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Lydia partners with Tink to improve open banking features

French fintech startup Lydia is going to work with financial API startup Tink for its open banking features in its app. Lydia started as a peer-to-peer payment app and now has 4 million users in Europe.

Lydia’s vision has evolved to become a financial super app that lets you control your bank accounts and access various financial services. In France, you can connect your Lydia account with your bank account using Budget Insight’s Budgea API.

Over the coming weeks, Lydia is going to switch over and use Tink for most clients going forward. If you have a bank account in a small French bank, Lydia might still use Budget Insight for those accounts.

“It’s going to be a progressive rollout and we’ll use the best service depending on our users,” Lydia co-founder and CEO Cyril Chiche told me.

Open banking is a broad concept and covers many different things. In Lydia’s case, we’re talking about two features in particular — account aggregation and payment initiation.

In the app, you can connect your bank accounts and view the most recent transactions. This feature is important if you want to become the go-to financial app on your users’ home screen.

As for payment initiation, as the name suggests, it lets you start a SEPA bank transfer from a third-party service. For instance, you can transfer money from your bank account to your Lydia wallet directly in the Lydia app. You can also move money between multiple bank accounts from Lydia.

Tink provides a single API that manages all the complexities of the information systems of European banks. An API is a programming interface that lets two different services talk and interact with each other. Tink does the heavy lifting and translates each banking API into a predictable API that you can use for all banks.

Since 2018, banks have to provide some kind of API due to Europe’s DSP2 regulation. It’s been a slow start as many French banks still don’t provide a usable API. But it’s slowly evolving.

Tink’s API supports 15 financial institutions in France, including major banks, N26, Revolut and American Express. And it covers a dozen European markets, which is going to be important if Lydia wants to grab more users outside of its home country.

“At first, it’s not going to add new things to the app. But it will allow us to provide features in a very stable environment and at a European scale,” Chiche said.

“We want to have the most uniform product across different markets,” he added later in the conversation.

Pay with your card or with your bank account

When you first install Lydia and want to pay back a friend, you associate your debit card with your Lydia account. The startup charges your card before sending money to your friend.

If open banking APIs become the norm, you could imagine grabbing money from someone’s bank account directly instead of paying card processing fees. But this sort of features is nowhere near ready for prime time.

“What made us choose card payments is that it’s a stable system with widespread usage — and it works every time. When you’re dealing with payments, it has to work every single time,” Chiche said.

Lydia isn’t changing anything on this front for now. But you could imagine some changes in a few years. “We are the beginning of a new system that is not going to be ready within the next 18 months,” Chiche said.

Cards also provide many advantages, such as the ability to chargeback a card. And card schemes have been trying new things, such as the ability to transfer money directly from a card to another card. So you’re not going to ditch your Mastercard or Visa card anytime soon. But Chiche thinks there will be some competition in Europe between DSP2-ready banks and card schemes. European consumers should see the benefits of increased competition.

In other news, Lydia usage dropped quite drastically during the full lockdown earlier this year. But transaction volume has bounced back since then and reached all-time highs. The company processes €250 million in transactions every month and it is currently adding 5,000 new users every day.

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Months-old Uni raises $18.5 million seed round to expand India’s credit card market

The credit card industry in India appears to be stuck. According to industry estimates, between 30 million to 35 million people in the country today have at least one credit card, with up to 58 million being in circulation. Compare this to almost 1 billion debit cards.

One reason the vast majority of the population has not made the cut is because they don’t have a credit score. And so few people have a credit score because banks and credit card companies still rely on age-old methodologies to determine someone’s creditworthiness. For example most banks in India are only comfortable issuing credit cards to individuals who have full-time employment with one of a few hundred companies listed in dated spreadsheets the banks maintain.

Nitin Gupta, a veteran in the financial services business, has co-founded Uni

Nitin Gupta, through his new startup Uni, wants to address some of these issues. And he is one of the few individuals in the country who is positioned to do it. He co-founded PayU India, and then ran ride-hailing firm Ola’s financial services business.

During his tenure at PayU, the startup established a dominance in the payments processing business in the country. And at Ola, he launched Olamoney Postpaid, a service that allows customers to pay for their rides at a later stage. Olamoney, which was valued at $250 million last year, is now one of the largest financial services businesses in the country.

