financial services

Phos, the UK fintech that offers a software-only POS for smartphones, raises €1.3M

Posted by | Android, Bulgaria, Co-founder, economy, Europe, financial services, Fundings & Exits, Merchant Services, Phos, Startups, TC, TechCrunch, United Kingdom | No Comments

Phos, the U.K. fintech that offers a software-only PoS so that merchants can accept payments directly on their phones without the need for additional hardware, has raised €1.3 million in funding. The round was led by New Vision 3, an early-stage VC based in Bulgaria (where a part of the Phos team is based), with participation from a number of unnamed angel investors.

It brings the total raised by Phos to date to €2.5 million, and will be used to grow the development team. This will see new features introduced, such as ‘PIN on Phone,’ a Software Development Kit (SDK), and a new integrated loyalty system.

Founded in 2018, Phos has developed software that turns any NFC-equipped Android device into a payments terminal, negating the need for additional hardware and reducing total cost of ownership. The startup says its solution is quick to deploy, and is “uniquely” phone and bank agnostic i.e. any bank can act as the acquirer.

“Millions of traders and merchants do not accept card payments because they find the current hardware inconvenient or expensive,” Phos co-founder Ivo Gueorguiev tells TechCrunch . “Most of the merchants who accept card payments find the cost of ownership of the hardware high, [while the] current POS hardware offers no additional value, with the exception of very expensive smart terminals like Clover”.

To remedy this, Gueorguiev says Phos’ technology accepts contactless card payments directly on Android phones and other Android devices without the need for additional hardware, as well as helping merchants make better use of data.

“We offer merchants an alternative to old and expensive technology, namely [by using] devices they already own – their phones,” he explains. “We also offer merchants the ability to use their transaction data for other business applications. This includes e-commerce tools, marketing automation, loyalty, payroll, and more.

In terms of go-to-market, Phos is focused on a B2B model, seeing the fintech work with partners to distribute the product, such as banks, acquirers, PSPs/ISOs, large direct merchants, and platform players.

“The final user of the product will be mostly merchants at the long tail of the business, who are notoriously difficult to reach in a cost effective way,” adds Gueorguiev.

He cites use cases as small merchants and market traders, where traditional POS solutions are not appropriate due to costs and maintenance issues; direct sales and multilevel marketing; couriers and delivery services (“in certain markets ‘pay on delivery’ is still a predominant payment method with over 90% in cash,” says Gueorguiev); tradespeople; taxi drivers; insurance field sales; and even large retailers that can empower sales people to close sales in the aisles and reduce queues.

Adds Konstantin Petrov, Partner at NV3: “We are very happy to lead the investment round in phos and truly believe in the high potential of the company. The all important prerequisites for success are there: a strong and visionary team with years of experience in the field, a huge under-served market of small merchants who do not accept payments other than cash and an innovative technology providing first-mover advantage. In addition, fintech is considered a strategic vertical in the investment strategy of NV3 Fund, so phos is clearly a perfect add to our portfolio.”

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Venmo prototypes a debit card for teenagers

Posted by | Apps, Current, debit cards, eCommerce, Finance, financial services, Greenlight, Kard, mastercard, Mobile, PayPal, Revolut, Social, TC, Venmo | No Comments

Allowance is going digital. Venmo has been spotted prototyping a new feature that would allow adult users to create for their teenage children a debit card connected to their account. That could potentially let parents set spending notifications and limits while giving kids more flexibility in urgent situations than a few dollars stuffed in a pocket.

Delving into children’s banking could establish a new reason for adults to sign up for Venmo, get them saving more in Venmo debit accounts where the company can earn interest on the cash and drive purchase frequency that racks up interchange fees for Venmo’s owner PayPal .

But Venmo is arriving late to the teen debit card market. Startups like Greenlight and Step let parents manage teen spending on dedicated debit cards. More companies like Kard and neo banking giant Revolut have announced plans to launch their own versions. And Venmo’s prototype uses very similar terminology to that of Current, a frontrunner in the children’s banking space with over 500,000 accounts that raised a $20 million Series B late last year.

The first signs of Venmo’s debit card were spotted by reverse engineering specialist Jane Manchun Wong, who has provided slews of accurate tips to TechCrunch in the past. Hidden in Venmo’s Android app is code revealing a “delegate card” feature, designed to let users create a debit card that’s connected to their account but has limited privileges.

A screenshot generated from hidden code in Venmo’s app, via Jane Manchun Wong

A set-up screen Wong was able to generate from the code shows the option to “Enter your teen’s info,” because “We’ll use this to set up the debit card.” It asks parents to enter their child’s name, birth date and “What does your teen call you?” That’s almost identical to the “What does [your child’s name] call you?” set-up screen for Current’s teen debit card.

When TechCrunch asked about the teen debit feature and when it might launch, a Venmo spokesperson gave a cagey response that implies it’s indeed internally testing the option, writing “Venmo is constantly working to identify ways to refine and enhance the user experience. We frequently test product offerings to understand the value it could have for our users, and I don’t have anything further to share right now.”

Typically, the tech company product development flow sees them come up with ideas, mock them up, prototype them in their real apps as internal-only features, test them externally with small percentages of real users, then launch them officially if feedback and data is positive throughout. It’s unclear when Venmo might launch teen debit cards, though the product could always be scrapped. It’d need to move fast to beat Revolut and Kard to market.

