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Amount raises $99M at a $1B+ valuation to help banks better compete with fintechs
Amount, a company that provides technology to banks and financial institutions, has raised $99 million in a Series D funding round at a valuation of just over $1 billion.
WestCap, a growth equity firm founded by ex-Airbnb and Blackstone CFO Laurence Tosi, led the round. Hanaco Ventures, Goldman Sachs, Invus Opportunities and Barclays Principal Investments also participated.
Notably, the investment comes just over five months after Amount raised $86 million in a Series C round led by Goldman Sachs Growth at a valuation of $686 million. (The original raise was $81 million, but Barclays Principal Investments invested $5 million as part of a second close of the Series C round). And that round came just three months after the Chicago-based startup quietly raised $58 million in a Series B round in March. The latest funding brings Amount’s total capital raised to $243 million since it spun off from Avant — an online lender that has raised over $600 million in equity — in January of 2020.
So, what kind of technology does Amount provide?
In simple terms, Amount’s mission is to help financial institutions “go digital in months — not years” and thus, better compete with fintech rivals. The company formed just before the pandemic hit. But as we have all seen, demand for the type of technology Amount has developed has only increased exponentially this year and last.
CEO Adam Hughes says Amount was spun out of Avant to provide enterprise software built specifically for the banking industry. It partners with banks and financial institutions to “rapidly digitize their financial infrastructure and compete in the retail lending and buy now, pay later sectors,” Hughes told TechCrunch.
Specifically, the 400-person company has built what it describes as “battle-tested” retail banking and point-of-sale technology that it claims accelerates digital transformation for financial institutions. The goal is to give those institutions a way to offer “a secure and seamless digital customer and merchant experience” that leverages Amount’s verification and analytics capabilities.
Image Credits: Amount
HSBC, TD Bank, Regions, Banco Popular and Avant (of course) are among the 10 banks that use Amount’s technology in an effort to simplify their transition to digital financial services. Recently, Barclays US Consumer Bank became one of the first major banks to offer installment point-of-sale options, giving merchants the ability to “white label” POS payments under their own brand (using Amount’s technology).
“The pandemic dramatically accelerated banks’ interest in further digitizing the retail lending experience and offering additional buy now, pay later financing options with the rise of e-commerce,” Hughes, former president and COO at Avant, told TechCrunch. “Banks are facing significant disruption risk from fintech competitors, so an Amount partnership can deliver a world-class digital experience with significant go-to-market advantages.”
Also, he points out, consumers’ digital expectations have changed as a result of the forced digital adoption during the pandemic, with bank branches and stores closing and more banking done and more goods and services being purchased online.
Amount delivers retail banking experiences via a variety of channels and a point-of-sale financing product suite, as well as features such as fraud prevention, verification, decisioning engines and account management.
Overall, Amount clients include financial institutions collectively managing nearly $2 trillion in U.S. assets and servicing more than 50 million U.S. customers, according to the company.
Hughes declined to provide any details regarding the company’s financials, saying only that Amount “performed well” as a standalone company in 2020 and that the company is expecting “significant” year-over-year revenue growth in 2021.
Amount plans to use its new capital to further accelerate R&D by investing in its technology and products. It also will be eyeing some acquisitions.
“We see a lot of interesting technology we could layer onto our platform to unlock new asset classes, and acquisition opportunities that would allow us to bring additional features to our platform,” Hughes told TechCrunch.
Avant itself made its first acquisition earlier this year when it picked up Zero Financial, news that TechCrunch covered here.
Kevin Marcus, partner at WestCap, said his firm invested in Amount based on the belief that banks and other financial institutions have “a point-in-time opportunity to democratize access to traditional financial products by accelerating modernization efforts.”
“Amount is the market leader in powering that change,” he said. “Through its best-in-class products, Amount enables financial institutions to enhance and elevate the banking experience for their end customers and maintain a key competitive advantage in the marketplace.”