Serious VCs are now willing to bet on Gupta’s new venture.

On Tuesday, Uni announced it has raised $18.5 million in its seed financing round led by Lightspeed and Accel . The startup currently does not have a product, but it took Gupta only two months in the middle of a global pandemic to raise what is one of the largest seed financing rounds in India.

Jayanth Kolla, founder and chief analyst at consultancy firm Convergence Catalyst, said, an “$18.5 million seed funding for a two-month old startup without even a product or an MVP yet — basis purely on the founder’s credentials and history — is the first instance of a pure-play Silicon Valley type funding in India.”

In an interview with TechCrunch, Gupta said at Uni he is joined by two more senior executives — Laxmikant Vyas and Prateek Jindal — who have stellar records in the financial services business.

He declined to reveal what exactly Uni’s product — or line of products — would look like, but suggested that Uni is building the modern age consumer credit card.

“It would seem very obvious when it comes out, and people will wonder why nobody else thought of it,” he said, adding that he is working with multiple banks on partnerships.

The adoption of digital payments has grown exponentially in the country in the last five years, but the credit card business is still struggling to make inroads, he said, adding that he sees an opportunity to expand the credit card base to 200 million over the next five years.

“Nitin and Uni’s team are passionate about unlocking the power of financial services for millions of Indian consumers using new tech-powered solutions,” Bejul Somaia​, a partner at Lightspeed India, said. “We are excited about their mission and proud to support them from day one.”

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Asana up 39% and Palantir still holding as both direct listings hit the public markets

Two direct listings in one day. Lots to talk about.

Asana started trading just a bit after noon Eastern today, quickly zooming to roughly $29 a share in early trading this afternoon. We are still waiting for the first trades of Palantir to hit the market.

Asana’s reference price was revealed yesterday by the NYSE, and it was set for $21 a share. The company had roughly 150 million shares of stock outstanding on a fully diluted basis, which gave it a pre-market reference value of $3.2 billion. Palantir for its part was assigned a reference price of $7.25 a share, giving it a $16 billion implied valuation. At its current share price, Asana is valued at roughly $4.4 billion.

The two companies trade on the NYSE, with Asana under ticker ASAN and Palantir under the ticker PLTR.

For both companies, which are well capitalized, a direct listing seemed to be the right approach to give early employees and other insiders a liquidity option while continuing to maintain tight control of the ship. One difference between the two initiatives is that Asana has no lockup for employee and other insider shares as is typically customary with a direct listing. Palantir pioneered a lockup provision with a direct listing that will allow only roughly 29% of the company’s shares to be available potentially for trading today. The remainder of those shares become eligible for sale over the coming months.

As with all direct listings, no shares are offered by the company upon market debut, and the reference prices published by the NYSE are imaginary if important mental benchmarks for where bankers believe a hypothetical price lies for these two companies.

As my colleague Jon Shieber described a few weeks ago, Asana is an interesting entry into the markets as a long-time SaaS company stalwart that continues to lose buckets of revenue. Despite fast revenue growth of roughly 71%, the company lost $118.6 million on revenues of $142.6 million in fiscal 2020 (Asana has a Feb 1 fiscal year calendar, so those figures are for the bulk of 2019).

The company was last valued at $1.5 billion in late 2018. It secured a bit more than $200 million in venture financing since its founding in 2009, and its founders Dustin Moskovitz and Justin Rosenstein hold large stakes in the company of roughly 36% and 16.1% respectively.

Over at Palantir, which we have covered extensively the past few weeks, the company is even more of an outlier, with large-contract government sales that accrue over many years. The company reported a total of 125 customers, losses of $580 million on revenues of $743 million last year, and projected revenues of just above $1 billion for 2020.

While Palantir’s reference price was below the final secondary trades held by the company in early September before it closed the window in the run up to its IPO, that price was well-above the average trading of the past 18 months.

For both companies now, the public markets beckon, and the first public quarterly results are coming due here in a few weeks. You can read more about Asana on the company’s investor relations page. Like so much else at Palantir, it doesn’t have an investor relations page (yet?) as of the time of writing this article, but presumably the company will want to connect with investors at some point in the near future, one would hope.

