There’s strategic gold locked in receipt level data, aka SKU level data, and the appetite for accessing those insights is attracting not just users but investors who see the possibilities.
In a clear vote of confidence for both concept and company, FinTech Banyan announced on Thursday (Oct. 20) that it’s just completed a $43 million Series A funding round led by Fin Capital and M13. With financing tight and the economy wavering, the fundraise signals a belief among early-stage investors that receipt-level data has powerful use cases across sectors.
Speaking with PYMNTS’ Karen Webster just before the news broke, Banyan CEO Jehan Luth said the impressive fundraise in a down economy is a testament to his team, and more so to the concept itself, as PYMNTS research has found a formidable demand for SKU level data.
“Fundamentally, we believe that the entire industry gets more efficient with the availability of SKU level data,” Luth said. “We look at it as the next wave of FinTech, the next wave of financial services needs better, more accurate, more actionable, cleaner data. And that’s where Banyan can play a very important role in being the invisible rails.”
In pitching to VCs Luth said, “it was very important to us to narrow the aperture and focus as a young organization on use cases that are incredibly valuable to the ecosystem, but also can be delivered at a company at our scale and our stage.”
Specifically, Banyan is focusing on two areas where item-level data can deliver outsized results.
Luth told Webster “We chose doubling down in the offers and reward space, and … in kind of the expense management space. We believe both of those verticals are ripe for innovation. They fundamentally need better data to evolve. That’s where Banyan can play a really pivotal role.”
Though the two joked about the buzzwordy term “product-market fit” it nonetheless applies here. “With the two use cases we have, we’re definitely seeing a lot of interest from the market,” he said, “but there’s so many more use cases to be built over time.”
See also: Receipt Data Bridges Loyalty Gap for Savvy Retailers and Banks
Taking SKU-Level Data to the Next Level
Conceding that tapping SKU level isn’t a new idea and that his investors have heard the pitch before, Luth believes Banyan’s technology platform was clearly persuasive, as it stands to enable new forms of personalization and automation that surpass what’s currently available.
Placing Banyan’s market positioning squarely in the infrastructure camp, Luth told Webster that “Oftentimes when companies are building solutions and the underlying infrastructure, it’s very hard to show positive unit economics and show scalability. In our case, we have separated those two worlds.”
See also: 95% of FIs Tap Power of Receipt Data
“We’re not going to create B2C applications. We’re not going to create banking products that consumers can see. We’re going to work with FinTechs and banks that do that today, and that can run better with our data. The infrastructure approach [is] not just a quote on our deck, but it’s truly how we operate. That’s allowed us to make sure when we invest, we’re seeing the right unit economics come out on the other side.”
That translates to “scalability on the other side, and we leave a lot of the creativity of what folks want to build off of SKU level data in the hands of the organizations we work with.”
And organizations are baying for SKU-level data because it delivers. The new study Tapping Into The Benefits Of Item-Level Receipt Data, a PYMNTS and Banyan collaboration and based on surveys of over 350 executives at financial institutions (FIs) with $5 billion minimum in assets and FinTechs with at least 1 million active monthly users, shows “firms are particularly interested in using receipt data to improve consumers’ understanding of their spending behavior and mitigate and prevent fraud.”
The study found that high data-readiness firms “are the most interested in using receipt data to boost consumers’ understanding of their spending behavior, 73% of these firms are very or extremely interested in using receipt data to prevent and mitigate fraud.”
Get the Study: Tapping Into The Benefits Of Item-Level Receipt Data
A former epidemiologist, Luth has a unique grasp of how data analysis can be used to uncover the hidden, in this case, deep insights into consumer habits as expressed in their purchases.
“The accuracy and cleanliness of data [is] not an option in the health space, right? It has to be the standard,” he said. “I think we brought that level of transparency, we brought that level of rigor, to FinTech, which a lot of organizations in the FinTech space aren’t used to doing.”
Even as privacy regulations clamp down on how consumer data can and can’t be used, he said. “We’re supportive of that because that’s our model. Everything we do is about getting consumers access to their data and the applications they choose. So yes, I came at this very differently, but then our team has also come at this very differently, some from banks, some from other corporations.”
Asked the inevitable question about how Banyan will spend its $43 million cash infusion, Luth said the concept needs the infrastructure to scale, and they plan to be a force in creating it.
“The beauty of building infrastructure businesses is it requires incredibly disciplined investment in building scale,” he said. “The goal for the next couple of years is building out scale, bringing more merchants on the network, working with more banks and fintechs. We’re definitely going to invest in building out the tech. It’s really building the infrastructure.”
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