Fintech weekly deals and partnerships round-up

Coinbase acquires blockchain tracking startup to mitigate criminality

Coinbase announced it has acquired Neutrino, a blockchain intelligence platform. Financial details were not disclosed.

“By analyzing data on public blockchains, Neutrino will help us prevent theft of funds from peoples’ accounts, investigate ransomware attacks, and identify bad actors. It will also help us bring more cryptocurrencies and features to more people while helping ensure compliance with local laws and regulations,” Coinbase wrote in a statement.

The technology will play an important role in legitimizing crypto, making it safer and more accessible for people all over the world, the company added. Neutrino will continue to operate as a standalone business based out of Coinbase’s London office.

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Macquarie invests in US fintech Digital Reasoning

Nashville-headquartered Digital Reasoning announced a strategic investment from Australia’s Macquarie Group, as well as a partnership to explore new financial services use cases for its artificial intelligence technology and expand into Australia and Asia.

Macquarie’s investment is an extension of the Series D-1 $30 million funding round that Digital Reasoning completed in March 2018. As announced previously, the round was led by BNP Paribas with participation from Barclays, Square Capital, Goldman Sachs, Nasdaq, Lemhi Ventures, HCA, and the Partnership Fund for New York City.

Miki Edelman, head of Strategic Client Solutions, Cash Equities at Macquarie Group, said in a statement: “We are excited to partner with Digital Reasoning to further develop capital markets use cases and accelerate AI innovations.”

Digital Reasoning’s tech focuses on AI for Language Process Automation (LPA) and Human Behavioral Insights (HBI) in finance and health.

Prakash Ramachandran, CFO of Digital Reasoning, said in a statement: “The insights we provide mitigate risk, improve revenues, and increase efficiencies. This investment from Macquarie underscores these proficiencies along with our ability to work within regulatory frameworks.”

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Cassini Systems and Margin Reform launch service for uncleared margin rule regulations

Cassini Systems and Margin Reform, a management consultancy, announced a new joint service to assist all buy-side participants with understanding and implementing solutions for Uncleared Margin Rule (UMR) regulations.

This on-site UMR Scoping and Planning Workshop Service highlights the crucial steps and timelines – tailored to each firms’ needs – to comply with the Uncleared Margin Rules. This includes back-testing and benchmarking, where required.

Cassini is a fintech with offices in New York and London, and has an analytics platform for OTC trading, combining risk, limits, fees, margin and collateral.

Through a combination of Margin Reform’s experience in delivering UMR programmes and Cassini’s expertise in OTC margin calculation, analysis and optimization, it will provide a guide to effectively manage UMR and ISDA SIMM implementation. Furthermore, it includes a portfolio analysis snapshot of the margin and collateral impact of in-scope bilateral derivatives.

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Alibaba’s Ant Financial buys UK’s WorldFirst for reported $700mn

Payments fintech WorldFirst announced that it’s becoming part of Ant Financial Services, operator of payment and lifestyle platform Alipay and a related company of the Alibaba Group. Financial details were not disclosed but numerous media reports claimed it was a $700 million deal.

WorldFirst will become a wholly-owned subsidiary of Ant Financial and continue to operate as a UK-headquartered and regulated business with global operations, including China mainland and Hong Kong.

Alipay works with over 250 overseas financial institutions and payment solution providers to make cross-border payments for Chinese travelers overseas, as well as overseas customers who purchase products from Chinese e-commerce sites.

In a statement, Ant Financial said: “The tie-up will add WorldFirst’s international online payments and virtual account products to Alipay’s broad range of technology solutions, enabling us to reach a greater number of customers, especially in the fast-growing area of cross border e-commerce.” This includes branching out to SMEs in the US, the statement added.

Earlier this month, WorldFirst closed its US operation in an attempt to avoid having the planned takeover derailed by American regulators, according to the FT.

Fintech-as-a-Service Rapyd raises $40mn led by Stripe

Rapyd announced a $40 million series B financing round led by General Catalyst and Stripe, with participation from Target Global, IGNIA and other payments and fintech companies. Rapyd describes itself as a global fintech-as-a-service platform that enables businesses and consumers to pay or be paid however they choose, using any payment method or cash for local and cross-border e-commerce.