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Palantir’s reference price values it at roughly $16 billion

Palantir is preparing for its public debut tomorrow morning on the NYSE (after 17 years), and now we are getting some data on how the company’s shares are being valued by investors.

The NYSE announced that the company, which will be traded under the ticker PLTR, will have a reference price of $7.25 per share. Palantir is pursuing a direct listing, and so a reference price is merely a guide from the market to investors, and does not represent an actual trading price.

According to Palantir’s after-hours filing with the SEC this afternoon, the company has 1.16 billion Class A shares, 484 million Class B shares and 1 million Class F shares on its cap table outstanding today, or a total of roughly 1.64 billion. Only Class A shares will trade, and Class B and F shares are convertible to Class A shares on a one-to-one basis. On a fully diluted basis, which Palantir says represents 2.2 billion shares total according to its most recent S-1 filing, the company is valued at $16 billion. The difference between those two aggregate numbers comes from outstanding stock performance grants, warrants and other financial instruments.

The company will begin trading tomorrow morning, and as it is pursuing a direct listing, it will raise no primary capital as part of its debut.

We looked at Palantir’s stock price over time based on internal trades, which have gone from around $5 a share at the beginning of January 2019 to $9.17 a share earlier this month as the company prepped its prospectus to go public. A reference price of $7.25 is below those last trades, and also below a $10 price point that The Wall Street Journal reported on last week from Palantir bankers.

Of course, a reference point, much like an IPO price, is a mostly made-up number, and the real value of these shares will emerge from the market tomorrow as traders buy up shares from insiders.

In its afternoon filing today, Palantir said that approximately 475 million shares will be available for trade, with the remainder of the company’s shares locked up. Palantir pioneered a direct listing with a lockup, and so we will also see how this configuration affects its share price in the coming months as more shares hit the market.

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Singapore-based Syfe, a robo-advisor with a human touch, raises $18.6 million led by Valar Ventures

Dhruv Arora, the founder and CEO of Singapore-based investment platform Syfe

Syfe, a Singapore-based startup that wants to make investing more accessible in Asia, announced today that it has closed a SGD $25.2 million (USD $18.6 million) Series A led by Valar Ventures, a fintech-focused investment firm.

The round also included participation from Presight Capital and returning investor Unbound, which led Syfe’s seed funding last year.

Founded in 2017 by chief executive officer Dhruv Arora, Syfe launched in July 2019. Like “robo-advisors” Robinhood, Acorns and Stash, Syfe’s goal is to make investing more accessible. There is no minimum amount required to start investing and its all-inclusive pricing structure ranges from .4% to .65% per year.

Syfe serves customers based in 23 countries, but currently only actively markets it services in Singapore, where it is licensed under the Monetary Authority of Singapore. Part of its new funding will be used to expand into new Asian countries. The startup hasn’t disclosed its exact user numbers, but says the number of its customers and assets under management have increased tenfold since the beginning of the year, and almost half of its new clients were referred by existing users.

Other Valar Ventures portfolio companies include TransferWise, Xero and digital bank N26. In a statement about Syfe, founding partner Andrew McCormack said, “The potential of Asia as a region, with a fast-growing number of mass-affluent consumers aiming to grow their wealth, combined with the pedigree of the team and strong traction, makes Syfe a very compelling opportunity.”

Before starting Syfe, Arora was an investment banker at UBS Investment Bank in Hong Kong before serving as vice president of product and growth at Grofers, one of India’s largest online grocery delivery services. While at UBS, Arora worked with exchange-traded funds, or ETFs.

“I could see how a lot of institutions and some ultra-high-net worth individuals who are clients of the bank were using the product, and I thought it was a great tool for individuals, too,” Arora told TechCrunch. “But what I realized was that people are actually not very aware of how to use ETFs.”

In many Asian countries, people prefer to put their money away in bank accounts or invest in real estate. As interest rates and property prices stagnate, however, consumers are looking for other ways to invest. Syfe currently offers three investment products. The first is a global diversified portfolio with a mix of stocks, bonds and ETFs that is automatically managed according to each investor’s chosen risk level. The second is a REIT portfolio based on the Singapore Exchange’s iEdge S-REIT Leaders Index. Finally, Syfe’s Equity100 portfolio consists of ETFs that include stocks from more than 1,500 companies around the world.