Current’s teen debit card

The launch would build upon the June 2018 launch of Venmo’s branded Mastercard debit card that’s monetized through interchange fees and interest on savings. It offers payment receipts with options to split charges with friends within Venmo, free withdrawls at MoneyPass ATMs, rewards and in-app features for reseting your PIN or disabling a stolen card. Venmo also plans to launch a credit card issued by Synchrony this year.

Venmo might look to equip its teen debit card with popular features from competitors, like automatic weekly allowance deposits, notifications of all purchases or the ability to block spending at certain merchants. It’s unclear if it will charge a fee like the $36 per year subscription for Current.

Current offers these features for parents who set up a teen debit card

Tech startups are increasingly pushing to offer a broad range of financial services where margins are high. It’s an easy way to earn cheap money at a time when unit economics are coming under scrutiny in the wake of the WeWork implosion. Investors are pinning their hopes on efficient financial services too, pouring $34 billion into fintech startups during 2019.

Venmo’s already become a popular way for younger people to split the bill for Uber rides or dinner. Bringing social banking to a teen demographic probably should have been its plan all along.

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Nigeria’s Paga acquires Apposit, confirms Mexico and Ethiopia expansion

Posted by | africa, alipay, Android, Asia, Banking, Brown University, ceo, cisco systems, CTO, east africa, ethiopia, financial services, food delivery, isp, kenya, Lagos, latin america, M-Pesa, Mexico, Nigeria, Opay, Opera, paga, PayPal, Safaricom, San Francisco, software development, South Africa, Stanford University, Tayo Oviosu, TC, United States, western union | No Comments

Nigerian digital payments startup Paga has acquired Apposit, a software development company based in Ethiopia, for an undisclosed amount.

That’s just part of Paga’s news. The Lagos based startup will also launch its payment products in Mexico this year and in Ethiopia imminently, CEO Tayo Oviosu told TechCrunch

The moves come a little over a year after Paga raised a $10 million Series B round and Oviosu announced the company’s intent to expand globally, while speaking at Disrupt San Francisco.

Paga will leverage Apposit — which is U.S. incorporated but operates in Addis Ababa — to support that expansion into East Africa and Latin America.

Repat founders

Behind the acquisition is a story threaded with serendipity, return, and collaboration.

Both Paga and Apposit were founded by repatriate entrepreneurs. Oviosu did his MBA at Stanford University and worked at Cisco Systems before returning to Nigeria.

Apposit CEO Adam Abate moved back to Ethiopia 17 years ago for an assignment in the country’s Ministry of Finance, after studying at Brown University and working in fintech in New York.

“I put together a team…to build…public financial management systems for the country. And during the process…brought in my best friend Eric Chijioke…to be a technical engineer,” said Abate.

The two teamed up with Simon Solomon in 2007 to co-found Apposit, with a focus on building large-scale enterprise software for Africa.

Apposit partners (L-R) Adam Abate, Simon Solomon, Eric Chijioke, Gideon Abate

A year later, Oviosu met Chijioke when he crashed at his house while visiting Ethiopia for a wedding. It just so happened Chijioke’s brother was his roommate at Stanford.

That meeting began an extended conversation between the two on digital-finance innovation in Africa and eventually led to a Paga partnership with Apposit in 2010.

Apposit dedicated an engineering team to build Paga’s payment platform, Eric Chijioke became Paga’s CTO (while maintaining his Apposit role) and Apposit backed Paga.

“We aligned ourselves as African entrepreneurs…which then developed into a close relationship where we became…investors in Paga and strategically aligned,” said Abate.

African roots, global ambitions

Fast forward a decade, and the two companies have come pretty far. Apposit has grown its business into a team of 63 engineers and technicians and has racked up a list of client partnerships. The company helped digitize the Ethiopian Commodities Exchange and has contracted on IT and software solutions with banks non-profits and brick and mortar companies.

For a decade, Apposit has also supported Paga’s payment product development.

Paga Interfaces

Over that period, Oviosu and team went to work building Paga’s platform and driving digital payment adoption in Nigeria, home to Africa’s largest economy and population of 200 million.

That’s been no small task considering Nigeria’s percentage of unbanked was pegged as high as at 70% in 2011 and still lingers around 60%, according to The Global Findex database.

Paga has created a multi-channel network to transfer money, pay-bills, and buy things digitally. The company has 14 million customers in Nigeria who can transfer funds from one of Paga’s 24,411 agents or through the startup’s mobile apps.

Paga products work on iOS, Android, and basic USSD phones using a star, hashtag option. The company has remittance partnerships with the likes of Western Union and allows for third-party integration of its app.

Since inception, the startup has processed 104 million transactions worth $6.6 billion, according to Oviosu.

With the acquisition, Paga absorbs Apposit’s tech capabilities and team of 63 engineers.  The company will direct its boosted capabilities and total workforce of 530 to support expansion.

Paga plans its Mexico launch in 2020, according to Oviosu.

Adam Abate is now CEO of Paga Ethiopia, where Paga plans to go live as soon as it gains local regulatory approval. The East African nation of 100 million, with the continent’s seventh largest economy, is bidding to become Africa’s next startup hub, though it still lags the continent’s tech standouts — like Nigeria and Kenya — in startup formation, ISP options and VC.

