JPMorgan is backing a startup that solves cash-flow headaches for small businesses. Here's how it works.
Trovata.io, a startup that streamlines cash reporting and forecasting for small- and medium-sized companies, closed $4.3 million in additional funding from JPMorgan and VC firm FINTOP Capital. The fintech, which is geared towards companies with revenue between $20 million and $5 billion, had already raised $5.3 million from the investors in April 2019. "As we design our own analytics and forecasting engine, this is sort of how we would do it," Jason Tiede, global head of innovation for wholesale payments for JPMorgan, told Business Insider. Click here for more BI Prime stories.
A fintech that specializes in helping small- to medium-sized businesses understand and analyze their cash flow just nabbed a significant amount of capital for itself. Trovata.io, a San Diego-based startup that streamlines cash reporting and forecasting, closed its seed round with an additional $4.3 million in funding from JPMorgan and venture capital firm FINTOP Capital. The capital is a planned extension of the $5.5 million Seed round the two firms initially co-led in April. While the additional funding was planned ahead of time, the cash infusion comes at an opportune time. As many industries suffer as a result of the impact of the novel coronavirus, companies understanding their cash flow has never been more important. Trovata.io connects companies' accounting systems to their various bank accounts via application programming interfaces, building analytical and visualization tools on top of the data streamed from accounts. While that process has become big business in retail banking, thanks to startups like Plaid and Yodlee, a gap in the market exists for companies with revenue between $20 million and $5 billion. "We're using that data to drive and automate a lot of these these clunky workflows that take a long time to build and maintain for finance users," Brett Turner, Trovata. io founder and CEO, told Business Insider. "You need this information, especially with what we're going through right now. Everybody wants to know: How much cash do we have across all of our banks? How much cash are we going to have in the next three months, six months, nine months?" Jason Tiede, global head of innovation for wholesale payments for JPMorgan, told Business Insider the bank was first introduced to Trovata.io via a client who was working with the startup. He said his team was blown away by the offering. Trovata.io addresses a problem Tiede said he hears constantly from customers: with so many bank accounts and money floating around, it's tough to get a handle on where it all is. "They're essentially was this gap between what banks offer that provides real-time, single-bank views and then what ERP systems provide, which is not so much around cash positioning and forecasting but more so around managing their suppliers and general ledgers," Tiede said, referring to enterprise resource planning software. "As we design our own analytics and forecasting engine this is sort of how we would do it." Turner declined to share any numbers around the growth the company has seen in recent weeks as companies scramble to get a better sense of their finances. He did say there has definitely been an "uptick" in business. A big benefit of the startup is how quickly it can onboard new clients. Thanks to APIs at numerous banks, a process that traditionally could have taken months to set up can now be done in as little as a few hours, Turner added. Tiede echoed similar sentiments, adding that have connections already in place with the big banks goes a long way. "The feedback from our clients is that the onboarding piece is just so seamless and so fast and then everything around the analytics and all the tools is already pre-built," he said. "The other feedback we consistently hear from the client side, and we've had more than a handful in the last couple weeks come on, is basically we can tell this has been built by a treasurer or CFO. It isn't a tech person that's trying to figure out what a treasurer or CFO wants."SEE ALSO: JPMorgan slashed how long it takes to test out fintechs from 9 months to 3 weeks with a new process that could save it millions as it looks to buy, invest in, or work with more young companies SEE ALSO: JPMorgan and Goldman Sachs are finally beginning to embrace fintech startups. Here's how they test the waters before committing to working with them. SEE ALSO: Payments-and-lending startup Fundbox just nabbed fresh funding, and now its CEO has his sights set on making it the 'Visa of B2B' Join the conversation about this story » NOW WATCH: Why thoroughbred horse semen is the world's most expensive liquid
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More than 1,000 UK startups collapsed under COVID-19. We asked 6 founders how they pulled through the pandemic.