Other Asia-focused “robo-advisor” services include Stashaway and Kristal.ai, and Grab Financial also recently announced a “micro-investment” product. Arora acknowledges that in the future, there may be more entrants to the space. Right now, however, Syfe’s main competitor is the mindset that banks are still the best way to save money, he added. Part of Syfe’s work is consumer education, because “it was culturally ingrained in a lot of us, myself included, to keep your money in the bank.”

Syfe differentiates with a team of financial advisors, including former employees of Goldman Sachs, Citibank and Morgan Stanley, who are on hand for user consultations. Arora said most Syfe users talk to advisors when they first join the platform, and about 20% of them continue using the service. Questions have included if people should use a credit card to invest, which Arora said advisors dissuade them from doing because of high interest rates.

“We definitely want to be a tech-first platform, but we understand there is a value, especially as you deal with some of the older audiences who are in their 50s and 60s, who are still adapting to these technologies,” he said. “They need to know that you know there is somebody out there to look after their products.”

While Syfe’s average user is aged between 30 to 45, one growing bracket is people in their 50s who are motivated to save for retirement, or want to create a supplement to their pension plan. Users typically start with an initial investment of about SGD $10,000 (about USD $7,340), and about four out of five users regularly top up that amount.

Some users have tried other investment products, like investment-linked insurance plans, but for many, Arora says Syfe is their first introduction to investing in stocks, bonds and ETFs.

“We’ve realized that a fair number of them are quite well-to-do professionals in their field, in their mid- to late 30s, who amassed a significant amount of wealth but never really had a chance to invest, or the right advice on how to invest,” said Arora. “I think this has been one of the biggest revelations for us and it made us realize we should have a human touch in our platform.”

The platform manages its products with a mix of an investment team and algorithms that help avoid human bias, said Arora. Syfe’s algorithms take into account growth versus value, the market cap of a stock, volatility and sector momentum. To balance risk, it also analyzes how individual assets correlate with other assets in the same portfolio.

Arora said Syfe is currently in advanced talks with regulators in several countries and expects to be in at least two new markets by the end of next year. It also plans to double the size of its team and create more consumer financial products.

During COVID-19, Arora said Syfe’s portfolios experienced significantly lower corrections than indexes like the S&P, so only a few users withdrew their money. In fact, many invested more.

“I feel people have been rethinking their finances and the future,” he said. “As banks cut interest rates across the world, including in Singapore, many of them have started looking at other options.”

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Following TechCrunch reporting, Palantir rapidly removes language allowing founders to ‘unilaterally adjust their total voting power’

Well, that was fast.

This morning, I analyzed Palantir’s newly published fifth amendment of its S-1 filing with the SEC as it pursues a public direct listing on the NYSE. I called the company “not a democracy” after it added new provisions to create a special mechanism called “Stockholder Party Excluded Shares” that would, in the language of Palantir, allow the company’s trio of founders to “unilaterally adjust their total voting power” at will, now and into the future.

Well, Palantir has now filed a sixth amendment with the SEC just a few hours after it filed its previous amendment, and the company has removed all references to this special mechanism from its SEC filing.

The 19 mentions of “Stockholder Party Excluded Shares” and multiple sections where the mechanism were discussed and explained have now been entirely excised. In addition, the company’s line about its founders having the capability to “unilaterally adjust their total voting power” has also been similarly removed.

Outside of those changes, the two different versions of the company’s S-1 filing are essentially identical. And for those keeping score from this morning, in this tenth rendition of the company’s public offering documents including its previous draft registration statements, the latest filing includes 168 mentions of “voting power” — identical to the number this morning. Here’s an updated chart:

It’s a quick about-face for the enterprise software company, which has spent weeks prepping for its direct listing, originally scheduled for September 23 and which has since been moved back to September 29. While corporate governance has certainly gotten weaker over the past few years, Palantir’s newly introduced language this morning stretched the definition of shareholder governance quite frankly to its breaking point. Walking back those changes was the right call.

There’s no telling whether the SEC, NYSE, potential investors in the direct listing, executives or insiders pushed for these changes. However, companies rarely make such rapid changes with their SEC filings (then again, I’ve never seen an IPO with so many amendments in the first place, so we are in uncharted territory). Palantir remains in an SEC-mandated quiet period.