Ethiopia has also been slow to adopt digital finance, with less than 1% of the population using mobile-money, compared to 73% for Kenya, Africa’s mobile-payments leader.

Paga aims to shift the financial needle in the country. “The goal is straight-forward. We want Ethiopians to use the Paga wallet as their payment account. So it’s about digitizing cash transactions and driving financial services,” said Oviosu.

Paga CEO Tayo Oviosu

With the Apposit acquisition and country expansion, he also looks to grow Paga’s model in Africa and beyond, as an emerging markets fintech solution.

“There are several very large countries around the world in Africa, Latin America, Asia where these [financial inclusion] problems still exist. So our strategy is not an African strategy…We want to go where these problems exist in a large way and build a global payments business,” Oviosu said.

Fintech competition in Nigeria

As it grows abroad, Paga faces greater competition in Nigeria. For the last decade, South Africa and Kenya — with the success of Safaricom’s  M-Pesa product — have been Africa’s standouts in digital payments.

But over the last several years, Nigeria has become a magnet for VC and fintech startups. This trend reached a high-point in 2019 when Chinese investors put $220 million into Opera owned OPay and Transsion backed PalmPay — two fledgling startups with plans to scale in Nigeria and broader Africa.

That’s a hefty war chest compared to Paga’s total VC haul of $34 million, according to Crunchbase.

Oviosu names product market fit and benefits from the company’s expansion as factors that will keep it ahead of these well-funded new entrants.

“That’s where the world-class technology comes in,” he said.

“We also take a perspective that we cannot build every use-case,” he said — contrasting Paga’s model to Opera in Africa, which has launched multiple startup verticals around its OPay product, from ride-hailing to food-delivery.

Oviosu compares Paga’s approach to PayPal, which allows third-party developers to shape businesses around PayPal as the payment solution.

With its Apposit acquisition and continued expansion, PayPal may become more than a model for Paga.

Founder Tayo Oviosu sees big fintech players, such as PayPal and Alipay, as future competitors with Paga’s plans to move into more emerging markets.

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Fintech’s next decade will look radically different

Posted by | Amazon, Andreessen Horowitz, Android, Angela Strange, bain capital ventures, Bank, BlackRock, equifax, Facebook, Finance, financial services, financial technology, GitHub, Google, instagram, Marqeta, Matt Harris, Open Banking, payments, PayPal, Shopify, stripe, TechCrunch, Uber, Venture Capital | No Comments

The birth and growth of financial technology developed mostly over the last ten years.

So as we look ahead, what does the next decade have in store? I believe we’re starting to see early signs: in the next ten years, fintech will become portable and ubiquitous as it moves to the background and centralizes into one place where our money is managed for us.

When I started working in fintech in 2012, I had trouble tracking competitive search terms because no one knew what our sector was called. The best-known companies in the space were Paypal and Mint.

fintech search volume

Google search volume for “fintech,” 2000 – present.

Fintech has since become a household name, a shift that came with with prodigious growth in investment: from $2 billion in 2010 to over $50 billion in venture capital in 2018 (and on-pace for $30 billion+ this year).

Predictions were made along the way with mixed results — banks will go out of business, banks will catch back up. Big tech will get into consumer finance. Narrow service providers will unbundle all of consumer finance. Banks and big fintechs will gobble up startups and consolidate the sector. Startups will each become their own banks. The fintech ‘bubble’ will burst.

Who will the winners be in the future of fintech?

Here’s what did happen: fintechs were (and still are) heavily verticalized, recreating the offline branches of financial services by bringing them online and introducing efficiencies. The next decade will look very different. Early signs are beginning to emerge from overlooked areas which suggest that financial services in the next decade will:

  1. Be portable and interoperable: Like mobile phones, customers will be able to easily transition between ‘carriers’.
  2. Become more ubiquitous and accessible: Basic financial products will become a commodity and bring unbanked participants ‘online’.
  3. Move to the background: The users of financial tools won’t have to develop 1:1 relationships with the providers of those tools.
  4. Centralize into a few places and steer on ‘autopilot’.

Prediction 1: The open data layer

Thesis: Data will be openly portable and will no longer be a competitive moat for fintechs.

Personal data has never had a moment in the spotlight quite like 2019. The Cambridge Analytica scandal and the data breach that compromised 145 million Equifax accounts sparked today’s public consciousness around the importance of data security. Last month, the House of Representatives’ Fintech Task Force met to evaluate financial data standards and the Senate introduced the Consumer Online Privacy Rights Act.

A tired cliché in tech today is that “data is the new oil.” Other things being equal, one would expect banks to exploit their data-rich advantage to build the best fintech. But while it’s necessary, data alone is not a sufficient competitive moat: great tech companies must interpret, understand and build customer-centric products that leverage their data.

Why will this change in the next decade? Because the walls around siloed customer data in financial services are coming down. This is opening the playing field for upstart fintech innovators to compete with billion-dollar banks, and it’s happening today.

Much of this is thanks to a relatively obscure piece of legislation in Europe, PSD2. Think of it as GDPR for payment data. The UK became the first to implement PSD2 policy under its Open Banking regime in 2018. The policy requires all large banks to make consumer data available to any fintech which the consumer permissions. So if I keep my savings with Bank A but want to leverage them to underwrite a mortgage with Fintech B, as a consumer I can now leverage my own data to access more products.