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Barclays adds itemised digital receipts to its banking app in partnership with fintech Flux
Flux, the London fintech that has built a technology platform for banks and merchants to power itemised digital receipts and more, has seen its lengthy pilot with Barclays bear fruit.
Announced formally today — but actually quietly rolled out a few months ago — Flux-powered digital receipts are now available as an opt-in for all U.K. Barclays debit card holders within the bank’s main mobile banking app. Previously, the functionality was only available within the Barclays Launchpad app, which is available for customers that want to try out experimental or upcoming features.
Early last year, Barclays announced that it has invested in Flux, taking a minority stake, so the strengthening of its partnership isn’t too much of a surprise. Flux also went through the Techstars-powered Barclays accelerator in its very early days. However, not all corporate accelerators lead to great outcomes as corporates are notoriously risk-adverse. This one certainly wasn’t rushed but it’s meaningful regardless, giving Flux a major shot in the arm in reaching mainstream banking customers beyond the existing challenger bank partnerships it has forged.
“Customers who pay using their Barclays debit card for future in store purchases at H&M, shoe retailer schuh and food outlets, which include Just Eat and Papa Johns, will see their receipts sent automatically to their app after making a purchase. They can then easily and securely view their receipts whenever they need by tapping on the transaction,” says Barclays. Crucially, although opt-in, Barclays customers will receive a prompt to set up digital receipts when they purchase items from retailers currently on-boarded to Flux.
Founded in 2016 by former early employees at Revolut, Flux bridges the gap between the itemised receipt data captured by a merchant’s point-of-sale (POS) system and what little information typically shows up on your bank statement or mobile banking app. Off the back of this, it can also power loyalty schemes and card-linked offers, as well as give merchants much deeper POS analytics via aggregated and anonymised data on consumer behaviour, such as which products are selling best in unique baskets.
On the banking side, along with Barclays, Flux has partnered with challenger banks Starling and Monzo. Once banking customers link their account to the service, Flux delivers digital receipts (and where available rewards and loyalty) for transactions at Flux retailer partners.
Longer term, Flux wants to become a standard for the interchange of item level digital receipt data — and the proprietary platform that powers that standard — but has always faced a chicken-and-egg problem: It needs bank integrations to sign up merchants and it needs merchant integrations to sign up banks. Barclays going live properly is another significant turn in the upstart’s flywheel.
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In the shadow of Amazon and Microsoft, Seattle startups are having a moment
Venture capital investment exploded across a number of geographies in 2019 despite the constant threat of an economic downturn.
San Francisco, of course, remains the startup epicenter of the world, shutting out all other geographies when it comes to capital invested. Still, other regions continue to grow, raking in more capital this year than ever.
In Utah, a new hotbed for startups, companies like Weave, Divvy and MX Technology raised a collective $370 million from private market investors. In the Northeast, New York City experienced record-breaking deal volume with median deal sizes climbing steadily. Boston is closing out the decade with at least 10 deals larger than $100 million announced this year alone. And in the lovely Pacific Northwest, home to tech heavyweights Amazon and Microsoft, Seattle is experiencing an uptick in VC interest in what could be a sign the town is finally reaching its full potential.
Seattle startups raised a total of $3.5 billion in VC funding across roughly 375 deals this year, according to data collected by PitchBook. That’s up from $3 billion in 2018 across 346 deals and a meager $1.7 billion in 2017 across 348 deals. Much of Seattle’s recent growth can be attributed to a few fast-growing businesses.
Convoy, the digital freight network that connects truckers with shippers, closed a $400 million round last month bringing its valuation to $2.75 billion. The deal was remarkable for a number of reasons. Firstly, it was the largest venture round for a Seattle-based company in a decade, PitchBook claims. And it pushed Convoy to the top of the list of the most valuable companies in the city, surpassing OfferUp, which raised a sizable Series D in 2018 at a $1.4 billion valuation.