Summary List Placement The COVID-19 pandemic sparked a wave of panic among investors in the early...Summary List Placement The COVID-19 pandemic sparked a wave of panic among investors in the early months of 2020, with many investors fleeing early-stage startup deals. By March, almost one-third of investors had pulled out of UK seed funding deals amid fears that the pandemic was about to trigger a global recession, according to data from SeedLegals. And new research – put together by coworking space Plexel and market database Beauhurst – has revealed that more than 1,000 startups have collapsed in the UK since. The data shows a grand of 1,067 high-growth businesses filed for administration, liquidation or dissolution since the start of lockdown in the spring. In an effort to save Britain's burgeoning tech scene from going under, Chancellor Rishi Sunak devised a £250 million "Future Fund", managed by the state-funded British Business Bank, and designed to save promising startups from the brink of collapse. The scheme has handed out some £588.8 million ($700 million) in assistance to date, exceeding its original target, across 590 companies. But in spite of Sunak's best intentions, some founders attacked the scheme's "egregious terms", and warned that it risked excluding already-marginalized founders from disadvantaged backgrounds. Business Insider spoke to six UK startup founders that were forced to endure the pandemic without support from the Future Future. They shared experiences shot with tough calls, personal sacrifices, and determination. Read their stories below: Soccer startup Flair revamped its entire business model to stay alive Since launching in September 2018, "Flair Football", as it was previously known, had attracted more than 20,000 young soccer players to its app, where they could create profiles, keep track of match outcomes, and swap skills. But when Prime Minister Boris Johnson instituted a nationwide lockdown in March, outdoor sport was brought to a standstill – and Flair with it. "The pandemic caught everyone off guard to some extent, but because our app relied on kids playing outdoor sport, we were hit particularly hard," cofounder and CEO Nii Cleland told Business Insider. With user numbers tanking and no end in sight, Cleland and the rest of Flair's top team opted for a radical change in direction: shutting down the app and transforming the company from a sports platform to social enterprise, focuing on giving young people a voice on issues such as racial inequality. Speaking about the decision, Cleland said: "We spoke to our board members and we were just completely honest. We put together a pitch where we pitted our current proposition versus the new one, and asked: 'Who wants to stick with us?' "You just have to be completely honest with yourself. Looking at the current situation, you have to think: 'Would I try and start my company today, in this climate?' If the answer's no, it probably means you should do something else." Flair already has a number of partnerships with schools across the UK in place, and will start by surveying students and staff to better understand levels of racial inclusivity and awareness. Asked about the Future Fund, Cleland said: "It was one of those things where...they couldn't save every startup. They had to put some criteria in place, and in the end, it just didn't make sense for us to pursue it. "I mean, we furloughed our employees, and that's a form of support in itself, we were really grateful for that. It bought us a lot of time." Farmstand's CEO cut costs by shutting down its bricks-and-mortar operation Since launching in 2016, plant-powered cloud catering startup Farmstand had raised more than $7 million in funding from the likes of Kindred Capital and Bray Capital. Founded by serial entrepreneur Steven Novick, the firm boasted around 60 employees at its height – but was cut down to just 10 workers under COVID-19. Under normal circumstances, Farmstand operated a "showroom" in Covent Garden, a popular London tourist destination, but Novick took the decision to divest from all its bricks-and-mortar operations and move the business entirely online in mid-March. "We were totally shut down for three months," he said. "To be candid, I sold my home and put the money straight back into the business." Months after selling his stake in a plush Primrose Hill property, where he had lived for the better part of 14 years, Farmstand was finally able to resume operations in July, distributing plant-powered, sustainable meals to outdoor markets en masse. Asked about the Future Fund, he said there had been a "serious lack of communication" on the part of the government, and accused officials of "not caring about small businesses." A spokesman for the British Business Bank said "wherever possible [it] worked to provide a timely and clear explanation as to why applications did not meet the published criteria." In the past few weeks, Farmstand has crowdfunded more than £900,000 (or $1.1 million) on Seedrs – exceeding its target within the first two days – and has weeks of fundraising left to go. "We've already signed a number of 12-month contracts with clients," Novick said. "And we expect the next deal to tip us over into profitability." BYP – the online network for Black professionals – crowdfunded more than $1 million With more than 40,000 members across 65 countries, BYP is the leading networking platform for Black professionals worldwide. Despite its global presence, founder and CEO Kike Oniwinde was told BYP was ineligible for Future Fund support because it hadn't raised £250,000 before April 19. At the time of writing, BYP had successfully crowdfunded more than £820,000 – more than triple the required sum – on Seedrs, but remained ineligible because it wasn't raised prior to that date. "It doesn't make a lot of sense," Oniwinde told Business Insider. "I was disqualified straightaway because I hadn't raised the money before this arbitrary deadline, even though we've now got close to a million in our pocket. "We know we have issues with Black founders accessing investment in this country, so I was disappointed to see more thought hadn't been put into how they would tackle that. "But to be honest, we're used to it ... It's like 