November 19, 2015
Founded in May 2013, 21 Inc. is the first computer with native hardware and software support for the bitcoin protocol. Developers can use it to build bitcoin-payable apps and services. The embedded mining chip launched by 21 Inc. is called BitShare; it comes in a variety of form factors and can be used for micropayments, increasing chip sales and IP licensing, or as a new way for authentication. The company recently raised $121.1 million in two rounds of funding. The most recent round took place in March 2015 when the company raised $116 million (a record in the bitcoin sector) from the set of investors which included Andreessen Horowitz, RRE Venture, chipmaker Qualcomm, and founders from companies such as eBay, PayPal, Dropbox, Expedia and Zynga. Other companies backing 21 Inc. are Cisco, Khosla Ventures, Yuan Capital, Thiel Foundation and ZhenFund.
Affirm, Inc. is a next generation financial services company that offers consumers loans at POS with smaller monthly payments. Affirm is one of several Web startups experimenting with flexible loans by calculating the risk of borrowers based on a variety of personal data points, including information gleaned from social media profiles as well as the cost being purchased, rather than relying on FICO credit scores. It then determines what rate and structured payment makes sense to offer the customer. Recently, the company raised $275 million in Series B led by Spark Capital Growth, Jefferies and Andreessen Horowitz, Khosla Ventures and Lightspeed Venture Partners. Previously, the company raised $50 million in Series A funding. Affirm was featured on LTP9 Leaderboard as one of the most promising companies in the technology-based personal lending space.
Bill.com (previously called CashView) is a platform with apps that enables businesses to get paid quickly online, pay their bills, and manage budgets and cash flow. Features offered by the company's platform include accounts payable, accounts receivable, cash flow management and pricing. Bill.com had gained recognition for its API that enables banks and financial institutions to integrate Bill.com’s service into their own websites, systems and applications. Two years ago, the company raised $38 million in a funding round led by new investors Scale Venture Partners, American Express, Bank of America, Pete Knight, Fifth Third Bank and Commerce Ventures. Since its founding in 2006, the company has raised more than $70 million. Earlier this year, Bill.com raised $50 million from new backer Silicon Valley Bank and existing investors. The existing network of the company in the past 12 months more than doubled to over 600,000 members. The amounts transferred through Bill.com reached $19 billion annually. Bill.com was listed by LTP as one of the 13 B2B payments companies to watch out for. Concentrated, deep research on B2B payments market can be found here.
CircleUp is an online private company investment platform that focuses on innovative consumer products and retail brands. The company provides accredited investors free access to direct investments in high-growth consumer product and retail private companies that were previously difficult to identify and access. As the largest equity-based crowdfunding site, CircleUp also provides a wide-ranging, sophisticated investor network that includes retail and consumer product industry experts, venture capital, private equity and other financial professionals, business leaders, angel investors. The company has helped over 120 companies raise over $135 million. In January 2015, the company raised $22 million to invest in consumer brands or its crowdfunding platform. In November 2015, CircleUp raised $30 million in Series C funding led by Collaborative Fund. The company is working on a new technology platform to simplify business for investors and entrepreneurs.
Founded in June 2012, Coinbase is a bitcoin wallet and platform where merchants and consumers can transact with the digital currency bitcoin. The startup raised $75-million in January 2015, setting a record for a bitcoin company at the time. Investors include the New York Stock Exchange, Andreessen Horowitz, and banks USAA and BBVA. The round supposedly puts Coinbase’s value at $400 million. Coinbase is focused on establishing its developer platform; the company’s API provides a P2P lending service called BTCjam. According to the official website, Coinbase has 2,800,000 users, 4,300,000 wallets, 41,000 merchants and 7,000 developer apps. The company has a total funding of $106 million from investors like Andreessen Horowitz, Ribbit Capital, Adam Draper, SVAngel, Gerg Kidd, USV, DFJ Growth, IDG Ventures, NYSE Ice, Funders Club, USAA, Start Fund, BBVA and Y Combinator.