Convoy has managed to attract a slew of high-profile investors, including Amazon’s Jeff Bezos, Salesforce CEO Marc Benioff and even U2’s Bono and the Edge. Since it was founded in 2015, the business has raised a total of more than $668 million.
Remitly, another Seattle-headquartered business, has helped bolster Seattle’s startup ecosystem. The fintech company focused on international money transfer raised a $135 million Series E led by Generation Investment Management, and $85 million in debt from Barclays, Bridge Bank, Goldman Sachs and Silicon Valley Bank earlier this year. Owl Rock Capital, Princeville Global, Prudential Financial, Schroder & Co Bank AG and Top Tier Capital Partners, and previous investors DN Capital, Naspers’ PayU and Stripes Group also participated in the equity round, which valued Remitly at nearly $1 billion.
Up-and-coming startups, including co-working space provider The Riveter, real estate business Modus and same-day delivery service Dolly, have recently attracted investment too.
A number of other factors have contributed to Seattle’s long-awaited rise in venture activity. Top-performing companies like Stripe, Airbnb and Dropbox have established engineering offices in Seattle, as has Uber, Twitter, Facebook, Disney and many others. This, of course, has attracted copious engineers, a key ingredient to building a successful tech hub. Plus, the pipeline of engineers provided by the nearby University of Washington (shout-out to my alma mater) means there’s no shortage of brainiacs.
There’s long been plenty of smart people in Seattle, mostly working at Microsoft and Amazon, however. The issue has been a shortage of entrepreneurs, or those willing to exit a well-paying gig in favor of a risky venture. Fortunately for Seattle venture capitalists, new efforts have been made to entice corporate workers to the startup universe. Pioneer Square Labs, which I profiled earlier this year, is a prime example of this movement. On a mission to champion Seattle’s unique entrepreneurial DNA, Pioneer Square Labs cropped up in 2015 to create, launch and fund technology companies headquartered in the Pacific Northwest.
Boundless CEO Xiao Wang at TechCrunch Disrupt 2017
Operating under the startup studio model, PSL’s team of former founders and venture capitalists, including Rover and Mighty AI founder Greg Gottesman, collaborate to craft and incubate startup ideas, then recruit a founding CEO from their network of entrepreneurs to lead the business. Seattle is home to two of the most valuable businesses in the world, but it has not created as many founders as anticipated. PSL hopes that by removing some of the risk, it can encourage prospective founders, like Boundless CEO Xiao Wang, a former senior product manager at Amazon, to build.
“The studio model lends itself really well to people who are 99% there, thinking ‘damn, I want to start a company,’ ” PSL co-founder Ben Gilbert said in March. “These are people that are incredible entrepreneurs but if not for the studio as a catalyst, they may not have [left].”
Boundless is one of several successful PSL spin-outs. The business, which helps families navigate the convoluted green card process, raised a $7.8 million Series A led by Foundry Group earlier this year, with participation from existing investors Trilogy Equity Partners, PSL, Two Sigma Ventures and Founders’ Co-Op.
Years-old institutional funds like Seattle’s Madrona Venture Group have done their part to bolster the Seattle startup community too. Madrona raised a $100 million Acceleration Fund earlier this year, and although it plans to look beyond its backyard for its newest deals, the firm continues to be one of the largest supporters of Pacific Northwest upstarts. Founded in 1995, Madrona’s portfolio includes Amazon, Mighty AI, UiPath, Branch and more.
Voyager Capital, another Seattle-based VC, also raised another $100 million this year to invest in the PNW. Maveron, a venture capital fund co-founded by Starbucks mastermind Howard Schultz, closed on another $180 million to invest in early-stage consumer startups in May. And new efforts like Flying Fish Partners have been busy deploying capital to promising local companies.
There’s a lot more to say about all this. Like the growing role of deep-pocketed angel investors in Seattle have in expanding the startup ecosystem, or the non-local investors, like Silicon Valley’s best, who’ve funneled cash into Seattle’s talent. In short, Seattle deal activity is finally climbing thanks to top talent, new accelerator models and several refueled venture funds. Now we wait to see how the Seattle startup community leverages this growth period and what startups emerge on top.