We’ll continue to monitor developments as Palantir heads to the public markets, presumably next week.

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Chamath launches SPAC, SPAC and SPAC as he SPACs the world with SPACs

SPACs are going to rule the world, or at least, Chamath’s future portfolio.

Chamath Palihapitiya, the founder of Social Capital, has already tripled down on SPACs, the so-called “blank check” vehicle that takes private companies and flips them onto the public markets. His first SPAC bought Virgin Galactic last year, and his second SPAC bought Opendoor this week in a blockbuster deal valuing the instant home sale platform at $4.8 billion, less cash. His third SPAC officially fundraised in April, and has yet to announce a deal.

Now, it looks like he’s going to double down on his triple down. After the bell rung on Wall Street this Friday, the venture capitalist filed three new SPAC vehicles with the SEC. Social Capital Hedosophia Holdings Corp. IV has a headline value of $350 million, Social Capital Hedosophia Holdings Corp. V has a headline value of $650 million and Social Capital Hedosophia Holdings Corp. VI has a headline value of $1 billion.

Those headline values are targets: each SPAC will need to go through an investor roadshow process and officially raise capital before they can begin trying to find an acquisition target. Each SPAC is independent, and may share investors or have entirely independent investors around the table.

The three new SPACs share similar managers: Palihapitiya himself; Ian Osborne, who manages Hedosophia; Steven Trieu, the CFO of Social Capital; and Simon Williams, the chief administration officer of Hedosophia.

However, each has a different fifth director, who perhaps sheds some light on how each SPAC differs in strategy. Nirav Tolia, a co-founder and CEO of popular social network Nextdoor, is joining the fourth SPAC. Jay Parikh, a former head of engineering at Facebook, who left earlier this year, is joining the fifth SPAC. And finally, Dick Costolo, the former CEO of Twitter and current venture capitalist, is joining the sixth SPAC.

We’ve been talking about the accelerating pace of SPACs this year, and that appears in microcosm here around these Social Capital vehicles. It seems as though Palihapitiya and Hedosophia not only have great ambitions for these vehicles, but are increasingly mechanizing the process of fundraising them and taking advantage of markets that seem excited for any avenue toward growth.

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Interswitch to revive its Africa venture fund, CEO confirms

Pan-African fintech company Interswitch plans to fire up its corporate venture arm again—according to CEO Mitchell Elegbe—who spoke at TechCrunch Disrupt on Wednesday.

The Nigerian founder didn’t offer much new on the Lagos-based firm’s expected IPO, but he did reveal Interswitch will revive investments in African startups.

Founded by Elegbe in 2002, Interswitch pioneered the infrastructure to digitize Nigeria’s then predominantly cash-based economy. The company now provides much of the rails for Nigeria’s online banking system that serves Africa’s largest economy and population of 200 million people. Interswitch has expanded to offer personal and business payment products in 23 Africa countries.

The fintech firm achieved unicorn status in 2019 after a $200 million equity investment by Visa gave it a $1 billion valuation.

Reviving venture investing

Interswitch, which is well beyond startup phase, launched a $10 million venture arm in 2015 that has been dormant since 2016, after it acquired Vanso—a Nigerian fintech security company.

But Interswitch will soon be back in the business of making startup bets and acquisitions, according to Elegbe. “We’ve just certified a team and the plan is to begin to make those kinds of investments again.”

He offered a glimpse into the new fund’s focus. “This time around we want to make financial investments and also leverage the network that Interswitch has and put that at the disposal of these companies,” Elegbe told TechCrunch.

“We’ll be very selective in the companies we invest in. They should be companies that Interswitch clearly as an entity can add value to. They should be companies that help accelerate growth by the virtue of what we do and the customers that we have,” he said.

Recent venture events in African tech have likely pressed Interswitch to get back in the investing arena. As an ecosystem, VC on the continent has increased (roughly) by a factor of four over last five years, to around $2 billion in 2019. But most of that has come from single-entity investment funds, while corporate venture funding (and tech M&A activity) has remained light. That’s shifted over the last several months and the entire uptick has occurred in African fintech around entities that could be viewed as Interswitch competitors.

