[podcast] Investing in growth-stage fintech with Long Ridge’s Kevin Bhatt

investing in growth stage fintech
Long Ridge's Kevin Bhatt talks about investing in fintech
Long Ridge’s Kevin Bhatt

This episode is another in an ongoing series on this show where we talk to some of the leading investors in the financial technology space.

This week’s guest provides an interesting perspective we haven’t really heard from yet — Kevin Bhatt is a partner at Long Ridge Equity Partners. He and his firm are growth stage investors — typically coming in a bit later in a company’s growth cycle than some of our other guests on the Tradestreaming Podcast: guys like Phin Upham of Thiel Capital, Caribou Honig of QED, Charles Moldow of Foundation Capita and Canaan’s Dan Ciporin .

Those guys are frequently the first institutional capital into a young company while Kevin’s firm comes in after a company has a product with traction in the market and is generating millions of dollars of revenue.

Below are lightly edited and condensed highlights from the conversation.

The fintech investment thesis

“The financial services sector is uniquely positioned to take advantage of technology. The incumbent players perpetually need to adopt new technologies to remain competitive and relevant to their customers. We’ve seen innovative high-growth companies with technology-enabled solutions command really attractive valuations either from public markets or trade-buyers on the back end.”

Why B2B fintech is more attractive than B2C

“One consideration with investing in financial services is its cyclicality. We’ve been heavily focused on B2B enterprise companies over the past several years and think that’s a very attractive place to be. Based on where we are within the economic cycle, you can tailor a portfolio and invest accordingly. We have a strong belief that as companies service and sell to others in the sector, that’s a sustainable business model that retains value through economic cycles.”

Insurance is ripe with investment opportunities

“Insurance is ripe for continued innovation and investment. As a sector, insurance has been a little slower to adopt some of the game changing technologies and business models that have shifted the discussion in other segments.

“There are a whole bunch of things we’re looking at that are focused on how the interaction between carriers and brokers works, how do you think about more efficient information transfer between carriers and some of the service providers that are a critical part of the ecosystem. We think it’s a space that over the next few years will see a lot of innovation.”

How good investors help fintech firms

“We do take board seats in all our companies. We’re not operators and aren’t involved in day-to-day decisions. But we are involved in strategic decisions and, more importantly, in the process of professionalization that almost all of growth-stage fintech companies go through.

“Very often, when entrepreneurs decide to partner with Long Ridge, they’re looking for a perspective on how to take a company and professionalize it: to take a company that’s doing, say, $10 million in revenue, and grow it to $50 million and to make it the type of business that has the internal infrastructure to be acquired by a leading player in the space or IPO.”

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[podcast] Thiel Capital’s Phin Upham on investing in tomorrow’s financial giants

Phin Upham of Thiel Capital on investing in fintech

We’ve been conducting a bit of a series here on the podcast. We’ve been talking to some of the top fintech investors around. Guys like Caribou Honig of QED, Charles Moldow of Foundation Capital. Last week, we interviewed Canaan’s Dan Ciporin. We’ve been listening and learning how these investors size up opportunities in early stage finance companies and what they’re looking for next to add to their portfolios.

Phin Upham of Thiel Capital on investing in fintech
Thiel Capital’s Phin Upham

Next up, we’ve got Phin Upham. Phin is a principal at Thiel Capital, famed-fintech investor Peter Thiel’s investment office. Peter is a renown entrepreneur (founded PayPal and Palantir) and an equally talented investor. Phin’s experience helping to deploy Peter’s capital and his own has given him a ringside seat into identifying, investing, and growing some of today’s top fintech firms (names that include SoFi, OnDeck, and Avant). Phin’s perspective on his own and Thiel’s investment mandate is really interesting. Also, I was blown away about the student loan market and the opportunity it provides for new technology-driven entrants.

We discuss whether many of the unicorns he’s invested in are truly revolutionary or merely evolutionary, migrating existing businesses online. We chat about where the financial industry is headed and where the opportunities are for innovation. I’m confident you’ll really appreciate my conversation with Thiel Capital’s Phin Upham.

Phin just wanted it to be clear that his comments are his own and aren’t necessarily representative of his firm.

