Payment Innovators Impress At FinovateFall 2013

Welcome’s VC Voices: a weekly column where we bring you commentary from the best of the best around the world of payments investment. Want to know what the biggest backers of our industry’s innovators and disrupters think? We give our VCs 500 words of unedited space to do with as they please, so you’ve come to the right place.

This week, hears from Dan Rosen, general partner at Commerce Ventures, about his experiences at FinovateFall 2013.

For those of you who weren’t in attendance, this week was FinovateFall 2013 in New York, and this post will hopefully provide a bit of a recap and commentary on the event.

In case any of you aren’t familiar, The Finovate Group operates four events per year across global cities: San Francisco (Spring), New York (Fall), Singapore (Asia) and London (Europe); and the events showcase demos from dozens of financial innovators with an audience that typically includes executives from financial institutions (FIs) and processors, media, industry analysts and investors.

FinovateFall this year found a new home at Manhattan Center Studios. Attendance came in around 1,100, which was below the Spring show’s numbers, but slightly higher than FinovateFall 2012. Anecdotally, the attendee base seemed to include fewer and fewer senior industry executives and investors and more technology and business executives seeking out financial tech innovations they could bring back to their companies to implement.

Venues always have pros and cons – the Manhattan Center was an improvement from last year’s venue in terms of Internet reliability, but proved to have very challenging acoustics and an eight-flight stairwell journey to earn one’s lunch.

Congrats to the Best of Show Winners announced yesterday at the event. They included:

Interactions – The company demoed their voice-based virtual assistant. Interactions recently raised a $40 million round led by Softbank and appear to be putting the money to good use.

LearnVest – Fresh off raising an additional $16.5 million themselves, LearnVest demoed their iPad app and Workplace Solutions Center, which they developed after refocusing their strategy on being “Weight Watchers” for personal finances.

mBank / Accenture – The combined demo by mBank and Accenture showed off what is being referred to as Bank 3.0 (whatever that means). A special congratulations to mBank Managing Director and ex-Microsoft exec Michal Panowicz, who just happens to be my former classmate.

Mitek – No surprises here, but Mitek demoed another way to use your mobile device’s camera to upload information. I think they won the audience over when they announced they had every top-10 bank as a customer and 1,000 total clients.

MoneyDesktop – Of course, no Finovate show would be complete without MoneyDesktop winning an award for their fantastic product, bringing the largest number of attendees from a single company and for generally being liked by everyone. It helps that they continue to gain momentum with FIs and processors alike for existing PFM products, and there seems to be a lot of excitement about their Data and Marketing apps on the horizon.

Motif Investing – Universally, everyone I spoke with seemed very impressed with Motif and the way they enable consumers to invest thematically in ideas with just one click. Motif raised $25 million in April from Goldman Sachs and it seems well on its way to success.

TipRanks –
The Israeli company showed off and won for their cloud-based accountability engine which active investors can utilize to determine the quality of new analyst recommendations.

Yodlee – A true Finovate veteran, Yodlee CEO Anil Arora took the stage to show off TANDEM, which enables groups to manage and discuss shared finances.

Overall, the presenters included a lot of demos in areas of security and fraud prevention, small business lending, personal financial management (particularly focused on improving financial health) and personal wealth management. Nearly absent from the presentation slate were products from mobile payments, electronic invoice presentment and payment (EIPP) and local offers.

For my purposes, the field of presenters breaks into two major categories. The first includes a few public companies and a long list of well-funded startups, such as Cardlytics, Dynamics, LearnVest, Manilla, Motif and Narrative Science. Several of these companies showcased very interesting products, but fundamentally they are well known and funded.

The second category includes a large pool of early-stage companies, which aren’t as well known and have raised much less, if any, capital. Within this group, my job is to identify the companies with surprisingly impressive product and momentum, and the size and quality of this group is how I judge the Finovate show. A few of this week’s pretty interesting companies, included:

CoverHound -CoverHound has pioneered an auto insurance comparison shopping app, which they launched last year. While they only sold 50 policies in their first month, last month they sold 50 policies in a single day. The company’s demo showcased how their newly released API has enabled cool mobile and Twitter comparison shopping capabilities.

FinanceIT – This company’s lending platform enables 2,600 merchants across four industry categories to offer point-of-sale (POS) credit (think Bill-Me-Later) to consumers. FinanceIT demonstrated their eCommerce-related capability and shared that they are already seeing $2 million in loan requests per day and haven’t even launched in the U.S. yet.

Spreedly – Having just reached its 100th customer, Spreedly provides a secure digital card vault in the cloud, for merchants and payments infrastructure partners who want to retain consumer card data in a PCI-compliant way. The company announced that they processed 100,000 credit card transactions in July, accounting for an annualized run-rate of $100 million of volume, and that they are integrated to more than 50 payment gateways worldwide.

Spreedly’s new product, called Gateway Index (in partnership with Shopify), demonstrated objective analytics on the price and performance of payment gateways across the Internet.

Overall, Finovate continues to be a worthwhile use of time for my purposes, but be forewarned that the Spring conference has been moved from San Francisco to San Jose. I’m surely not looking forward to the hour-long commute on the 101, but I’ll reserve judgment on everything else until after the event. I hope to see you there.

For more of Dan’s analysis, read his recap of FinovateSpring 2013 here.