In July, Dubai’s Network International acquired Kenya -based payment mobile payment processing company DPO for $288 million. Shortly after the acquisition, DPO’s CEO Eran Feinstein said the company would pursue more African acquisitions on its own. In June, another mobile-money payment processor, MFS Africa, acquired digital finance company Beyonic. And in August, South Africa’s Standard Bank—Africa’s largest by assets and lending—acquired a stake in fintech security firm TradeSafe.

Since the rise of Safaricom’s dominant M-Pesa mobile money product in Kenya, fintech in Africa has become infinitely larger and more competitive. The sector has hundreds of startups and now receives nearly 50% of all VC investment on the continent.

The opportunity investors and founders are chasing is bringing Africa’s large unbanked population and underbanked consumers and SMEs online. Roughly 66% of Sub-Saharan Africa’s 1 billion people don’t have a bank account, according to World Bank data, and mobile-based finance platforms have presented the best use-cases to shift that across the region.

Interswitch has established itself as a leader in the Africa’s digital finance race. But it’s hard to envision how it can maintain or extend that role without an active venture arm that invests in and acquires innovative, young fintech startups.

No news on IPO

Elegbe had less to offer on Interswitch’s long-anticipated IPO. Asked if the company still planned to list publicly, he offered up a non-answer answer. “At this point in time we’re focused on growing the business and creating value for our customers and that is the our primary focus.”

When pressed “yes or no” on whether an IPO was still a possibility Elegbe confirmed it was. “We have private equity investors and at some point in the life of the business they want exits.” he said. “When it is time for them to exit there are various options on the table and an IPO is an option.”

There’s been talk of an Interswitch IPO for years. In 2016, Elegbe told TechCrunch a dual-listing on the Lagos and London Stock Exchanges was possible. Then word came through other Interswitch channels that it was delayed due to recession and currency volatility in Nigeria in 2017. In November 2019, a source with knowledge of the situation told TechCrunch on background, “an IPO is still very much in the cards; likely sometime in the first half of 2020.” Then came the Covid-19 crisis and the accompanying global economic slump, which may have delayed Interswitch’s IPO plans yet again.

If and when the company goes public, it would be a major event for Nigerian and African fintech. No VC backed fintech firm on the continent has listed globally. Exits for Interswitch’s investors would likely attract to Nigeria and broader Africa more VC from major funds—many of whom remain on the fence about startup opportunities on the continent.

Focus on Africa

On global product expansion, Interswitch plans to maintain an African focus for now, Elegbe explained. “There are enough opportunities for Interswitch on the continent. We’d like to be in as many African countries as possible…and position Interswitch as the (financial) gateway to the continent,” he said.

Elegbe explained the company would continue to work through alliances with major financial services firms to open up global financial access for its African client base. In August 2019, Interswitch launched a partnership that allows its Verve cardholders to make payments on Discover’s global network.

CEO Mitchell Elegbe concluded his Disrupt session with some perspective on balancing the stigmas and possibilities of doing business in Nigeria. Over recent years the country has shifted to become an unofficial hub for big tech expansion, VC investment, and startup formation in Africa. But Nigeria continues to have a difficult operating environment with regard to infrastructure and is often associated with political corruption and instability in its Northeast region due to the Boko Haram insurgency.

“Nigeria has a very large population and a very large market. We have lots of challenges that need to be solved, but it makes sense to me that lots of money is finding its way to Nigeria because the opportunity is there,” he said.

Elegbe’s advice to tech investors considering the country, “Don’t take a short-termist view. There are good people on the ground doing fantastic work—honest people who want to make impact. You need to  seek those people out.”

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Jefa is a challenger bank for women without a bank account

Meet Jefa, a startup that is building a challenger bank specifically designed for women in Latin America. The company is building a product that focuses on solving the problems that women face when opening a bank account and managing it. It is participating in the Startup Battlefield at TechCrunch Disrupt.

“There are 1.4 billion people in the world without a bank account. Out of those 1.4 billion, nearly 1.3 billion are women,” founder and CEO Emma Smith told me.

In many ways, bank accounts have been designed by men and for men. Even if you look at fintech startups, most of them have male founders. There is already a handful of challenger banks in Latin America, such as Nubank, Banco Inter, Banco Original and Ualá. But most challenger banks focus on mature markets, such as Europe and the U.S. Smith thinks that targeting women in emerging countries represents a huge market opportunity.

