targeting to raise a total corpus of $15 million, 1982 Ventures said in a statement.

“We are accelerating our pace of investments despite current market sentiment. Early-stage Southeast Asia FinTech remains the most attractive sector for venture capital,” said Herston Elton Powers, Co-Founder and Managing Partner of 1982 Ventures.

Established in early 2020, 1982 Ventures has led and invested in 25 startups across Southeast Asia, Pakistan and Bangladesh. The fund has a core focus on seed stage fintech startups in Southeast Asia.

By the end of 2021, 1982 Ventures’ portfolio had made a return of nearly 3 times, with first round investments in Brick, Infina (YC S21), Homebase (YC W21), Wagely, Go Zayaan, Lista, Bluesheets, and Monit, among many others.

Their first fund has been backed by global venture capitals, institutions, corporates and family offices. Notable investors in 1982 Ventures debut fund include the family office of one of Indonesia’s largest conglomerates, Indonesia’s Trihill Capital, United States fintech unicorn Carta, Asia’s leading multinational Genting Group’s Venture arm, United States fund of funds First Close Partners and rali cap.