Credit Karma is a credit-monitoring site that provides free credit scores, reports and monitoring as well as insights into the meaning of that. Based on the user's credit profile, the website shows product recommendations, like credit cards and loans. The company recently raised $175 million in Series D funding round, bringing its valuation to $3.5 billion. Among its investors are Tiger Global Management, Valinor Management and Viking Global Investors LP. The company has raised $368.5 million in total equity funding. The website has more than 40 million members and taps into $2.3 trillion of America’s household debt information. Credit Karma provides its members with free financial information monitoring, data-driven resources and personalized recommendations.
Jumio is a leading identity management and credentials company that helps businesses reduce fraud and increase revenue while providing a fast and seamless customer experience. The company uses proprietary technology to reduce customer sign-up & checkout friction and verify credentials issued from over 120 countries in real-time Web and mobile transactions. The company’s clients include companies from Fortune 500 and FTSE 350 organizations in the financial services, sharing economy, retail and others. Jumio is backed by Andreessen Horowitz, Citi Ventures and Facebook Co-Founder Eduardo Saverin. Among Jumio’s clients are United Airlines, Airbnb, EasyJet, Yobetit.com, Entropay, etc. The company raised almost $37 million in total from several rounds starting 2012. In 2014, Jumio raised extra funds which are undisclosed.
Being the second-most profitable company in alternative lending, Lending Club takes an honorable place in our list of the hottest startups from Silicon Valley. Lending Club is the world’s largest online marketplace connecting borrowers and investors. The LTP team has been actively following the company and analyzing its activity. Lending Club was first launched as a Facebook application and became the first P2P lending company to register with the Securities and Exchange Commission (SEC) and complete an IPO. It is not only America’s but also the world’s largest online credit marketplace. Google purchased a stake in Lending Club in 2013. Earlier this year, Lending club announced that it reached $11 billion in loans on its platform. In February 2015, Lending club partnered with Alibaba.com, one of the leading platforms for global wholesale trade owned by Alibaba Group, which made Lending Club the exclusive solution for point-of-sale business financing of up to $300,000 for Alibaba’s millions of US business buyers.
LendUp is a fair and transparent online lender for short-term loans for those who cannot use bank services. The company also wants to help the unbanked and underbanked from falling prey to nonbank sources, which generally charge outrageous fees and interest rates. LendUp uses analytics to evaluate creditworthiness and analyze risk. The company recently raised $50 million in credit debt facility from Victory Park Capital. With the recent funding, the company raised a total of $64 million in four rounds from 17 investors including Google Ventures, Data Collective, QED Investors, etc.
Motif is an online brokerage built on thematic portfolios of up to 30 stocks and ETFs, which can be customized and traded for as low as $9.95. Motif Investing is changing the face of online investing through an innovative, transparent social platform that allows individuals and investment advisors to invest in stock and bond portfolios built around everyday ideas and broad economic trends. Motif is a registered broker-dealer and a member of SIPC. The company raised more than $126 million in multiple rounds including the latest round of $40 million in January 2015. Among the investors are Foundation Capital, Goldman Sachs, Ignition Partners and Norwest Venture Partners. Board members include former SEC Chairman Arthur Levitt and former Wall Street executive Sallie Krawcheck. Motif is ranked #4 in CNBC's Disruptor 50 list according to the official website, and has more than 9,100 published community-created motifs.
NerdWallet is a free tool to find the best credit card offers, CD rates, savings and checking accounts, insurance and other financial products. The startup is aimed to bring clarity to consumer finance decisions. In May 2015, the company announced to raise $64 million in Series A funding round led by Institutional Venture Partners (IVP) with participation from RRE Ventures, iGlobe Partners and additional angel investors. NerdWallet also has $33 million in flexible loan facility from Silicon Valley Bank; the funding gives it more than $100 million to solidify its standing as a leader in online personal finance. The company makes money from fees earned by matching consumers with appropriate financial products, such as credit cards. In addition to its own tools and reporting, NerdWallet connects consumers with a community of independent, vetted financial experts and medical billing specialists who provide personalized advice.