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OpenFin raises $17 million for its OS for finance
OpenFin, the company looking to provide the operating system for the financial services industry, has raised $17 million in funding through a Series C round led by Wells Fargo, with participation from Barclays and existing investors including Bain Capital Ventures, J.P. Morgan and Pivot Investment Partners. Previous investors in OpenFin also include DRW Venture Capital, Euclid Opportunities and NYCA Partners.
Likening itself to “the OS of finance,” OpenFin seeks to be the operating layer on which applications used by financial services companies are built and launched, akin to iOS or Android for your smartphone.
OpenFin’s operating system provides three key solutions which, while present on your mobile phone, has previously been absent in the financial services industry: easier deployment of apps to end users, fast security assurances for applications and interoperability.
Traders, analysts and other financial service employees often find themselves using several separate platforms simultaneously, as they try to source information and quickly execute multiple transactions. Yet historically, the desktop applications used by financial services firms — like trading platforms, data solutions or risk analytics — haven’t communicated with one another, with functions performed in one application not recognized or reflected in external applications.
“On my phone, I can be in my calendar app and tap an address, which opens up Google Maps. From Google Maps, maybe I book an Uber . From Uber, I’ll share my real-time location on messages with my friends. That’s four different apps working together on my phone,” OpenFin CEO and co-founder Mazy Dar explained to TechCrunch. That cross-functionality has long been missing in financial services.
As a result, employees can find themselves losing precious time — which in the world of financial services can often mean losing money — as they juggle multiple screens and perform repetitive processes across different applications.
Additionally, major banks, institutional investors and other financial firms have traditionally deployed natively installed applications in lengthy processes that can often take months, going through long vendor packaging and security reviews that ultimately don’t prevent the software from actually accessing the local system.
OpenFin CEO and co-founder Mazy Dar (Image via OpenFin)
As former analysts and traders at major financial institutions, Dar and his co-founder Chuck Doerr (now president & COO of OpenFin) recognized these major pain points and decided to build a common platform that would enable cross-functionality and instant deployment. And since apps on OpenFin are unable to access local file systems, banks can better ensure security and avoid prolonged yet ineffective security review processes.
And the value proposition offered by OpenFin seems to be quite compelling. OpenFin boasts an impressive roster of customers using its platform, including more than 1,500 major financial firms, almost 40 leading vendors and 15 of the world’s 20 largest banks.
More than 1,000 applications have been built on the OS, with OpenFin now deployed on more than 200,000 desktops — a noteworthy milestone given that the ever-popular Bloomberg Terminal, which is ubiquitously used across financial institutions and investment firms, is deployed on roughly 300,000 desktops.
Since raising their Series B in February 2017, OpenFin’s deployments have more than doubled. The company’s headcount has also doubled and its European presence has tripled. Earlier this year, OpenFin also launched it’s OpenFin Cloud Services platform, which allows financial firms to launch their own private local app stores for employees and customers without writing a single line of code.
To date, OpenFin has raised a total of $40 million in venture funding and plans to use the capital from its latest round for additional hiring and to expand its footprint onto more desktops around the world. In the long run, OpenFin hopes to become the vital operating infrastructure upon which all developers of financial applications are innovating.
“Apple and Google’s mobile operating systems and app stores have enabled more than a million apps that have fundamentally changed how we live,” said Dar. “OpenFin OS and our new app store services enable the next generation of desktop apps that are transforming how we work in financial services.”
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10x, founded by the ex-CEO of Barclays, raises $46M to take on ancient banking infrastructure
The fintech revolution continues apace, and while many startups are hoping that newer and better tech will help them take business away from traditional banks, today a company has received a large round of funding to help those incumbent institutions better compete.
10x Future Technologies is a startup that has built a ground-up platform that incorporates machine learning, cloud services… Read More
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