However, there is a tailwind to early-stage financing of FinTechs focused on platform models that re-imagine lending and businesses’ back-office processes. Banks are broadening their efforts to help FinTechs, once competitors, grow their businesses.
There is also the continued blurring of lines between retail and financial services, aided by FinTechs.
In short, this week was busy, underscoring the further entrenchment of FinTechs into the landscape of daily financial life.
Walmart’s Credit Card Push
Walmart’s push into financial services got a boost this week, as OnePay, a FinTech backed by the retailing giant, partnered with Synchrony to launch a credit card program.
The OnePay app is a digital front door through which a range of cards — general-propose and private-label cards (for Walmart purchases) — will roll out beginning this fall. Synchrony, meanwhile, has long made a mark in private-label cards. OnePay houses Walmart’s digital wallet where those cards and debit cards can be kept.
The new Synchrony pact follows a partnership in March where Walmart teamed with Klarna to offer installment loans.
Separately, and in further evidence of banks collaborating with FinTechs, J.P. Morgan Chase began accepting applications this week for a FinTech accelerator program for startups in the United Kingdom. The program, featuring mentorship from banking executives, was developed between J.P. Morgan and consulting firm EY. It is taking will take applications until June 27; the program itself will take place from September to November.
Targeting Platforms
A range of financial backers — venture capital firms and banks — are committing more fully to the space, especially when it comes to investing in platforms.
In one example, Citigroup and Carlyle Group partnered this week to fund FinTech companies. The two companies signed an agreement that lets them jointly invest in growing companies and the assets those companies originate, like consumer loans. It also lets Carlyle and Citi invest side-by-side in these startups, whether through private debt or equity investments, and one day arrange their public asset-backed bonds. Carlyle will team with Citi’s venture investing team Spread Products Investment in Technologies, (SPRINT), which specializes in FinTech investments.
GrailPay said Wednesday (June 11) that it raised $6.7 million to expand its risk and data platform for bank payments that is used to make ACH payments safer, smarter and faster. The company will use the new funding to grow its product and engineering teams, expand its go-to-market efforts and add new capabilities to the platform. The platform itself applies risk engines and analytics to bank payments that have long been a hallmark of credit card transactions. The GrailPay offerings are used for account enrollment, transaction monitoring and merchant underwriting so that client firms reduce failed payments, accelerate decisioning and automate operations. The funding round was led by Construct Capital.
Berlin-based payment software FinTech Payrails raised $32 million in new funding. The company’s Series A round, announced Thursday (June 12), will help the company speed product innovation and expand across Europe, the Middle East and Africa to meet growing demand from large enterprises to manage local payment methods by orchestrating those payment flows.
Finnish FinTech company FinanceKey announced Tuesday (June 10) that it raised 3 million euros (about $3.4 million) in a seed funding round to expand its artificial intelligence-powered, fully automated enterprise treasury system. The funding will be used, in part, to expand into new markets across Europe. The FinanceKey platform connects banking, enterprise resource planning (ERP) and treasury systems; standardizes financial data; and fully automates payment processes. These capabilities free treasury and finance professionals from handling reconciliations, payment execution, bank integrations and other low-value tasks, and give them a real-time view of cash across accounts and entities.
FinTech Tebi, which was launched by Adyen co-founder Arnout Schuijff, said Tuesday that it raised 30 million euros. The Series B funding round was led by CapitalG, Google’s growth fund. The capital is being earmarked to expand Tebi’s platform, which unifies point of sale (POS), payments, kitchen displays, reservations, inventory and bookkeeping via accounting subledgers.
