BaaS Startup Productfy Notches $16M Led by CM Ventures

Banking-as-a-service startup Productfy raised $16 million in a Series A funding round led by CM Ventures, with participation by existing investors Point72 Ventures, 500 Startups and Envestnet Yodlee.

The fresh infusion of capital will help the company to roll out card issuance as a service and to further its aim to provide a fully distributed financial and banking infrastructure, Productfy said in a press release on Friday (Oct. 8).

Productfy, which specializes in embedded financial products for FinTechs and brand innovators, was launched in 2018 in Silicon Valley by Duy Vo, who serves as the company’s CEO. The platform has a roster of partners, including card issuing platform Marqeta, card fulfillment firm Arroweye, Mastercard and others to help foster the advancement of the embedded finance ecosystem for developers and innovators.

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“We see massive parallels in what Productfy is building and larger movements in distributed and decentralized finance across the industry. This focus on simplifying an otherwise complicated process with multiple bank partners, data, and card vendors is a herculean task that — looking back in a few years — will be a watershed moment in distributed financial infrastructure,” predicted Vagan Khranyan, managing partner of CM Ventures.

The startup also partnered with Stearns Bank to enable “money movement and card programs with stacked workflows and unified due diligence, eliminating months of development, compliance hurdles and third-party integrations.”

CEO Vo said that CM Ventures has an expert understanding of embedded finance and BaaS, and that the intersection can bring about the opportunity to develop “financial products and services” that any brand can use.

“We can accelerate our efforts to go beyond building out world-class tools to integrating compliance, program management and customer service into a unified architecture that acts as a distributed backbone for a market that wants to unlock financial innovation and bring products to market in weeks, not months or years,” Vo said.

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Josh Hofer, chief risk and information security officer at Stearns Bank, said that Productfy has a product suite with “world-class architecture” and an API design that offers solutions “unlike any we’ve seen in the market.”

Hofer added that Productfy also has a “maniacal focus on enabling any non-bank company to easily launch a financial product to market,” and all of these attributes set it apart from competitors.

“Aligning our technology roadmap with Productfy’s enables both companies to succeed by making banking products more accessible and scalable for the entire ecosystem, and we’re excited to be part of this journey,” he said.