Consortia like FDATA are radically changing attitudes towards open banking and gaining global support. In the U.S., five federal financial regulators recently came together with a rare joint statement on the benefits of alternative data, for the most part only accessible through open banking technology.

The data layer, when it becomes open and ubiquitous, will erode the competitive advantage of data-rich financial institutions. This will democratize the bottom of the fintech stack and open the competition to whoever can build the best products on top of that openly accessible data… but building the best products is still no trivial feat, which is why Prediction 2 is so important:

Prediction 2: The open protocol layer

Thesis: Basic financial services will become simple open-source protocols, lowering the barrier for any company to offer financial products to its customers.

Picture any investment, wealth management, trading, merchant banking, or lending system. Just to get to market, these systems have to rigorously test their core functionality to avoid legal and regulatory risk. Then, they have to eliminate edge cases, build a compliance infrastructure, contract with third-party vendors to provide much of the underlying functionality (think: Fintech Toolkit) and make these systems all work together.

The end result is that every financial services provider builds similar systems, replicated over and over and siloed by company. Or even worse, they build on legacy core banking providers, with monolith systems in outdated languages (hello, COBOL). These services don’t interoperate, and each bank and fintech is forced to become its own expert at building financial protocols ancillary to its core service.

But three trends point to how that is changing today:

First, the infrastructure and service layer to build is being disaggregates, thanks to platforms like Stripe, Marqeta, Apex, and Plaid. These ‘finance as a service’ providers make it easy to build out basic financial functionality. Infrastructure is currently a hot investment category and will be as long as more companies get into financial services — and as long as infra market leaders can maintain price control and avoid commoditization.

Second, industry groups like FINOS are spearheading the push for open-source financial solutions. Consider a Github repository for all the basic functionality that underlies fintech tools. Developers could continuously improve the underlying code. Software could become standardized across the industry. Solutions offered by different service providers could become more inter-operable if they shared their underlying infrastructure.

And third, banks and investment managers, realizing the value in their own technology, are today starting to license that technology out. Examples are BlackRock’s Aladdin risk-management system or Goldman’s Alloy data modeling program. By giving away or selling these programs to clients, banks open up another revenue stream, make it easy for the financial services industry to work together (think of it as standardizing the language they all use), and open up a customer base that will provide helpful feedback, catch bugs, and request new useful product features.

As Andreessen Horowitz partner Angela Strange notes, “what that means is, there are several different infrastructure companies that will partner with banks and package up the licensing process and some regulatory work, and all the different payment-type networks that you need. So if you want to start a financial company, instead of spending two years and millions of dollars in forming tons of partnerships, you can get all of that as a service and get going.”

Fintech is developing in much the same way computers did: at first software and hardware came bundled, then hardware became below differentiated operating systems with ecosystem lock-in, then the internet broke open software with software-as-a-service. In that way, fintech in the next ten years will resemble the internet of the last twenty.

placeholder vc infographic

Infographic courtesy Placeholder VC

Prediction 3: Embedded fintech

Thesis: Fintech will become part of the basic functionality of non-finance products.

The concept of embedded fintech is that financial services, rather than being offered as a standalone product, will become part of the native user interface of other products, becoming embedded.

This prediction has gained supporters over the last few months, and it’s easy to see why. Bank partnerships and infrastructure software providers have inspired companies whose core competencies are not consumer finance to say “why not?” and dip their toes in fintech’s waters.

Apple debuted the Apple Card. Amazon offers its Amazon Pay and Amazon Cash products. Facebook unveiled its Libra project and, shortly afterward, launched Facebook Pay. As companies from Shopify to Target look to own their payment and purchase finance stacks, fintech will begin eating the world.

If these signals are indicative, financial services in the next decade will be a feature of the platforms with which consumers already have a direct relationship, rather than a product for which consumers need to develop a relationship with a new provider to gain access.

Matt Harris of Bain Capital Ventures summarizes in a recent set of essays (one, two) what it means for fintech to become embedded. His argument is that financial services will be the next layer of the ‘stack’ to build on top of internet, cloud, and mobile. We now have powerful tools that are constantly connected and immediately available to us through this stack, and embedded services like payments, transactions, and credit will allow us to unlock more value in them without managing our finances separately.

Fintech futurist Brett King puts it even more succinctly: technology companies and large consumer brands will become gatekeepers for financial products, which themselves will move to the background of the user experiences. Many of these companies have valuable data from providing sticky, high-affinity consumer products in other domains. That data can give them a proprietary advantage in cost-cutting or underwriting (eg: payment plans for new iPhones). The combination of first-order services (eg: making iPhones) with second-order embedded finance (eg: microloans) means that they can run either one as a loss-leader to subsidize the other, such as lowering the price of iPhones while increasing Apple’s take on transactions in the app store.

This is exciting for the consumers of fintech, who will no longer have to search for new ways to pay, invest, save, and spend. It will be a shift for any direct-to-consumer brands, who will be forced to compete on non-brand dimensions and could lose their customer relationships to aggregators.

Even so, legacy fintechs stand to gain from leveraging the audience of big tech companies to expand their reach and building off the contextual data of big tech platforms. Think of Uber rides hailed from within Google Maps: Uber made a calculated choice to list its supply on an aggregator in order to reach more customers right when they’re looking for directions.

Prediction 4: Bringing it all together

Thesis: Consumers will access financial services from one central hub.