Listen to the FULL episode

In this episode of the Tradestreaming podcast, we cover:

  • why he and his firm have invested in fintech firms like SoFi, OnDeck Capital, and Avant
  • the one question he asks prospective entrepreneurs before he makes an investment
  • SoFi’s positioning and why the firm started lending with a student loan product
  • how a student loan offering forms a long term customer in a way that isn’t being addressed by other marketplace lenders
  • why Phin thinks the opportunity for disruption in financial services comes in super-prime or sub-prime flavors
  • Peter Thiel’s theory of building in competitive margins to a startup as a form of innovation
  • how SoFi is an inherently different firm than LendingClub
  • the challenge of customer acquisition for fintech companies and some ways to address the challenge of building a customer base
  • whether Phin would invest in SoFi again
  • the parts of the finance industry that he’d stay away from and where he still sees opportunity
  • whether fintech is revolutionary in nature or just a set of new players doing the same, old things

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3 key pieces of advice to build a fintech startup from a leading investor

SenaHill's investing philosophy for investing in financial services

Building a financial services firm from the ground up is hard. There are all the vagaries of building a business from scratch: hiring the right people, finding the proper product/market fit, building a brand, and acquiring customers. But, for fintech startups, there are also the specific struggles of competing in the financial sector. Regulation requires firms to tightrope their growth and operations. Sure, there’s $1 trillion up for grabs in the financial services marketplace, but compared to other industries, it’s a long and expensive process to acquire new customers.

Around $12 billion of venture capital flowed into upstart financial services firms in 2015. The growing investing interest in early-stage fintech firms has compelled many generalist investment firms to dabble in the industry. But they’re only a handful of firms that live and breathe this stuff and are entirely focused on the sector. SenaHill is one of those firms.

The firm was founded by Neil DeSena (built Goldman Sachs’ industry-leading multi-asset trading system, REDI) and Justin Brownhill (founder and CEO of The Receivables Exchange, the first-to-market, real-time online institutional marketplace for the purchase and sale of working capital). SenaHill is a merchant bank which means it essentially provides 2 services: investment banking and principal investing. The firm doesn’t have outside limited partners, which means it invests its own partners’ capital.

Kyle Zasky, a partner at the firm, offers 3 tips to entrepreneurs making a go at building the next generation Goldman Sachs, BlackRock, or CNBC.

Find partners with real experience: Building a company in financial services comes with its own challenges. Zasky sees lots of entrepreneurs who have a sound product and strategy but just don’t quite understand how the finance industry works. “Founders need to do a lot of things right, including getting in front of the right partners,” Zasky told Tradestreaming. “In financial services, getting the right anchor clients is key.” Zasky should know — like all the partners at SenaHill, he’s an entrepreneur at heart. In 1995, at the age of 23, he launched his own electronic brokerage, EdgeTrade. 12 years later he sold his firm to Knight Capital.

So, Zasky and his SenaHill partners focus on their collective backgrounds when talking to young firms trying to make a dent in financial services. He encourages fintech startups to find investment partners who have large rolodexes and are willing to put in the hard work for their portfolio companies. “I almost feel like I have the same commitment to the 5 or 6 portfolio companies in my portfolio as I did to my own company when I was an entrepreneur,” he remarked.

Identify and hire the right people: Hiring people at early stage financial services firms is particularly hard: they’re in high demand and Zasky thinks most millennials would rather work at Facebook or Google than on Wall Street. Hiring is such an acute problem that SenaHill actually invested in a firm, untapt, that bills itself as something like an eHarmony for technologists and the finance companies looking to hire them. The firm’s platform takes programmers’ skills and via an algorithm, tries to match them to the skillsets required at hiring firms. When Zasky met the firm, he liked the business, liked the scalability, and because they were targeting fintech, he felt his firm had the connectivity to know the right people at banks and broker dealers. “You don’t have to work for Facebook to have a fulfilling career,” he remarked.

