Blockchain News: Align Commerce Obtains Insurance Covering Blockchain Payments

Richard Kastelein reports in Blockchain News:

Next-generation global payments provider Align Commerce today announced that it is enhancing protections for its small - and medium - sized business (SMB) clients sending payments internationally, by obtaining insurance to safeguard against losses as a result of a physical or cyber-security breach, theft, or operational errors and omissions. These policies, together with Align's commitment to operating robust regulator and compliance programs, helps build customer confidence in using its modern cross-border Blockchain payment solutions. 

Go here to read the full article.

CODE: Movie Screening & Leader Perspectives

Fenway Summer Ventures, Softtek and the Pan American Development Foundation (PADF) invite you to have fun, think and engage. Come join us and hear trailblazing women talk about bridging the gender gap in the digital age and watch this insightful film.  Meet fellow entrepreneurs, investors, scientists, programmers and others across DC's burgeoning tech ecosystem. 

About the Movie

CODE exposes the dearth of American female and minority software engineers and explores the reasons for this gender gap and digital divide. The film highlights breakthrough efforts that are producing more diverse programmers and shows how this critical gap can be closed. 

Tech jobs are growing three times faster than our colleges are producing computer science graduates. By 2020, there will be one million unfilled software engineering jobs in the USA. Through compelling interviews, artistic animation and clever flashpoints in popular culture, CODE documentary examines the reasons why more girls and people of color are not seeking opportunities in computer science and explores how cultural mindsets, stereotypes, educational hurdles and sexism all play roles in this national crisis. Expert voices from the worlds of tech, psychology, science, and education are intercut with inspiring stories of women who are engaged in the fight to challenge complacency in the tech industry and have their voices heard. CODE aims to inspire change in mindsets, in the educational system, in startup culture and in the way women see themselves in the field of coding.

This event is one of many happening around the country leading to the Global Entrepreneurship Summit taking place June 23-24 at Stanford University in Palo Alto.

For for more information on the speakers and to register please go here

Entrepreneurial Hustle: Limitless Driver of Global Prosperity

Javier Saade will join the 7th Annual Global Entrepreneurship Summit taking place in Silicon Valley next month. Read why he is so passionate about supporting entrepreneurship:

Hola, me llamo Javier. I was born and raised in Puerto Rico and now live in Washington DC with my wife Lori and our rescue mutt Piper. To say that I consider myself lucky is true but I also have hefty reserves of energy and curiosity.

The professional experiences that have shaped me blend entrepreneurial, investment, advisory and executive leadership roles in companies big and small, including McKinsey & Co, Booz Allen, Abbott Labs, Bridgewater Associates, The GEM Group, Pacific Community Ventures, Paradigm Ventures and Air America Media. It’s been a wild ride.

Go here to read the full post.

Javier Saade Joins FSV

Fenway Summer Ventures Adds Javier Saade as a Managing Director

Former Associate Administrator, Chief of Investment & Innovation, U.S. Small Business Administration joins as a Managing Director.

WASHINGTON – Fenway Summer Ventures (“Fenway Summer”), a venture capital firm focused on early-stage investments in financial services and financial technology, today announced that Javier Saade has joined the firm as a Managing Director.

Fenway Summer backs entrepreneurs who are pioneering new distribution models, rewiring technology, advancing next-generation analytics, and creating capital-efficient marketplaces.  The firm capitalizes companies that have the potential to change the financial services industry, with a focus on sectors that include capital markets, payments, lending, asset management, enterprise services and insurance.  

“Javier is a high-impact addition to our team at Fenway Summer Ventures,” said Raj Date, Managing Director and chair of the investment committee at Fenway Summer Ventures. “He brings decades of experience and a track record of success as an investor, entrepreneur, operating executive, and policymaker. He will offer valuable insight to our investment decisions and to our portfolio of over two dozen companies.”

“Since we started Fenway Summer three years ago, we’ve always focused on building a team uniquely positioned at the intersection of finance, technology, and policy,” Date continued.  “Javier’s a perfect fit.”

Saade recently served as Associate Administrator, Chief of Investment & Innovation, U.S. Small Business Administration where he oversaw the $26B AUM Small Business Investment Company (SBIC) program, the $2.5B per year Small Business Innovation Research (SBIR) & Small Business Technology Transfer (STTR) programs, and the $6.9M Growth Accelerator Fund.  Concurrently, he held a seat at the U.S. Securities and Exchange Commission’s Advisory Committee on Small & Emerging Companies.  He worked closely with the White House on a wide range of innovation, economic, investment and financial policies. Since inception, the programs he led have invested $120B in over 320,000 high-growth startups businesses. 