In-line with the migration from front-end consumer brand to back-end financial plumbing, most financial services will centralize into hubs to be viewed all in one place.

For a consumer, the hub could be a smartphone. For a small business, within Quickbooks or Gmail or the cash register.

As companies like Facebook, Apple, and Amazon split their operating systems across platforms (think: Alexa + Amazon Prime + Amazon Credit Card), benefits will accrue to users who are fully committed to one ecosystem so that they can manage their finances through any platform — but these providers will make their platforms interoperable as well so that Alexa (e.g.) can still win over Android users.

As a fintech nerd, I love playing around with different financial products. But most people are not fintech nerds and prefer to interact with as few services as possible. Having to interface with multiple fintechs separately is ultimately value subtractive, not additive. And good products are designed around customer-centric intuition. In her piece, Google Maps for Money, Strange calls this ‘autonomous finance:’ your financial service products should know your own financial position better than you do so that they can make the best choices with your money and execute them in the background so you don’t have to.

And so now we see the rebundling of services. But are these the natural endpoints for fintech? As consumers become more accustomed to financial services as a natural feature of other products, they will probably interact more and more with services in the hubs from which they manage their lives. Tech companies have the natural advantage in designing the product UIs we love — do you enjoy spending more time on your bank’s website or your Instagram feed? Today, these hubs are smartphones and laptops. In the future, could they be others, like emails, cars, phones or search engines?

As the development of fintech mirrors the evolution of computers and the internet, becoming interoperable and embedded in everyday services, it will radically reshape where we manage our finances and how little we think about them anymore. One thing is certain: by the time I’m writing this article in 2029, fintech will look very little like it did today.

So which financial technology companies will be the ones to watch over the next decade? Building off these trends, we’ve picked five that will thrive in this changing environment.

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Europe’s antitrust chief, Margrethe Vestager, set for expanded role in next Commission

Posted by | Android, Apple, artificial intelligence, digital economy, e-commerce, Europe, european commission, european parliament, european union, Facebook, financial services, France, Google, Margrethe Vestager, Mariya Gabriel, online disinformation, Policy, TC, Trump administration, United Kingdom, United States, Vera Jourova | No Comments

As the antitrust investigations stack up on US tech giants’ home turf there’s no sign of pressure letting up across the pond.

European Commission president-elect Ursula von der Leyen today unveiled her picks for the next team of commissioners who will take up their mandates on November 1 — giving an expanded role to competition commissioner Margrethe Vestager. The pick suggests the next Commission is preparing to dial up its scrutiny of big tech’s data monopolies.

Under the draft list of commissioners-designate, which still needs to be approved in full by the European Parliament, Vestager has been named executive VP overseeing a new portfolio called ‘Europe fit for the digital age’.

But, crucially, she will also retain the competition portfolio — which implies attention on growing Europe’s digital economy will go hand in glove with scrutiny of fairness in ecommerce and ensuring a level playing field vs US platform giants.

“Executive vice-president Margrethe Vestager will lead our work on a Europe fit for the digital age,” said von der Leyen at a press conference to announce her picks. “Digitalization has a huge impact on the way we live, we work, we communicate. In some fields Europe has to catch up — for example in the field of business to consumer but in other fields we’re excellent. Europe is the frontrunner, for example in business to business, when we talk about digital twins of products and procedures.

“We have to make more out of the field of artificial intelligence. We have to make our single market a digital single market. We have to use way more the big data that is out there but we don’t make enough out of it. What innovation and startups are concerned. It’s not only need to know but it’s need to share big data. We have to improve on cyber security. We have to work hard on our technological sovereignty just to name a few issues in these broad topics.

“Margrethe Vestager will co-ordinate the whole agenda. And be the commissioner for competition. She will work together with the commissioner for internal market, innovation and youth, transport, energy, jobs, health and justice.”

If tech giants were hoping for Europe’s next Commission to pay a little less attention to question marks hanging over the fairness of their practices they’re likely to be disappointed as Vestager is set to gain expanded powers and a broader canvas to paint on. The new role clearly positions her to act on the review of competition policy she instigated towards the end of her current mandate — which focused on the challenges posed by digital markets.

Since taking over as Europe’s competition chief back in 2014, Vestager has made a name for herself by blowing the dust off the brief and driving forward on a series of regulatory interventions targeting tech giants including Amazon, Apple and Google . In the latter case this has included opening a series of fresh probes as well as nailing the very long running Google Shopping saga inherited from her predecessor.

The activity of the department under her mandate has clearly catalyzed complainants — creating a pipeline of cases for her to tackle. And just last month Reuters reported she had been preparing an “intensive” handover of work looking into complaints against Google’s job search product to her successor — a handover that won’t now be necessary, assuming the EU parliament gives its backing to von der Leyen’s team.

While the competition commissioner has thus far generated the biggest headlines for the size of antitrust fines she’s handed down — including a record-breaking $5BN fine for Google last year for illegal restrictions attached to Android — her attention on big data holdings as a competition risk is most likely to worry tech giants going forward.

See, for example, the formal investigation of Amazon’s use of merchant data announced this summer for a sign of the direction of travel.