Work with a lifecycle investor: Every investor has his or her own model. Some are early stage and turn over the reins to a larger institutional investor later in a firm’s growth cycle. Others provide niche bridge financing. SenaHill’s Zasky says he gets in early and intends to continue supporting his portfolio companies down the road. That can come in the form of advising a portfolio company on a financing or putting more of his firm’s own money in. One SenaHill investment, Market Realist, appreciated this approach. The New York-based firm bills itself as the largest independent provider of ETF research along with comprehensive coverage of master limited partnerships, mutual funds, closed-end funds, real estate investment trusts, and 350 stocks of the S&P 500.

Michael Rodov, founder and CEO of the firm, said that he appreciated SenaHill’s MO. In his case, he looked to raise money from institutional investors shortly after completing a friends and family round for Market Realist. “When we had ups and downs, they’ve always been a great partner” he admitted. “When we had capital needs, SenaHill always stepped up to be a partner.”

For Rodov, this type of involvement was really important as he sought more investment as his firm grew. SenaHill also provided Market Realist with strategic partner introductions early on that helped launch the firm, which now services an audience of 800,000 investors. He’s been able to “lean heavily” on his investor, a firm he feels is respected widely. And that’s opened doors for him and Market Realist.

Photo credit: Engin Erdogan via Visualhunt / CC BY

The Startups: Who’s shaking things up (Week ending March 20, 2016)

fintech startups shaking things up

[alert type=yellow ]Every week, Tradestreaming highlights startups in the news, making things happen. The following is just part of this week’s news roundup. You can get these updates delivered direct to your inbox by signing up for the Tradestreaming newsletters.[/alert]

Startups raising/Investors investing

Future Finance raises $171m to grow its student loan platform in Europe (TechCrunch)
Future Finance — a startup based out of Dublin that provides loans to students — is today announcing a £119 million ($171 million) round of investment — £19 million in equity and £100 million towards future loans made through the platform.

Human capital investing platform, Cumulus Funding raises $36m (PYMNTS)
Cumulus Funding, a consumer finance company specializing in providing Income Share Agreements (“ISAs”) to individuals seeking a more flexible consumer finance alternative, has announced a major funding round today.

StanChart PE arm, Goldman invest $28 million in Vietnam mobile payments startup (Reuters)
A private-equity arm of Standard Chartered Plc and Goldman Sachs have invested a combined $28 million in Vietnamese startup M_Service, the operator of mobile e-wallet MoMo, the companies said in a joint statement on Thursday.

Online lending platform EZBob raises $28m (VentureBeat)
Online lending platform EZBob has raised £20m (about $28.3 million) in Series C funding in a round led by Leumi Partners and Oaktree Capital Management.

Next Insurance raises $13m to sell insurance to small businesses (VentureBeat)
Company founded by executives who sold Check to Intuit for $400m in 2014,Next Insurance announced a $13 million seed round led by Zeev Ventures.
The startup said that it plans to use the funds to launch its insurance sales platform for small businesses this spring — in a market in which “99 percent of small commercial insurance is sold offline through agents.”

Latin American P2P lender Afluenta banks $8m (Finextra)
Afluenta, the leading Latin America peer-to-peer lending network, announced an investment round from the International Finance Corporation (IFC), the private sector institution of the World Bank Group, and Elevar Equity, an impact venture capital firm.

InstaRem raises $5m to make overseas money transfers cheaper and faster in Asia (TechCrunch)
InstaRem, an international remittance payments startup headquartered in Singapore, has raised $5 million in a round led by Vertex Ventures.

Charting platform, ChartIQ raises $4m (Finextra)
ChartIQ, a leader in HTML5 financial charting for capital markets, announces that is has raised $4 million in a Series A investment, led by Illuminate Financial, with participation from existing investors ValueStream, Tribeca Angels and additional angel investors.

Real estate crowdfunding marketplace /software, CrowdStreet secures $3.5m (Crowdfund Insider)
Another real estate crowdfunding platform raises money. This time, it’s CrowdStreet.
“CrowdStreet has experienced incredible growth since launching its marketplace in 2014, which was complemented by our SaaS offering that debuted in May 2015. Our unique offering has attracted over 40 commercial real estate clients, with more than $1 billion in institutional-quality assets managed through the CrowdStreet platform.”