'OK whatever, we've been here before'. We just cracked on." A spokesperson for the British Business Bank told Business Insider that 64% of all funding granted had gone to startups with either BAME-only or mixed ethnicity senior management teams. Insect farming startup Entocycle ditched its Series A round – but kept on raising funds Entocycle, the insect farming startup working to make protein production more sustainable, is a Y Combinator alum and previously raised more than $3 million in funding. But because that funding had come in the form of convertible loans and other means, rather than equity, the firm couldn't apply for Future Fund support. "Pretty much all YC companies would have missed out on the Fund under those terms," said founder and CEO Keiran Whitaker. "The scheme felt very piecemeal," he added. "So many cutting-edge companies wouldn't have been able to access this kind of support, despite being the best in their fields." With a nationwide lockdown preventing employees from traveling to France and tending to their insect colonies, Whitaker decided to put the brakes on their ongoing Series A funding round. "We kept fundraising but switched to a 'pre-Series A' round, instead," Whitaker told Business Insider, adding the company was set to close around $2 million in new investments. "We managed to weather the storm, but we could definitely have done with that government support at the height of the crisis." Sustainable banking startup Yayzy says it made the best of a bad situation Sustainable banking app Yayzy had only raised £120,000 (or $150,000) prior to the Future Fund's announcement, and so couldn't apply for government support. "We made the best of a not-so-great situation," cofounder and CEO Mankaran Ahluwalia told Business Insider. "We decided to put our fundraising on hold, and instead focused a hundred per cent of our efforts on product development, and engaged more closely with our beta users. "Fortunately, we're starting to see the fruits of that effort." At the time of writing, the firm had surpassed its £200,000 crowdfunding target on Seedrs by an extra £55,000 – with 29 days of fundraising to go. "I think the Future Fund and the furlough scheme were both good support measures, but the former's eligibility criteria and did exclude a good number of startups. "It would have been helpful if the Fund had been open to all startups that have gone through a previous funding round." A British Business Bank representative told Business Insider the Fund's eligibility criteria had been determined by government in consultation with industry representatives. Tutoring network startup Sophia rode the edtech boom under lockdown Recent data shows the edtech sector has been booming under lockdown, with the number of investments in the sector up 1,700% in the UK, according to SeedLegals. Tutoring network startup Sophia – cofounded by husband and wife team Melissa McBride, a former headteacher, and Dan Turner, a hedge fund manager – rode that wave, and has thus far crowdfunded more than £500,000 of investment. "We've been really lucky. Now felt like the right time to supercharge the app," Turner told Business Insider. He added that although Sophia has seen more than £250,000 of investment in the past, the firm remained ineligible because it had come from their own pockets rather than coming from external backers. "It's been good because, fundamentally, I think parents are just much more open to the idea of online learning than they ever would have been before." With business booming, the four-person startup has plans for expansion, and hopes to hire a new chief marketer in the coming months.
THE MILLENNIAL FINANCIAL HEALTH REPORT: How the largest generation is saving and managing their money, and how banks can target products and messaging to reach them
Summary List Placement This is a preview of the Business Insider Intelligence Millennial Financial Health premium...Summary List Placement This is a preview of the Business Insider Intelligence Millennial Financial Health premium research report. Purchase this report here. Business Insider Intelligence offers even more banking coverage with our Banking Briefing. Subscribe today to receive industry-changing financial news and analysis to your inbox. As the largest living generation by population, and soon income, millennials are a prime target for banks — butovergeneralizations of their financial health make it hard to attract the group. Millennials have been the subject of misinformation with regard to financial literacy, spending habits, and brand loyalty. In reality, they're encountering diverse financial milestones, and tailoring products directly to their varied needs can help banks take full advantage of the opportunity presented by serving millennials. Business Insider Intelligence conducted an exclusive survey to better understand US millennials' financial health. The Master Your Money: Learn & Plan Survey was designed by Business Insider Intelligence and fielded online from November 23 to 27, 2019, to a third-party sample of 2,007 US millennials aged 19-37. The sample was selected to closely resemble the overall US population (based on census data) on the criteria of age and gender. The results of the survey reveal fresh insights about millennials that banks and other financial services providers can use to build targeted products and tailored messaging for the group. Our data highlights three areas that are impeding this generation's financial health: debt, trouble growing savings, and lack of financial education. Millennials' debt is heavily concentrated in credit card debt, student loan debt, and auto debt. Meanwhile, low-income growth and high debt burdens have made it more challenging for them to save. These findings, and our analysis, are supported by interviews with executives from major banks, like JPMorgan Chase and Bank of America. But millennials aren't a homogenous group — rather, they behave like three "sub-generations," with distinct lifestyle habits, financial needs, and behaviors. These factors impact the sub-generations differently, making it important for banks to understand the characteristics of millennial consumers in each segment, which can sharpen acquisition and servicing strategies