Jefa has carefully examined the reasons why women in Latin America often don’t have bank accounts or are unsatisfied with their bank accounts.

For instance, banks often ask you to hold a minimum balance even though women statistically earn less than men. Banks tell you to come to a branch to open an account even though many families only have one car and taking the bus can be a hassle. Banks have overly confusing products and don’t invest in marketing channels for women.

“It’s for all those reasons that we thought we need a fully digital solution that is branchless,” Smith said. “We have no minimum balance requirement; all you need is a government-issued ID and you can sign up in three or four minutes.”

Image Credits: Jefa

When Jefa launches in a few months, opening an account will be free. You get an account and a card a few days later. The service has a built-in savings feature that lets you round up purchases and set goals.

There will be a reward program called “It pays to be a woman.” Based on your purchases, you’ll earn points on hygiene products, going to the gynecologist, etc.

At first, you’ll be able to convert those points to cash back. Later, you could imagine redeeming your points at places that matter to women.

Jefa users will be able to send and receive free peer-to-peer payments within the app. And when it comes to withdrawing and topping up your account, Jefa is building a network of merchants to securely manage cash.

The company is also working on a credit building platform that should work a bit like Chime’s equivalent feature.

Jefa will be launching first in Central America, starting with Costa Rica and Guatemala. There are already 50,000 people on the waiting list. The company knows that it’ll be important to build a community around its product. So you can expect a community forum so that you can discuss finance with other Jefa users.

Banks tend to have a bad reputation because they are soulless entities that don’t necessarily understand your needs. It can be frustrating when they keep telling you that you don’t meet the criteria. Creating a digital-first bank represents an opportunity for vertical banks. And Jefa is a good example of that.

Image Credits: Jefa

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Groww, an investment app for millennials in India, raises $30M led by YC Continuity

Even as more than 150 million people are using digital payment apps each month in India, only about 20 million of them invest in mutual funds and stocks. A startup that is attempting to change that by courting millennials has just received a big backing.

Bangalore-headquartered Groww said on Thursday it had raised $30 million in its Series C financing round. YC Continuity, the growth-stage investment fund of Y Combinator, led the round, while existing investors Sequoia India, Ribbit Capital and Propel Ventures participated in it. The new round brings three-year-old startup Groww’s total raise-to-date to $59 million.

Groww allows users to invest in mutual funds, including systematic investment planning (SIP) and equity-linked savings. The app maintains a very simplified user interface to make it easier for its largely millennial customer base to comprehend the investment world. It offers every fund that is currently available in India.

In recent months, the startup has expanded its offerings to allow users to buy stocks of Indian firms and digital gold, said Lalit Keshre, co-founder and chief executive of Groww, in an interview with TechCrunch. Keshre and other three co-founders of Groww worked at Flipkart before launching their own startup.

Groww has amassed over 8 million registered users for its mutual fund offering, and over 200,000 users have bought stocks from the platform, said Keshre. The new fund will allow Groww to further expand its reach in the country and also introduce new products, he said.

One of those products is the ability to allow users to buy stocks of U.S.-listed firms and derivatives, he said. The startup is already testing this with select users, he said.

“We believe Groww is building the largest retail brokerage in India. At YC, we have known the founders since the company was just an idea and they are some of the best product people you will meet anywhere in the world. We are grateful to be partners with Groww as they build one of the largest retail financial platforms in the world,” said Anu Hariharan, partner at YC Continuity, in a statement.

More than 60% of Groww users come from smaller cities and towns of India and 60% of these have never made such investments before, said Keshre. The startup is conducting workshops in several small cities to educate people about the investment world. And that’s where the growth opportunities lie.

“India is seeing increased participation of retail investors in financial markets — with 2 million new stock market investors added in the last quarter alone,” said Ashish Agrawal, principal at Sequoia Capital India, in a statement.

Scores of startups such as Zerodha, ETMoney, INDWealth and Cube Wealth have emerged and expanded in India in recent years to offer wealth management platforms to the country’s growing internet population. Many established financial firms such as Paytm have also expanded their offerings to include investments in mutual funds. Amazon, which has aggressively expanded its financial services catalog in India in recent months, also sells digital gold in the country.

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