The Startups: Who’s shaking things up

DailyWorth, financial media co, launching female-focused roboadvisor (WealthManagement)
Advancements in technology may also be creating a shift in the other direction, with media companies becoming increasingly involved in providing financial services. One website, DailyWorth, is preparing to launch a new automated digital advice service called WorthFM.

OCC: Fintech firms inquiring about national bank charters (Banking Journal)
Several fintech companies—including one virtual currency firm—have made inquiries to the OCC about applying for national bank charters, American Banker reported this week, citing comments by OCC Chief Counsel Amy Friend at a recent fintech forum at George Washington University. Friend said firms could “be seeking the ‘regulatory umbrella’ of federal preemption of state rules,” since many are challenged by the number of state licenses needed to operate as nonbank lenders or money transmitters.

Crowdfunding platform, SyndicateRoom becomes IPO matchmaker with approval of London Stock Exchange (Business Weekly)
SyndicateRoom has become the first crowdfunding platform to join the public markets.
It has been granted intermediary status by the London Stock Exchange, allowing crowdfunding investors to participate in IPOs and placings on the UK’s main market and AIM.


The Startups: Who’s shaking things up (Week ending February 21, 2016)

fintech startups shaking things up

[alert type=yellow ]Every week, Tradestreaming highlights startups in the news, making things happen. The following is just part of this week’s news roundup. You can get these updates delivered direct to your inbox by signing up for the Tradestreaming newsletters.[/alert]

Startups raising/Investors investing

East Coast credit fund puts $250m to work on Patch of Land platform (Finovate)
An East Coast credit fund will invest $250 million across the Patch of Land platform.

Dallas-based StoneEagle raises $76m for payments system (Xconomy)
StoneEagle Services sells virtual “credit cards” for business-to-business payments to the healthcare and automotive industries, among others, digitizing traditional B2B payment processes.

Financial wellness firm, PayActiv raises $9m (Finovate)
Financial wellness specialist, PayActiv raised $9.2 million (lead by SoftBank). Read more.

Modo Payments closes on $2m in funding (Finovate)
Modo is a “shipping container for intermodal payments”. Read more.

Victory Park Capital taps Goldman exec for CIO role (FINalternatives)
Behind many of the $100m+ investment rounds sits Victory Park Capital (VPC), a provider of lending facilities for many of today’s top online lending startups. Former Goldman Sachs managing director Upacala Mapatuna has joined Victory Park as chief investment officer.

Visa reveals major stake in Square (Finextra)
Shares in Jack Dorsey’s Square received a much needed boost on Friday on news that Visa has a 9.99% stake of shares in the payments firm.

The Startups: Who’s shaking things up

$1 Billion Served: Venmo circa 2016 (Venmo)
Big milestone: In the month of January, over $1 billion in mobile payments were made via Venmo (2.5x year over year). Paypal’s P2P mobile/social payment provider has its sights set on B2C payments, too.

Citibank: Google should buy AIG and turn it into a fintech lab (BusinessInsider)
So why exactly does Citi think Google should buy this basket case? Could be really interesting, actually.

New app will help you manage all your credit cards (and plans to manage more of your financial life) (TechCrunch)
Curve, which has some notable investors, combines all your credit cards onto one physical card (similar to Coin). Curve’s been designed to plug into any payments system under the hood (today this is cards, but could be bank accounts or an online payment provider like PayPal) and has big plans for the future.

B of A’s Head of Tech Strategy joins tech startup (AmericanBanker)
Thomas had been B of A’s head of architecture and technology strategy and last week apparently joined Apprenda.

Insurance Disrupted: An insider guide to who’s doing the disrupting and how (Insurance Thought Leadership)
An inside look at the visions, culture and disruptive innovation accelerating the digital tipping point for insurance and the opportunities that creates for companies bold enough to become part of it.

[podcast] Why Foundation Capital’s Charles Moldow invests in B2C fintech companies

charles moldow investing in fintech
Charles Moldow, Foundation Capital
Charles Moldow, Foundation Capital

Last week, we had Caribou Honig of QED Investors on the podcast and I said that his portfolio is one of the strongest in fintech. If I had to name the top investors in the next generation of finance companies, Charles Moldow of Foundation Capital  would definitely be near the top of the list, as well. Charles joins us this week on the Tradestreaming Podcast to talk about his thesis behind why he likes to invest in a trillion dollar industry that, in his words, “doesn’t do a great job servicing its customer base”.

