Fintech weekly deals and partnerships roundup

Singapore P2P lender raises $20+mn led by Dutch bank FMO

Singapore fintech startup Validus Capital announced it’s raised $20.5 million on an oversubscribed Series B funding round. Since obtaining its Capital Markets Services (CMS) license from the Monetary Authority of Singapore (MAS) in late 2017, Validus has grown to become the country’s top peer-to-peer (P2P) lending platform for small and medium enterprises (SMEs) with some S$180 million ($133.4mn) in business funding domestically.

The fintech is also Visa’s only P2P lending platform partner in the region and it is a founding member of SFA’s (Singapore Fintech Association) Marketplace Lending Committee.The funding round was led by FMO, AAA-rated Netherlands’ leading development bank, marking FMO’s first direct fintech investment in Asia.Participating investors also include Taiwan’s Cathay Financial Holdings, Singapore’s Openspace Ventures (previously NSI Ventures), Temasek investment arm Vertex Ventures, Thailand’s AddVentures by SCG and Vietnam’s VinaCapital Ventures.

The funding is intended for technology and product development, including artificial intelligence (AI) and machine learning, as well as expansion into Southeast Asia, starting with Indonesia in Q2 2019.

BlackRock-backed Envestnet buys wealthtech from Charles Schwab

Tamarac announced it’s agreed to acquire PortfolioCenter, Schwab Performance Technologies’ portfolio management and reporting technology solution for independent registered investment advisers (RIAs). Tamarac is a division of Envestnet, which announced a BlackRock investment of $122.8 million to acquire a 4.9% equity stake late last year.

More than 3,000 advisory firms leverage PortfolioCenter either directly from Schwab Performance Technologies or from Envestnet | Tamarac.

“Portfolio accounting software is the cornerstone of any practice and PortfolioCenter is one of the most widely trusted solutions amongst RIAs, which is why we originally selected it as our underlying technology,” said Andina Anderson, executive managing director of Envestnet | Tamarac. “With this acquisition, we will be able to build on all of the investments we’ve made in the technology including: extending it into a cloud-based application, enabling an open architecture eco-system, and driving greater efficiency to RIAs who rely on PortfolioCenter.”

In an commentary, Autonomous Next wrote: “Schwab Advisor Services, a $1 trillion assets under custody business, is selling its desktop portfolio management technology PortfolioCenter (which manages 2,300 advisory firms) to Envestnet for an “immaterial” price. The cost to Schwab of trying to pull those users into the cloud from desktop was higher than giving away the business, which generates about $10 million in revenue. Schwab retains its cloud version of the software, PortfolioConnect, as part of confusingly named AdvisorCenter. Reminder that one of the larger Envestnet shareholders is BlackRock, both a competitor to and manufacturer for Schwab’s offering.

Fidelity paid up $250 million to buy eMoney, a cloud-based chassis for digital wealth management in 2015. The industry’s conclusion was that custodians were going to be providers of technology in a freemium model, giving away tech and making money on capital. The independent wealthtech software houses (Orion, Black Diamond, ENV, AdvisorEngine, SigFig) could be in trouble. The Schwab sale of its client base given the cost of management legacy tech is enlightening.

“At the core, custodians are horizontal financial product platforms, enabling brands (e.g., RIAs, Cryptofunds) to deliver services to their customers. Sounds a lot like the other things happening in finance, which is open banking and data aggregation platforms building API-first layers.”

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Nomura invests in Brevan Howard financial AI venture

Nomura announced it is investing in a venture established by Brevan Howard, called AIM2, which specializes in building artificial intelligence-powered solutions for the finance industry. AIM2 was launched in 2015 to use a combination of data science and machine learning to develop a range of alpha investment strategies.

Nomura is understood to be taking a 22% stake in Aim2 for more than $10 million and is the first third party to deploy the software, according to the Financial Times.

It’s now building trading tools for participants in wholesale financial markets, following collaboration between Nomura and AIM2 that began in 2018. The new tool uses AI and data science to analyze large sets of high-frequency historical and
real-time data, including client flows and market data, to provide quotes and recommendations.

Steve Ashley, global head of Wholesale at Nomura, said in a statement that the solution will also form part of the bank’s plans to accelerate wholesale digital transformation.

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Temenos acquires hTrunk for data lake architecture

Geneva-headquartered banking software firm Temenos has agreed to acquire hTrunk, an Indian big data and analytics solutions provider for the banking industry. Financial details were not disclosed.

Temenos expects to strengthen its analytics product and help banks use big data technologies as well as implement modern data lake architecture, which will “unlock the value of their data”, according to a company statement. hTrunk’s data lake product ingests, blends, stores and processes both structured and unstructured data in real-time for the creation of  next-generation, analytically-driven banking applications.

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WSJ: Apple, Goldman Sachs Team Up on Credit Card Paired With iPhone

Apple and Goldman Sachs Group plan to start issuing this spring a joint credit card paired with new iPhone features that will help users manage their money. Both companies are seeking new revenue sources as their bread-and-butter businesses struggle, the WSJ reported.

The card will be rolled out to employees for testing in the next few weeks and officially launch later this year, according to people familiar with the matter. The companies hope to lure cardholders by offering them extra features on Apple’s Wallet app, which will let them set spending goals, track their rewards and manage their balances, the people said.

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Accenture partners for decision-making AI with Splice Machine, takes minority stake

Accenture made an equity investment in Splice Machine, a data platform for operational artificial intelligence (AI), expected to help clients better manage large data transformation projects, enable improved, faster decision-making and encourage innovation at scale. Accenture’s investment is part of a $16 million funding round that included GreatPoint Ventures.

Splice Machine’s platform brings together transaction data, analytical data and machine learning. Combined with Accenture’s technical and industry expertise, this will help companies predict events such as customer churn, impending fraud or anticipating the next purchase by a customer all within a specific industry context.

As part of the partnership, Accenture will be a preferred systems integrator for Splice Machines platform globally. The minority equity investment and partnership were undertaken through Accenture Ventures, which identifies, partners with and strategically invests in the most promising innovations in the market to quickly scale disruptive innovation.

Monte Zweben, co-founder and CEO of Splice Machine said in a statement: “Whether humans or machine learning models are making the decisions, access to data and computation must be blazingly fast. We are working with Accenture to embed AI into our clients’ decision-making process through our integrated data platform, enabling them to deliver smart customer experiences.”

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Securitize and OTCXN team up for non-custodial end-to-end DSO service

Securitize has announced a new strategic relationship with OTCXN, a live blockchain-powered capital markets infrastructure company for institutional traders to trade digital assets and FX while eliminating the settlement risk inherent in traditional systems.

OTCXN’s technology incorporates key blockchain functionality, providing cryptographically provable ownership of assets on custodial blockchain ledgers and pre-trade risk checks, representing a critical reduction in risk over the traditional centralized systems based on post-trade settlement.

The OTCXN platform can be integrated with Securitize’s compliance platform in issuing digital securities and connecting to their investors. Securitize is a compliance platform and protocol for issuing and managing digital securities on the blockchain, including dividends, distributions, and share buy-backs, and its DS Protocol for digital securities and exchanges has the highest adoption rate in the industry

OTCXN is in discussions with regulated entities that could partner with OTCXN to address potential regulatory requirements that may arise in connection with facilitating the exchange of digital securities.

Read the full release

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