PayNearMe (previously Kwedit) is the first technology company to offer consumers an electronic way to pay with cash using their mobile device. The PayNearMe Bill Pay app enables consumers to pay for cable and phone bills, insurance, utilities, rent, loans, and much more with cash. PayNearMe has been helping government agencies and businesses accept cash payments remotely since 2009. The company’s merchants include Greyhound, California Department of Child Support Services and others. Consumers can pay bills on their own schedule, in their own neighborhood, in less than one minute at nearly 17,000 retail locations in PayNearMe’s nationwide network, which includes 7-Eleven, Family Dollar and ACE Cash Express stores nationwide. The company raised more than $71 million in multiple rounds, including the most recent $14.7 million raised in April 2015. Among investors are GSV Capital, Khosla Ventures and August Capital. PayNearMe also has business partnerships lined up with Amazon, Greyhound and Sochitel UK.
Personal Capital Corporation:
Personal Capital is the smart way for people to understand, manage and grow their net worth. Award-winning online tools provide total transparency into investment accounts. Licensed Personal Capital financial advisors then use this information to provide accurate recommendations to clients, improving efficiency and supporting money management principles that lead to the best outcomes possible. A pioneer in digital financial advisory services, Personal Capital is backed by leading Silicon Valley venture capital firms and financial institutions. These include Corsair Capital, Blackrock, USAA, Crosslink Capital, Institutional Valley Partners and Venrock. With nearly $2 billion in assets under management, Personal Capital helps clients feel more confident about their financial future. The free financial tools are available for desktop, iPhone, iPad, Android and now Apple Watch. Over 850,000 people use Personal Capital to track over $187 billion.
Prosper is another P2P lending platform with more than 2 million members. The company has surpassed $5 billion in loans funded through its platform since its inception and a record $1.070 billion in loans in a quarter along with a record daily average. As reported by the company, debt consolidation continues to be the most frequent use case with approximately 288,000 loans taken for this purpose. Prosper Funding LLC is a subsidiary of Prosper Marketplace, Inc. Prosper Marketplace’s investors include Sequoia Capital, BlackRock, Institutional Venture Partners and Credit Suisse NEXT Fund. Prosper Marketplace LLC recently acquired spending/credit tracking app BillGuard for $30 million and leading cloud-based patient financing platform American HealthCare Lending for $21 million in cash. In April 2015, the company was valued at $1.9 billion with total equity funding of $360 million.
Robinhood, a Silicon Valley upstart, allows young investors to try out investing skills with as little as a few dollars. A simple interface lets investors buy and sell stocks with a minimum of taps and no fees. The company charges for the ability to buy stocks on margin or credit and also makes money by collecting interest on users’ cash balances. The total funding of the company reached $66 million from a group of investors including New Enterprise Associates (NEA), Index Ventures, Ribbit Capital and Social Leverage. Other companies backing Robinhood are Google Ventures and Andreessen Horowitz. Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for cash claims).
SoFi is a market leader in student loan refinancing with over $4 billion in loans issued. The company is focusing on student loans, mortgages and personal loans. SoFi’s proprietary approach takes merit and employment history into account to offer customized credit products. In 2014, SoFi became the first marketplace lender to secure investment grade ratings from S&P and Moody’s for senior notes in securitization. In October this year, the company has raised $1 billion in a Series E funding round led by Japanese media giant SoftBank Group, marking the largest single financing round in the FinTech space to date. Some of the investors for the platform are Lakestar, Marco Rossi (VP Service Contracts SBU at Dresser Rand Group, Inc.), Institutional Venture Partners (IVP) and Ron Suber (President at Prosper). In June 2015, the company was valued at $4 billion with total equity funding of $1.4 billion.
Square is a software platform that enables retail stores and restaurants to accept mobile payments via iOS and Android devices. The company’s POS service offers tools for every part of a business, from accepting credit cards and tracking inventory, to real-time analytics and invoicing. Square also offers sellers financial and marketing services, including small-business financing and customer engagement tools. The payment company is said to have earned $560.6M in revenue in the first half of 2015, which is 51% more than in the first half of 2014. On November 6, 2015, Square filed for an IPO. At the upper band, the company is valued at $4.19 billion, significantly lower than their latest funding round valuation of $6 billion in October 2014. In August 2015, Square launched an Apple Watch-compatible application that allows users to make P2P payments through Apple Watch’s interface with a few taps. With recent news on shares discount due to the completion of IPO, company's valuation dropped to $3 billion.