His white paper, A Trillion Dollar Market By the People, For the People is essential reading for anyone who wants to know about the marketplace lending space:  its size, structure, and potential. We’ll include a link in the show notes to it. His current portfolio includes auxmoney, BTCJam, Finxera (formerly Bancbox), LendingClub [IPO 12/11/14], Lending Home, Motif Investing, and On Deck Capital [IPO 12/17/14].

I think you’ll find my conversation with Charles to be thought-provoking — pay attention to why he prefers to build standalone B2C finance companies as opposed to firms that partner and sell into incumbent financial institutions. Contrarian and a very interesting point.

Listen to the FULL episode

In this episode, Charles shares:

  • his thesis on why he likes to invest in early stage fintech
  • why fintech has been relatively off the radar screen for many venture capitalists
  • his preference building B2C companies in the financial services space and why B2B firms have a hard go at it
  • how his white paper changed how we view peer to peer lending by renaming it the marketplace lending industry
  • why he turned down investing in Lending Club when he first met them in 2009 and why pulled the trigger in 2010 and invested
  • the struggles of matching supply and demand for a consumer financial marketplace
  • the challenges originally faced by OnDeck Capital and how the company solved them
  • the opportunity to market to millennials and the challenge the generation (with rising debt and weak wages) poses for financial firms
  • his view on the heating up of valuations in the fintech space
  • his firm’s interest in insurance and why it could be an exciting, investable space

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[podcast] QED Investors’ Caribou Honig on investing in today’s early stage fintech

fintech VC, QED Investors' Caribou Honig

Our guest for this episode is Caribou Honig, a founding partner of QED Investors. QED has quietly become one of the top investors in the financial technology space — their investment portfolio includes early big successes like SoFi and Prosper and also firms like LendUp, borro, Orchard, Avant Credit, blooom, and ApplePie Capital.

Caribou Honig, QED Investors
Caribou Honig, QED Investors

As part of our conversation, Caribou shares his personal path to how he ended up as part of the founding team of QED after a post-MBA career at Capital One where he developed a passion for data-driven marketing,, including responsibility for a $50 mm marketing budget, management of a 200 person underwriting operation, and cracking the code on digital credit card origination. This experience, along with his co-founders which include the founder of Capital One, provides a differentiator for the investment firm when it comes to deal flow and portfolio building.

In this episode, Caribou shares his views on:

  • his background running data-driven marketing at CapitalOne and how this impacts his firm’s approach to investing in early stage fintech
  • why “data-first” strategies are more likely to win
  • hist team’s 150 years of experience in consumer lending market and why it’s such an exciting sector right now
  • current trends in the financial technology space
  • how incumbent financial institutions view startups in the space
  • how these larger financial firms are planning for their futures
  • QED’s investment mandate and the types of fintech companies that fit well into the investment firm’s sweet spot
  • the companies in his portfolio and the investment thesis behind them
  • lastly, we’ll talk about where Caribou is looking to make investments in the future.

Listen to the FULL episode

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Fintech investor, Pascal Bouvier on where there’s big money to be made in fintech

Pascal Bouvier on fintech investing

Pascal Bouvier is an experienced fintech investor and joins Tradestreaming today to talk about his investments in the fintech space, how the market has changed over the past few years, and where this investor thinks the opportunities lie ahead. Follow Pascal on Twitter, LinkedIn, and his blog.

Who are you and what do you do?

Pascal Bouvier, fintech investor
Pascal Bouvier, fintech investor

I am a fintech investor who brings both operational and investment experience to the table. I have worked with large financial institutions as well as with startups and post-revenue small-sized businesses. I have also worked with technology and non-technology businesses. This uniquely positions me as an investor in early stage companies in the financial services industry.  Further, I do have a global background having worked on several continents, a requirement given the financial services industry is a truly global industry.

What’s your view of fintech and finserv and how has it changed?

I have developed an expansive model where finserv equals fintech, like it or not. By that, I mean all finserv participants will have to behave like technology companies going forward. This means they will have to stop creating products and pushing them in unilateral ways to consumers and users and they will have to start to focus on technology, data and in a broad sense, customer experience.