Vestager has also talked publicly about regulating data flows as being a more savvy route to control big tech versus swinging a break up hammer. And while — on the surface — regulating data might sound less radical a remedy than breaking giants like Google and Facebook up, placing hard limits on how data can be used has the potential to effect structural separation via a sort of regulatory keyhole surgery that’s likely to be quicker and implies a precision that may also make it more politically palatable.

That’s important given the ongoing EU-US trade friction kicked up by the Trump administration which is never shy of lashing out, especially at European interventions that seek to address some of the inequalities generated by tech giants — most recently Trump gave France’s digital tax plans a tongue-lashing.

von der Leyen was asked during the press conference whether Vestager might not been seen as a controversial choice given Trump’s views of her activity to date (Europe’s “tax lady” is one of the nicer things he’s said about Vestager). The EU president-elect dismissed the point saying the only thing that matters in assigning Commission portfolios is “quality and excellence”, adding that competition and digital is the perfect combination to make the most of Vestager’s talents.

“Vestager has done an outstanding job as a commissioner for competition,” she went on. “At competition and the issues she’s tackling there are closely linked to the digital sector too. So having her as an executive vice-president for the digital in Europe is absolutely a perfect combination.

“She’ll have this topic as a cross-cutting topic. She’ll have to work on the Digital Single Market. She will work on the fact that we want to use in a better way big data that is out there, that we collect every day — non-personalized data. That we should use way better, in the need for example to share with others for innovation, for startups, for new ideas.

“She will work on the whole topic of cyber security. Which is the more we’re digitalized, the more we’re vulnerable. So there’s a huge field in front of her. And as she’s shown excellence in the Commission portfolio she’ll keep that — the executive vice-presidents have with the DGs muscles to deal with their vast portfolios’ subject they have to deal with.”

In other choices announced today, the current commissioner for Digital Economy and Society, Mariya Gabriel, will be taking up a new portfolio called ‘Innovation and Youth’. And Sylvie Goulard was named as ‘Internal Market’ commissioner, leading on industrial policy and promoting the Digital Single Market, as well as getting responsibility for Defence Industry and Space.

Another executive VP choice, Valdis Dombrovskis, looks likely to be tackling thorny digital taxation issues — with responsibility for co-ordinating the Commission’s work on what’s been dubbed an “Economy that Works for People”, as well as also being commissioner for financial services. 

In prepared remarks on that role, von der Leyen said: We have a unique social market economy. It is the source of our prosperity and social fairness. This is all the more important when we face a twin transition: climate and digital. Valdis Dombrovskis will lead our work to bring together the social and the market in our economy.”

Frans Timmermans, who was previously in the running as a possible candidate for Commission president but lost out to von der Leyen, is another exec VP pick. He’s set to be focused on delivering a European Green Deal and managing climate action policy.

Another familiar face — current justice, consumer and gender affairs commissioner, Věra Jourová — has also been named as an exec VP, gaining responsibility for “Values and Transparency”, a portfolio title which suggests she’ll continue to be involved in EU efforts to combat online disinformation on platforms.

The rest of the Commission portfolio appointments can be found here.

There are 26 picks in all — 27 counting von der Leyen who has already been confirmed as president; one per EU country. The UK has no representation in the next Commission given it is due to leave the bloc on October 31, the day before the new Commission takes up its mandate.

von der Leyen touted the team she presented today as balanced and diverse, including on gender lines as well as geographically to take account of the full span of European Union members.

“It draws on all the strength and talents, men and women, experienced and young, east and west, south and north, a team that is well balanced, a team that brings together diversity of experience and competence,” she said. “I want a Commission that is led with determination, that is clearly focused on the issues at hand — and that provides answers.”

Commissioners elect

“There’s one fundamental that connects this team: We want to bring new impetus to Europe’s democracy,” she added. “This is our joint responsibility. And democracy is more than voting in elections in every five years; it is about having your voice heard. It’s about having been able to participate in the way our society’s built. We gave to address some of the deeper issues in our society that have led to a loss of faith in democracy.”

In a signal of her intention that the new Commission should “walk the talk” on making Europe fit for the digital age she announced that college meetings will be paperless and digital.

On lawmaking, she added that there will be a one-in, one-out policy — with any new laws and regulation supplanting an existing rule in a bid to cut red tape.

The shape of the next Commission remains in draft pending approval by the European Parliament to all the picks. The parliament must vote to accept the entire college of commissioners — a process that’s preceded by hearings of the commissioners-designate in relevant parliamentary committees.

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OpenFin raises $17 million for its OS for finance

Posted by | Android, app-store, Apple, Apps, bain capital ventures, Banking, Barclays, bloomberg terminal, Cloud, Developer, Enterprise, Finance, financial services, funding, Fundings & Exits, J.P. Morgan, nyca partners, OpenFin, operating systems, Private Equity, Recent Funding, Startups, truphone, Uber, Wells Fargo | No Comments

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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India’s Mswipe raises $30M to grow its smart point-of-sale terminal business

Posted by | Android, Asia, b capital, ceo, Co-founder, Eduardo Saverin, Facebook, Finance, financial services, funding, Fundings & Exits, india, inventory management, manish patel, money, online payments, Turkey | No Comments

Mswipe, an Indian fintech company that develops point-of-sale terminals for merchants, has pulled $30 million in new funding as it bids to triple its reach to 1.5 million merchants over the next year.

