#InsurTech / Venture fund FinTLV raises $120 million to hunt for the next insurtech unicorns

FinTLV will invest in the next wave of growth-stage insurtechs following its successful backing of unicorns in 2020.

FinTLV will likely focus funds on insurtechs embedding their offering into partners’ platforms and insurtechs that tackle coverage gaps.

Embedded insurance, in which nonfinancial firms integrate insurance products, will be a major insurtech trend of the next decade. Embedded insurance is expected to create over $3 trillion in market value within the next 10 years-and venture funds such as FinTLV will want to get a piece of this action. FinTLV stated that successful insurtechs must “establish relationships with other players in the insurance ecosystem” … Insurtechs that facilitate or make use of embedded insurance will therefore likely present attractive funding opportunities, as it eases partnerships between insurtechs, insurers, and nonfinancial platforms.


#BNPL #InsurTech / Buy now, pay later and insurtech saw increase in funding

Globally “buy now, pay later” (BNPL) fintech startups raised record funding in 2020 and insurtech companies saw a big bump in fundraising in the second half of 2020.

Alex Kern, intelligence analyst at CB Insights said he was surprised to see how much fundraising and deal activity was occurring in the BNPL industry because when a consumer is at checkout while shopping online there’s only so much room for different BNPL options, since a consumer doesn’t want to see numerous different BNPL options.

… In recent BNPL news, Klarna shared that it is seeing “tremendous momentum in the US, including a record 15 million customers overall to kick off 2021.” In 2020, the company more than doubled the total number of users in the United States to 15 million. More than 1 million US customers have joined Klarna each month since October 2020.

Meanwhile, in the insurtech world, Metromile announced that Ryan Graves plans to make a $50 million investment in the company both personally and through his investment firm Saltwater. Graves was formerly senior vice president of global operations Uber Technologies.


#PFM / Inside personal finance app Albert’s ‘Genius Bar’

Personal finance apps like Albert tout a future where money management happens automatically with minimal human intervention. Bill payments, savings, investing, you name it – everything just happens in the background, while consumers focus on living their lives.

[Albert] … makes team members called “geniuses” available to its 5 million customers 12 hours a day, 7 days a week. The company… is on a mission to move past the familiar refrain of “set it and forget it” to an automated financial life that’s supplemented by tailored advice from its team members.

[Founder:] “It’s important to automate as much as possible [but] you also need the customer to be involved… If you truly set it and forget it [for all financial use cases], it turns into burying things under the rug.”

The Albert app, which was launched in 2016, offers customers capabilities to automate savings and investing. Other features include earned wage access and insurance.

Albert was an early mover in a personal finance field that has exploded in recent years. For instance, large banks like Bank of America, JPMorgan Chase, Royal Bank of Canada and TD Bank have launched their own digital personal finance and investing capabilities. But Albert strives to differentiate itself by offering human assistance alongside automation capabilities typical of nonbank financial apps.

Like other personal finance and investing apps – including Digit, Qapital, Acorns, Stash and many others – Albert aims to become a focal point for most of its customers’ financial needs… In addition to human advice, the Albert app offers customers automated personal finance guidance…

For saving, Albert lets customers set aside money at regular intervals, or customers can allow the app to analyze transactions and automatically move money into a savings bucket.

“You can enable what we call smart saving, which lets the user put it on autopilot … or if you want more control, you can set different schedules… We find that most customers like the smart savings feature and they just want to put it on autopilot.”

For investments, the company, which has a broker-dealer license, offers portfolios that are based on customer goals, risk tolerance and desired time horizon. Albert also lets customers select holdings from a curated list of themes.


#BNPL / Klarna adding one million new customers each month

For the uninitiated, Klarna empowers shoppers with flexible payments solutions with retailers like Lenovo, Macy’s, Footlocker, Etsy, and thousands of other stores across multiple categories. Users can leverage buy-now-pay-later capabilities with four interest-free payments and no credit impact via the company’s instant approval process.

The company also leverages a rewards points system that allows consumers to accumulate points for gift cards… Klarna’s BNPL capabilities and loyalty program are proving to be valuable operational drivers in the company’s pursuit of outsized growth and a looming initial public offering. The company shared that it is seeing “tremendous momentum in the US, including a record 15 million customers overall to kick off 2021.”…

The Klarna app is also driving massive user engagement, with 3.5 million monthly active users as of the end of December, an increase of 204% year over year. The app averaged 60,000 new daily downloads in December and was among the top 10 most downloaded shopping apps in the US during Q4 2020…


#BankTech / Fair, a neobank and financial services platform, raises $20 million

Fair, a neobank and financial services platform, is set to launch nationwide in April to provide its banking, lending, investment and retirement services.

The funding will mostly be used for marketing, public relations and continued technological development… Other recently launched neobanks and banking platforms like Jiko and Oxygen have dedicated their seed and series A capital to making key hires, scaling technical teams and to support rigorous R&D.

Parekh is the founder, chairman and CEO of Houston-based technology and private equity firm Amsys Group. He explained that he founded Fair to have a platform that has pro-consumer equity-based financing that will offer equity-based lending for home, auto and business. The company is a mobile-first alternative that has features including free international money transfers, an up to two percent annual dividend account and is launching a “buy now, pay later,” feature.

“What really differentiates us from the competition, [is that] there is no competition. That’s how I always positioned ourselves – Fair does not have competition, because Fair is not a one trick pony… We have a whole suite of 13 products that we are going with. We are different.”