All participants will have to do so, whether they are startups or incumbents, large or small or service providers. This will have, and is already having, a profound impact on how the industry is organizing itself. Namely, the customer and his needs – be it an individual or a corporation – will need to be front and center as opposed to wha the financial institution thinks the customer needs. This is both a subtle and profound departure from past and current paradigms.

In many ways the industry will have to reorganize itself around customers’ lifetime events via contextually relevant services and move away from a product-centric approach. That is the greatest insight one can have as a fintech investor.

You have a very interesting work history, with experience on the operator side in software and other industries. How has this impacted your worldview of fintech as an investor?

I was a commercial banker which influenced my view on commercial credit. I worked as an operator with various early stage startups, as well as high growth post revenue SMBs, which helped me understand the reality of day to day tactical operations and long term strategic vision in a very material and tangible way.

I also have acted as an investor in the banking world and in the VC world. My fintech investment style has been heavily influenced by my learnings as an operator. Early stage investing is not purely informed by dry analysis and spreadsheets. It is informed by how one relates to individuals and teams and by how one understands how operational complexity grows as a startup grows and experiences traction. I believe this has made me a better investor.

Where’s your sweet spot for making an investment? What does your target investment look like?

Based on how I see the financial services industry evolving, I believe the most effective sweet spot at this point in time is to focus on seed, Series A, and Series B investments where the investment size ranges from $500k to up to $5m. I do like to go above $5m for exceptional investments. I like that flexibility.

From an operational point of view, this means I focus on startups that have a product or platform in use with customers, whether in beta or whether live, and whether pre revenue or post. I shy away from ideas or technology that has yet been productized. I focus on companies that are about to hit product/market fit or already have a strong sense of product/market fit and who are experiencing the first inklings of pipeline growth. Although my view is global in nature, I have lately focused on Europe and the US.

How do you compare consumer fintech opportunities with more B2B ones?

Speaking of the firm I recently left, the portfolio is evenly split between D2C and B2B. some of the D2C are really B2B2C plays.  As for my natural inclination, it really depends on the sector I look at.

The industry is comprised of five sectors: lending, capital markets, insurance, asset management, and payments. Given a particular geography and time for each of these sectors, I would be more attracted to D2C models, whereas this may change to B2B models otherwise. For payments, I prefer B2B by far, as getting traction in D2C payments is extremely difficult. In banking and insurance, I would prefer digitizing distribution channels which may mean D2C or B2B2C. For asset management or capital markets I would favor B2B models.

It really depends. Consumer plays are so much more difficult to hit just right that there is a natural comfort zone around B2B models, in my opinion.

What do you think is the most exciting investable part of fintech right now?

I will give several answers. First, insurance because the industry has barely been touched as of yet by disruption, so the opportunity is immense. Second, anything that has to do with identity management as applied to any of the five sectors comprising the industry. Third, and this is a new trend I am focusing much more on these days, financial wellness, which can be equally applied to the Western world as to emerging markets. Financial wellness is going to be huge in my opinion, as it sits at the intersection of the expectations of customers and a better stewardship of money, in general (not that I expect us to be completely weened from excessive consumerism mind you, but still I do expect changing times ahead).

What’s the most overdone part of fintech? Where are expectations too high in fintech investing?

It is always difficult to answer this question. So much depends on geography and timing. I would tend to answer that retail/consumer payments in the US is overheated and extremely crowded. “Digital” banking also seems to fall in that category. Finally, one particular model past its prime is pure retail roboadvisory in the wealth management space.

Startup Roundup: Marketplace lending up big, blockchain getting a lot of attention

fintech startups shaking things up

[alert type=white ]Every week, we write about fintech startups raising money, making partnerships, and generally disrupting finance.[/alert]

Wow, what a week.

Money 2020 has turned into a must-attend fintech event. Equity crowdfunding rules were announced on Friday –  creating utter chaos for some players and elation for others. Things are speeding up in fintech land as stock market holder ICE bought leading data provider IDC in a deal worth over $5B.

For more fintech coverage during the week, you’re going to want to connect with Tradestreaming on Facebook. Click here to do following Tradestreaming on Facebook.