Stripe, an online payments company that is focused on providing the technical, fraud prevention and banking infrastructure required to operate online payment systems. Stripe is available for business in about 20 countries with a few countries in private beta phase. The company’s unified set of APIs and tools enables businesses to accept and manage online payments instantly. Stripe has raised its valuation from $3.57 billion in 2014 to $5 billion by taking an investment from Visa. Previously, the company raised $190 million from investors like PayPal co-founders, Sequoia Capital, Box CEO Aaron Levie, Khosla Ventures, Andreessen Horowitz and others.
Wealthfront is the world’s largest automated investment service with over $2.5 billion in client assets. It manages a diversified, continually rebalanced portfolio of index funds on customers’ behalf at a very low cost and in an extremely tax-efficient manner. Wealthfront makes it easy for anyone to get access to world-class, long-term investment management without the high fees or steep account minimums. The platform monitors and reallocates funds 24/7 automatically, rebalancing with tax efficiency in mind. It also invests in ETFs that track indexes across major asset classes. The company raised more than $129 million in multiple rounds, including the most recent $64 million last year. Among its investors are Spark Capital, Index Ventures, Ribbit Capital, Greylock Partners, DAG Ventures and a list of private investors. Wealthfront is included in the detailed and exhaustive report on US Personal Finance and Money Management Market by LTP as well as in the list of 14 leading online investment platforms.
WePay is one of the leading providers of payments-as-a-service for online platforms and marketplaces. The company powers payments for thousands of online platforms, including Care.com, Constant Contact, FreshBooks, GoFundMe and Meetup. WePay protects its partners from risk and regulatory exposure while supporting a seamless experience for their end-users. In 2014, the company launched a white-label, API-based service called WePay Clear to offer a no-fraud guarantee. WePay Clear is an upgrade to WePay Connect, another API-based product which the company had launched back in 2011 to offer a no-fraud guarantee. WePay Connect has signed 1200 platforms with $1 billion in processed transactions to date. In May 2015, WePay raised $40 million in Series D funding to expand services globally. All existing institutional investors, including Highland Capital Partners, August Capital, Continental Investors and Ignition Partners, participated in the last round, which brought WePay’s total financing to $75 million. In January 2015, Google entered a partnership with WePay to integrate the Instant Buy APIs into 200,000 e-commerce stores.
Founded in 2001 and backed by Sequoia Capital, New Enterprise Associates, SVB Capital and Fidelity Ventures, Xoom is an international money transfer service that allows users to securely transfer money online. The company went public in 2013 and has been featured in the LTP9 leaderboard. Xoom was acquired by PayPal in the beginning of 2015. Xoom transferred more than $7 billion for its 1.3 million customers over the 12 months preceding last April, primarily on mobile devices. Xoom’s service allows users to send money from any device to friends and family in 30 countries, including Latin America, the Philippines, India, Europe, Australia and South Africa.
Yodlee, a technology and applications platform that powers digital financial solutions in the cloud, is an aggregator for a variety of financial apps for consumers and small businesses. Yodlee gathers data for a number of consumer-facing programs (like Credit Karma, LearnVest, BillGuard). The company operates in more than 10 countries with more than 750 clients to power innovative FinTech offerings for consumers. Yodlee’s financial cloud allows banks, Internet service companies and third-party financial app developers to track consumer financial information as well as enables banks to offer consumers a variety of financial services. The company has a base of around 16.5 million consumers on subscription fees. Yodlee also offers two APIs for the finance market. Yodlee provides its personal-finance apps to 11 of the country’s top 20 banks by assets. The company went public in October 2014 and generated revenue of $98.6 million till June 30, 2015. Envestnet, Inc., a leading provider of unified wealth management technology and services to financial advisors, will acquire all of the shares of Yodlee in a cash-and-stock transaction valued at $18.88 per share on a fully-diluted equity value basis. After incorporating cash and cash equivalents of $70 million, the transaction reflects a value of about $590 million. The deal is expected to close in the fourth quarter of 2015 or the first quarter of 2016.