The company’s previous funding as a Series D in 2017 that ended up at just over $40 million, thanks to a $10 million extension from B Capitalthe investment firm set up by Facebook co-founder Eduardo Saverin that’s backed by BCG. This time around, B Capital has provided the funding alongside other returning investors that include Falcon Edge, Epiq Capital and DSG Growth Partners. The deal takes the startup to $95 million raised to date.

We wrote extensively about the company’s strategy back at the time of that 2017 round, and essentially the thesis is that POS devices remain essential despite the proliferation of new fintech like mobile wallets. With that in mind, Mswipe makes its terminals cheaper than the competition while it can also work on more limited internet connections, even 2G, to help merchants and retailers in more remote areas or those on a modest budget.

More critically, Mswipe CEO and founder Manish Patel believes the country is “ripe for disruption” because it has so few terminals. With less than three million terminals in operation across the whole of India, even Turkey, with a significantly smaller population of 80 million, has more.

Right now, Mswipe claims to have reached over 400,000 merchants — up from 290,000 at the end of 2017 — and Patel said today that the aim is to grow that figure to 1.5 million over the next year.

To reach that ambitious target, Mswipe is once again trying to put more than just a terminal inside a terminal.

Beyond offering hardware that simply works and ties into newer types of payment, Mswipe has a vision of additional services for merchants. It is developing a new ‘smart’ POS — Wise POS Plus — that is developed on Android which allows applications like billing, inventory management and logistics to be pulled in, too. Indeed, the second piece to that is its own dedicated app store — MoneyStore — which is in development now and is aimed at housing a suite of productivity apps and related services for smaller retailers.

Mswipe is betting on a new Android-based smart terminal that will give its merchants access to productivity and management apps, too

“WisePOS Plus… powered by a suite of productivity apps, can enable a merchant to save thousands of rupees and hundreds of hours that go into running computer-based billing and inventory solutions with integrated payments. At the same time, we are also creating a huge opportunity for app developers with MoneyStore,” Patel said in a prepated statement.

The second major prong that he believes can bring this growth is the adoption of UPI, the government-backed real-time payments system in India. Mswipe said it is “all set to enable” the system which will allow QR payments at terminals. Mswipe is also working with lending startup Cashe on a co-branded card for consumers following a deal announced in December.

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Movius raises $45M for its business communications service

Posted by | Banking, Enterprise, financial services, jpmorgan chase, Mobile, movius, new enterprise associates, Recent Funding, series D, Startups | No Comments

Atlanta-based Movius, a company that allows companies to assign a separate business number for voice calls and texting to any phone, today announced that it has raised a $45 million Series D round led by JPMorgan Chase, with participation from existing investors PointGuard Ventures, New Enterprise Associates and Anschutz Investment company. With this, the company has now raised a total of $100 million.

In addition to the new funding, Movius also today announced that it has brought on former Adobe and Sun executive John Loiacono as its new CEO. Loiacono was also the founding CEO of network analytics startup Jolata.

“The Movius opportunity is pervasive. Almost every company on planet Earth is mobilizing their workforce but are challenged to find a way to securely interact with their customers and constituents using all the preferred communication vehicles – be that voice, SMS or any other channel they use in their daily lives,” said Loiacono. “I’m thrilled because I’m joining a team that features highly passionate and proven innovators who are maniacally focused on delivering this very solution. I look forward to leading this next chapter of growth for the company.”

Sanjay Jain, the chief strategy officer at Hyperloop Transportation Technologies, and Larry Feinsmith, the head of JPMorgan Chase’s Technology Innovation, Strategy & Partnerships office, are joining the company’s board.

Movius currently counts more than 1,400 businesses as its customers, and its carrier partners include Sprint, Telstra and Telefonica. What’s important to note is that Movius is more than a basic VoIP app on your phone. What the company promises is a carrier-grade network that allows businesses to assign a second number to their employees’ phones. That way, the employer remains in charge, even as employees bring their own devices to work.

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Amazon-backed lending platform Capital Float buys consumer finance startup Walnut

Posted by | Amazon, Android, Apps, Asia, Capital Float, economy, Finance, financial services, Fundings & Exits, india, money | No Comments

India-based lending platform Capital Float has been busy raising capital, having closed an Amazon-led $22 million extension to its $45 million Series C last year —  now it’s putting some of that capital to work after it acquired personal finance service Walnut.

The acquisition is $30 million spread across cash and stock, the companies said, and it’ll boost five-year-old Capital Float’s move into the consumer space. The company has to date focused on serving SME and business customers, but last year it began to offer financial services to consumers.

Walnut helps consumers manage their finances and track spending, and it claims seven million downloads on Android . It also includes a feature — Walnut Prime — that offers an instant credit line. Already, it said, it has handed out nearly $15 million in consumer loans.

“Walnut Prime is a product of deep interest to us, and it will essentially become a new addition
to our stable of exceptional, customized credit products,” Capital Float co-founders Sashank Rishyasringa and Gaurav Hinduja said in a statement.

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With loans of just $10, this startup has built a financial services powerhouse in emerging markets

Posted by | africa, Android, bangalore, california, ceo, Collaborative Fund, data collective, Director, Entrepreneur, Female Founders Fund, Finance, financial services, google ventures, india, IVP, jules maltz, Kabbage, kenya, Lowercase Capital, managing partner, Manila, Mexico, mexico city, Mumbai, Nairobi, Philippines, Revolution Growth, revolution ventures, Ribbit Capital, santa monica, shilling, steve case, tala, Tanzania, TC, United Nations Population Fund | No Comments

Peris Kimeli and Betsy Cheruyot were students at Kenyatta University thinking about launching a business when they applied for their first loans from the mobile lending company, Tala.