OneVest Launches “1000 Angels” to Reinvent Venture Capital (Crowdfund Insider)
Tradestreaming Tearsheet: Onevest, a New York based investment crowdfunding platform focused on funding start-up entities, has announced the launching today of its new “1,000 Angels, the “world’s largest digital-first, invitation-only investor network”.

$1 Billion In Small Business Loans From PayPal (PYMNTS.COM)
Tradestreaming Tearsheet: PayPal used to be all about processing payments instead of handling funds, but if you’re not growing in this business, you’re dying. PayPal is serious about growing its SMB loan business and seems to be positioned well to continue attracting new business borrowers.

Can This Startup Restore Privacy in Payments and Turn a Profit? (American Banker)
Tradestreaming Tearsheet: Privacy.com is catching the attention of many finance professionals (including some smart fintech investors) as a creative security platform that’s building its business by protecting transaction privacy. In the Edward Snowden era, it will be interesting to see if the startup can build a business with its revenue model (taking a cut on interchange fees around a transaction).

Bizfi Originates $127M in Financing in Q3 2015 (BusinessWire)
Tradestreaming Tearsheet: Bizfi, a fintech platform that combines aggregation, funding and a participation marketplace for small businesses had a very good quarter, reporting $127M in business financing during Q3 2015.

ReadyForZero launches credit monitoring product (ReadyForZero)
Tradestreaming Tearsheet: Following CreditKarma’s success in providing credit tools, personal finance manager (PFM), ReadyForZero launches its own credit monitoring tool.

Groundfloor Announces Three New Tools to Expand Peer-to-Peer Real Estate Lending (Crowdfund Insider)
Tradestreaming Tearsheet: On Monday during the Money2020 conference, real estate lending marketplace Groundfloor introduced three new analytic tools that allow peer-to-peer real estate investors greater flexibility and analysis over security selection and portfolio management.

Digital Asset Holdings Acquires Blockchain-as-a-Service Innovator, Blockstack.io (Finovate)
Tradestreaming Tearsheet: “Miron Cuperman, Blockstack CTO, called Digital Asset “the best platform” to deliver Blockstack’s blockchain application development tools as part of a comprehensive solution for customers. Digital Asset Holdings CEO Blythe Masters praised both Blockstack’s technology as well as its talent, calling Cuperman “a renowned pioneer in the blockchain world.””

Lending Club Reports Q3 Results. Loan Originations Jump 92% Year-over-Year (Zacks)
Tradestreaming Tearsheet: Lending Club (NYSE: LC), the largest marketplace lending platform in the US, has announced Q3 results. And the origination growth is silencing some of the biggest critics of the first marketplace lender to float on public markets.

Startups raising money this week

Spreedly Raises $2.5 Million in New Funding (Finovate)
Tradestreaming Tearsheet: Spreedly helps marketplaces and platforms accept a wider range of payment types while reducing cost, complexity, and compliance burden.

Zebit Secures $10M investment; Launches Zero-Interest Credit to the Underserved (LetsTalkPayments)
Tradestreaming Tearsheet: The credit can be used to make purchases from the Zebit Market or directly from retailers that accept Zebit as a checkout option.

Issuer processor platform Marqeta closes $25m funding round, new customers (Finextra)
Tradestreaming Tearsheet: At Money20/20 2015, Marqeta, the Open API issuer processor platform, announced a host of new marquee customers, including Affirm, DoorDash, HyperWallet and Kabbage, alongside known customers such as Facebook, Bento for Business and Perk. Marqeta also confirmed closing a $25 million Series C round.

New breed of financial startup

Really interesting financial startups are popping up everywhere.  Most of what I’m seeing falls into a few different buckets

  • sentiment analysis: the ability to take social media’s temperature on a certain stock, certain market and forecast future price movements.
  • personalized recommendations: for years, the financial community got away with giving generalized information.  Now, it’s getting granular.
  • portfolio replication: lots of new tools, platforms that allow you to essentially program your investing activity to mimic another investor, a strategy, or an algorithm

I’m compiling this list of some of the best cutting-edge financial startups.  What do you think?

Continue reading “New breed of financial startup”