#PayTech / QR codes gain momentum as consumers demand socially distanced payments

It’s a fintech example of everything old becoming new again. The QR code – a technology first used in 1994 by the Japanese automotive industry – will reign as one of this year’s top ten fintech trends…

A recent study by Juniper Research forecasts the number of global users of QR code payments will exceed 2.2 billion in 2025, up from 1.5 billion in 2020. The 2025 figure would represent nearly 30% of the world’s mobile phone users. Juniper Research estimates the global market for QR code payments will exceed $2.7 trillion in 2025.

PayPal and PayPal-owned Venmo are propelling the rollout of QR code payments in the U.S. In November, they introduced QR code payment capabilities at more than 8,200 standalone CVS pharmacies across the country. CVS is the first national retailer to offer QR code payments through PayPal and Venmo.

At CVS, a customer can pay by opening either the PayPal or Venmo mobile app, then clicking the “scan” button and selecting the “show to pay” option. PayPal customers can pay with stored debit or credit cards, bank accounts, a PayPal balance or a PayPal credit line. With Venmo QR codes, customers can pay with stored debit or credit cards, bank accounts, a Venmo balance or a Venmo credit card. The customer pays no fees for using this payment method.


#PropTech #RentToBuy / Divvy Homes secures $110M Series C to help renters become homeowners

Divvy Homes – a startup that is out to help more people realize that dream by buying a house and renting it back to them while they build equity – has just closed on $110 million in Series C funding.

Divvy claims to be different from other real estate tech companies in that it aims to digitize “the archaic, data-heavy processes buyers encounter along the way.” It works with renters who want to become homeowners by buying the home they want and renting it back to them for three years “while [they build] the savings needed to own it themselves.”

Rather than buy homes and look for renters, the company does the opposite. Customers pick out a home and Divvy purchases it on their behalf with the renter contributing an initial 1-2% of the home value. They move in at closing, and pay one monthly amount. Part of that money is a “market-rate” rent and about 25% goes toward building up their savings in the house so they can put a down payment (estimated at 10% value of the home) on to purchase from Divvy later. The renters can choose to cash out their equity or purchase the home before the three years are up, if they choose. They also have the option to re-up their contract if needed, to take a bit longer to save up for a larger down payment.

While Divvy’s mission involves wanting to make homeownership more accessible… it’s a lucrative business model as well.

Looking ahead, Divvy plans to use its fresh capital in part to expand to more markets… But ultimately, Divvy wants to “create a complete end-to-end experience,” from providing realtors to serving as a lender… “That’s our bigger vision… We’re not there yet.”


#PropTech / Digital servicer Valon snaps up $50M in Series A round

Digital mortgage servicer Valon (formerly known as Peach Street) announced on Tuesday it picked up $50 million in a Series A funding round spearheaded by venture capital heavyweight Andreessen Horowitz.

Founded in 2019 and marketed as a mobile-friendly servicer, Valon allows borrowers to make payments, view balances, request information and manage escrows through its cloud-based platform. It also allows lenders to request API data feeds and view borrow performance.

The software is built on Kubernetes, an open-source automation platform designed by Google and a familiar program to Valon co-founders Andrew Wang and Eric Chiang, who had both previously worked for the internet search giant…

According to a spokesperson for Valon, the company operates as a competitor to tech giant Black Knight, whose technology is used by the servicers of roughly half of all U.S. residential loans.

Lead investor Andreessen Horowitz has made big bets on housing-related startups before. It’s a big investor in proptech giants like AirBnB and Flyhomes and smaller startups like Brazil-based housing marketplace Loft.


#BankTech / Fintech startup Narmi closes $20.4m

Narmi works with financial institutions and builds enterprise solutions that span consumer digital banking, business banking and digital account opening…

Narmi’s co-founders built the company after they saw that many financial institutions, such as regional/community banks and credit unions, had technology that “for lack of a better word, sucks… It doesn’t move the needle for their customers… It’s clunky. It’s antiquated, the user experiences old, it struggles to attract and retain millennials or at least that next generation of banking, it doesn’t generate ROI. Everything that you would want as a bank or credit union, it doesn’t do…”


#OpenBanking #LendTech / UK fintechs Token and Tradeteq get investment

Open banking payments platform Token and trade finance tech specialist Tradeteq have landed $15 million and $9.4 million, respectively.

[Token:] “The capital enables Token to continue driving the shift from traditional payment methods to account-to-account payments by providing the fastest and simplest path to adoption for large merchants, PSPs and banking-as-a-service platforms.”

Its use cases include funding an account, paying-off a credit card, paying a utility bill and other one-off payments, accounting package integration, credit risk analysis and cash flow management.

Tradeteq, an electronic trading platform targeting the $15 trillion trade finance market, has raised $9.4 million. “Tradeteq is designed around the needs of originators and institutional investors”, it states on its website. “No more manual, error-prone processes, no more spreadsheets, no more cumbersome data aggregation.”

Tradeteq’s platform underpins the Trade Finance Distribution (TFD) Initiative, launched in 2019 to use technology and standardisation for the wider distribution of trade finance assets. The initiative is backed by 14 banks from across the globe, including ANZ, Crédit Agricole CIB, Deutsche Bank, HSBC, ING, Lloyds Bank, Rabobank, Standard Bank, Standard Chartered Bank and Sumitomo Mitsui Banking Corporation.