for banking providers. In The Millennial Financial Health Report, Business Insider Intelligence identifies strategies for banks and financial services providers to reach millennials. We identify three millennial sub-generations, the unique financial needs and challenges of each, and the ways providers can tap into them. We offer recommendations for acquiring millennial customers, encouraging them to save more, and deepening the customer relationship to become a trusted advisor. The companies mentioned in this report include: Acorns, American Express, Apple, Bank of America, BuzzFeed, Capital One, Citi, Citizens Bank, Credit Karma, Digit, Disney, Goldman Sachs, Hulu, JPMorgan Chase, Mint, Navy Federal Credit Union, Netflix, Robinhood, Santander, Sprint, Stash, US Bank, Verizon, Wells Fargo. Here are some key takeaways from the report: Millennials are estimated to be the largest living generation in the US — but the disparate financial needs of consumers at different stages of this age group can make it challenging for banks to take full advantage of the opportunity presented by serving them. They're often treated like a homogenous group, but millennials can be divided by age into sub-segments that boast different financial realities, which banks need to understand in order to effectively cater to all customers in this generation. Supporting millennials through their unique financial milestones can allow banks to form lifetime relationships with these consumers early on. Banks should take a behavioral approach where they meet consumers' specific needs based on their actions rather than try to broadly serve the generation. In full, the report: Uses primary data to identify the unique needs and challenges of each millennial sub-generation. Explores strategies banks should consider to tailor their offerings to millennials' needs in order to improve their financial health via savings tools and, in turn, cement their loyalty as customers. Supports analysis using interviews with executives from incumbent providers like JPMorgan Chase and Bank of America. Gives recommendations for banks regarding how to acquire, service, and encourage millennials to grow savings. Highlights noteworthy strategies taken by banks and third-party financial apps to reach this generation. Interested in getting the full report? Here's how to get access: Business Insider Intelligence analyzes the banking industry and provides in-depth analyst reports, proprietary forecasts, customizable charts, and more. >> Check if your company has BII Enterprise membership access to the full report Sign up for the Banking Briefing, Business Insider Intelligence's expert email newsletter tailored for today's (and tomorrow's) decision-makers in the financial services industry, delivered to your inbox 6x a week. >> Get Started Purchase & download the full report from our research store. >> Purchase & Download Now Join the conversation about this story »
Visa and Mastercard battle for fintechs — JPMorgan, Bank of America rethink branches — Snowflake's IPO soars
Summary List Placement Hi! In a word: Snowflake. That's what Wednesday was all about, as the...Summary List Placement Hi! In a word: Snowflake. That's what Wednesday was all about, as the cloud-data startup made its much-anticipated appearance on the public markets. The result? The largest initial public offering ever for a software company, raising $3.4 billion. If you're not yet a subscriber, you can sign up here to get your daily dose of the stories dominating banking, business, and big deals. Like the newsletter? Hate the newsletter? Feel free to drop me a line at firstname.lastname@example.org or on Twitter @DanDeFrancesco. Mastercard nabs fintechs from Visa I might be biased, but here's an interesting story from Shannen Balogh and I about the battle between Visa and Mastercard to nab fintech clients. Mastercard has had a string of high-profile wins among startups, including SoFi, Brex, MoneyLion and Dave. We spoke to some of the fintechs about what motivated them to make the jump, along with the Mastercard executive leading the charge to get the young companies on board. If you're interested to hear about what either of the payment giants can offer young companies, it's worth a read. Click here to read the full story. Here's what execs at Bank of America and JPMorgan are thinking about the future of brick-and-mortar branches as digital banking adoption soars For years, consumer banks have had to field questions about the future of their bank branches. The coronavirus has only accelerated those conversations, as customers have been forced to turn to digital banking. Reed Alexander compiled some recent comments from Bank of American and JPMorgan Chase executives about how they are approaching the topic. Here's the 12-page pitch deck that Alloy, a fintech that helps vet customer identities and prevent fraud, used to raise its $40 million Series B in less than a month Pitch deck alert! Here's one for the $40 million Series B fintech Alloy raised. The startup helps banks and fintechs verify customers' identities, a pressing issue as more consumers go digital for their financial needs. Check out the 12-page deck the startup used to raise the round. Odd lots: In Five Hours, Daniel Kamensky Destroyed His Career. Why? (Institutional Investor) Snowflake just had the biggest-ever software IPO. Execs at Coatue, Fidelity, and FactSet explain why they were early adopters of the company's data exchange and how it can transform Wall Street. (BI) JPMorgan Stops Paying for Junior Traders to Take Uber to Work (Bloomberg) An Influx of VC Funds Could Be Coming From Banks (Institutional Investors) The CEO of $24 billion Okta said he would be in 'serious trouble with the SEC' if he raved about his IPO the way Chamath Palihapitiya is talking about Opendoor going public (BI) A group of Nixon Peabody partners who moved to DLA Piper say they're still owed millions by their former firm, offering a rare look at the disputes that can follow a lawyer's move from one firm to another (BI) A chef at a popular chain restaurant was suspended for TikToks revealing frozen and microwaved food (Insider) Join the conversation about this story » NOW WATCH: Epidemiologists debunk 13 coronavirus myths