With this investment, Rapyd will expand its technology platform that supports any local or cross-border commerce use case requiring local payments, such as bank transfers, e-wallets, and cash for local acceptance and payouts. The fintech addresses a significant and growing market opportunity as more than half of all transactions worldwide are facilitated via bank transfer, but merchants find it increasingly difficult to digitally enable local payment methods and process cross-border sales that are critical for international expansion.

Mike Lobanov, general partner of VC firm Target Global, said in a statement: “We see the future in seamless payments with more and more transactions happening inside closed ecosystems through e-wallets. The global economy needs a modernized infrastructure which Rapyd is building.”

In addition to enabling local payments Rapyd also provides: single Point of reconciliation and settlement of all funds across 65 currencies and the ability to payout in over 170 countries; advanced real-time foreign exchange services, that on average, provide a lower cost to clients and their consumers, and are more profitable, due to advanced FX hedging technology; and comprehensive global Know Your Customer (KYC), Anti-Money Laundering (AML)/Counter Financing Terrorism (CFT) services.

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PE firm Thoma Bravo acquires mortgage finance cloud-based platform provider for $3.7bn

Ellie Mae announced an agreement to be acquired by Thoma Bravo, a leading private equity investment firm, in an all-cash transaction that values Ellie Mae at some $3.7 billion. Ellie Mae is a cloud-based platform provider for the mortgage finance industry.

“Since the founding of Ellie Mae more than 20 years ago, our mission has been simple – to automate everything automatable for the residential mortgage industry,” said Jonathan Corr, president and CEO of Ellie Mae. The transaction is expected to close in the second or third quarter of 2019 and has a month-long “go-shop” period for a superior offer.

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PPM America goes live on CloudMargin platform for collateral automation

CloudMargin announced that PPM America, a subsidiary of UK-based Prudential, has gone live on its platform. The investment manager has some $120 billion AuM, which includes $9.31 billion managed by PPM Finance, an affiliate that manages commercial mortgage loans and certain real estate investments.

PPM is now using CloudMargin for its entire collateral management margin workflow, collateral optimization and trade reconciliation with counterparties and futures commission merchants (FCMs). In addition to utilizing the gateway to SWIFT, PPM is also using the hub’s access to AcadiaSoft MarginSphere for margin call messaging for collateral payment processing.

The agreements and types of transactions the workflow accommodates include: ISDA collateral service agreements for bilateral over-the-counter (OTC) derivatives; cleared OTC transactions; exchange-traded futures and options; Master Securities Forward Transaction Agreements (MSFTAs) for mortgage-backed securities and TBA (To-Be-Announced) mortgage-backed instruments.

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CanDeal partners with six Canadian Banks to Create Market Data Hub

The six largest Canadian banks have partnered with CanDeal to create the country’s first fixed income and derivatives market data hub. The Data-as-a-Service (DaaS) business, DataVault Innovations, intends to produce pricing and analytics data for market participants and regulators.

While presently ingesting data from each of the six banks, DataVault Innovations is actively seeking a strategy for all other marketplace data contributors.

DataVault Innovations will be a consolidation and distribution point for Canadian over-the-counter (OTC) bond and derivatives data, which will be available directly to end-users as well as third-party distributors. It will also provide evaluated pricing, risk and analytics services to help comply with regulatory mandates, improve internal risk models and address other business requirements for market participants. DataVault Innovations is building the technology foundation and will be implementing global governance standards to fulfil pricing benchmark administrator duties.

“The creation of a central pricing and analytics data hub is an important leap forward for the Canadian markets,” said Jayson Horner, CEO and co-founder of CanDeal in a statement. “By recognizing data rights for contributors while expanding access to broad, high quality OTC data, DataVault Innovations will enable the entire industry to vastly improve risk management and regulatory compliance. Consolidation of market data is also a significant step towards the formation of a suite of benchmark products for the domestic markets.”

The new services will adhere to global best practices in terms of data management, big data technologies, information security (Infosec), and leverage regulatory frameworks such as Basel lll and IOSCO principles. DataVault Innovations will benefit from CanDeal’s experience as a nationally regulated ATS and experience in the Canadian OTC markets.

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