Hoping to get a clothing business off the ground and make some money to live on while going to school, the two young Kenyans downloaded the Tala mobile app, and within minutes received loans totaling about $15.

“Between us and poverty, we had about 200 shillings,” Kimeli said of her early days starting their business. “We were like, what are we going to eat? Our parents said, ‘No. We’re not going to send money… You go figure it out’ So we went and we did that.”

Kimeli and Cheruyot took that $15 loan and went to Nairobi’s famous secondhand market, Gikomba, where they bought 15 dresses at 100 shillings each and resold them in dorms and hostels for 200 shillings.

“Two remained, but we had no problem — since we could keep them, we could wear them. By the end of the month, we had 7000 [shillings],” Kimeli said. “We borrowed again — this time we borrowed 3000 [shillings] — we went out and bought some more dresses, and that’s how we’ve been.”

Peris Kimeli and Betsy Cheruyot in Nairobi. Photo courtesy of Tala

Similar stories are playing out in cities across the world — in countries like India, Mexico, the Philippines and Tanzania — all because of Tala, a young, Santa Monica, Calif.-based, financial services startup.

Now in its fourth year, Tala has already distributed around $300 million in loans to 1.3 million borrowers like Kimeli. The company plans to continue expanding its geographical reach and range of financial services, thanks in part to $65 million in new financing from billionaire backed investment funds like Steve Case’s Revolution Growth fund.

“We see Tala as a company building the future of finance. They have quickly become one of the leading mobile-first lenders in emerging markets where well over 3 billion consumers do not have access to traditional banks,” says Case.

Shivani Siroya, the founder and chief executive officer at Tala, knows just how important — and transformational — outside investment can be for individuals in emerging markets.

Siroya was introduced to the power of financial independence working with the United Nations Population Fund.

“I ended up interviewing 3500 people, in person, across nine different countries,” Siroya says. “What I did was go to their homes with them. Walk with them to work and sit there in the back of their stores and tally how many customers came in and how many products they sold. How much money goes under the mattress and how much oney goes to allowances… These individuals are hard-working and they are credit worthy, but you couldn’t lend to them because they couldn’t be documented.”

Siroya launched Tala in March 2014 to create a mechanism for providing credit scores to financial institutions so that these undocumented women could get the loans they needed to become financially independent and entrepreneurial, she says. What Tala’s founder quickly realized was that the easiest way to create credit scores that other financial institutions would recognize would be for Tala to start issuing loans itself.

The app — available for download on Android devices — works by collecting data on texts and calls, merchant transactions, overall app usage, and personal identifiers on a mobile phone to create an instantaneous profile of its potential borrowers. Customers simply download the app, apply for a loan and receive a decision in seconds. Most Tala borrowers, actually receive their credit in less than 10 minutes.

Shivani Siroya (Tala CEO) at TechCrunch Disrupt NY 2017

Siroya started Tala’s lending in Kenya — in part because of the robust mobile payment infrastructure that exists in the country — before eventually expanding to the Philippines and then Tanzania. By the end of last year Tala had added operations in Mexico and India to span more geographies than any of the other unsecured mobile lenders in the market. The company boasts 215 employees across offices in Santa Monica, Nairobi, Dar Es Salaam, Manila, Mexico City, Mumbai, and Bangalore. 

Tala typically lends around $70 to its borrowers, but loans range from $10 on the low end to $500 at the high end. “The point of credit is leveraging your income to improve your quality of life,” Siroya says. Lower loan sizes could mean a product that’s geared more towards consumption than towards leveraging a product to invest for economic stability, she says.

“We want to start at $10, because we realize that 70% of our customers are using this for working capital. They’re small business owners. That’s really the gap in the market,” says Siroya.

Tala’s borrowers are usually paying back the loans within 30 days and the company charges a 11% to 15% interest on the money it disburses.

The company raised its first capital in 2013 from Lowercase Capital, Google Ventures, and Collaborative Fund. With the new financing, led by Revolution, Siroya now has $50 million in equity to match another $11 million in credit facilities. In all, the company has raised $94 million in equity across three rounds. Steve Murray, a managing partner of Revolution Growth — and former director on the board of business lending startup Kabbage — will be joining Tala’s board of directors with the latest round.

Previous investors, including the growth investment firm IVP, Data Collective, Lowercase Capital, Ribbit Capital, and Female Founders Fund, also participated in Tala’s latest financing.

“We have been fortunate to invest in Twitter and Dropbox and a lot of other companies. but when I think about the companies that we have had the opportunity to back that will have the greatest impact on the world, Tala is certainly one of them,” says IVP general partner, Jules Maltz. “That’s because it has the opportunity to reach the 2 billion people who are unbanked and don’t have access to financial products.”

Those 2 billion include thousands just like Nairobi’s budding new entrepreneurs, Kimeli and Cheruyot.

“I believe in the magic of taking risks and new beginnings,” says Kimeli. “If we hadn’t began on that day, we could have just been desperate now. As in, we might not have a place to eat, maybe. It’s good to take risks, to start something new.”

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