Prior to his public service he spent 20 years in various investment, entrepreneurial, operational and advisory roles at firms that include McKinsey & Company, Booz Allen & Hamilton, Bridgewater Associates, The GEM Group, Paradigm Ventures, Pacific Community Ventures, Air America Media and Abbott Laboratories. He is a Trustee of the Pan American Development Foundation, an Executive in Residence at Columbia University’s Columbia Technology Ventures and a Senior Fellow at Georgetown University’s Beeck Center for Social Impact & Innovation.  He holds an MBA from Harvard, an MS from Illinois Institute of Technology and a BS from Purdue University.

“I was attracted to Fenway Summer’s relentless drive and its important mission,” said Javier Saade. “The firm and its amazingly talented professionals are uniquely positioned to back entrepreneurs that are building and scaling disruptive businesses and driving change in an industry that desperately needs it. I look forward to contributing to the firm’s growth, success and industry-leading influence.”

Marketplace Lending Goes Off the Grid

Since our inception, FSV has mainly focused on making investments in the U.S. and other developed economies. One of our newest portfolio companies, Lendable, is a notable exception: Lendable provides risk analytics and structuring solutions to connect loan originators in the developing world with the global debt capital markets. At the same time, we view Lendable as a natural extension of some of our core investment themes to new geographies. Indeed, like some of our U.S.-based partners, Lendable is harnessing next-generation analytics and capital-efficient marketplace models to help clients lend to customers that previously could not be served.

Even as marketplace lending has taken off in the first half of this decade, with some analysts expecting annual loan volumes to approach $300 billion by 2020, the reach of these online platforms has been largely confined to the U.S., China, U.K., and a handful of more developed markets. In the developing world, the difficulty of underwriting consumers and small businesses with little to no formal financial history, and the absence of credit bureaus or even reliable methods for verifying identities, has for the most part limited institutional credit channels to cooperatives and microfinance institutions. Recently, though, the growth innovative models like pay-as-you-go (PAYG) financing, in which consumers pay for or lease durable goods in small increments predominately over mobile phones, has begun to change the equation. PAYG consumer purchases lower the cost of collections for lenders and improve the credit quality of customers by financing assets that improve customers’ well-being and financial health. 

Perhaps the most prominent example to date of PAYG finance in the developing world is the off-grid solar market, where dozens of companies are bringing small solar-powered systems to the more than 1 billion households without access to conventional electricity. Off-grid solar solutions allow energy-poor customers to charge mobile phones, light their homes, and replace expensive and dangerous forms of energy like kerosene, batteries and diesel. While solar costs have come down dramatically, individual home systems can still run from several hundred to as much as a thousand U.S. dollars. Distributors therefore face an up-front financing need when selling to customers earning a few dollars a day.

PAYG and asset financing, often enabled by mobile payments, has the potential to make electricity affordable for off-grid households worldwide by matching payment to consumption of energy. Some of the early PAYG solar companies have attracted millions of dollars of equity investment from venture capitalists and energy firms to serve a market that could eventually reach $50 billion. And solar is just the beginning—similar models are being used to finance everything from motorcycles to agricultural equipment, assets that allow the borrower to displace expenses or generate more income right away. 

The biggest constraint to growth in the PAYG and asset financing markets today is debt capital. These businesses will demand massive amounts to finance their customers—off-grid solar alone will require an estimated $40 billion in lending capital through 2030. Though risk/return characteristics are attractive, frontier market asset finance is a nascent asset class that most fixed income investors do not yet understand, and no meaningful infrastructure to finance receivables exists. As a result, originators are struggling to get the debt financing they need to grow.

Enter Lendable, a dynamic team of experts in development finance, analytics, software engineering and financial marketplaces. They’ve already conducted risk analysis on some of the first securitizations in off-grid solar and have amassed the largest database of customer-level transactions in the space. They’re currently completing the first deals in the Lendable Marketplace, a portal in which investors can purchase receivables across multiple originators. The Marketplace offers a standardized and replicable structure for financing asset-backed loan books, informed by Lendable’s proprietary credit and portfolio risk engine and supported by an online portfolio monitoring dashboard and back office resources. We’re excited to help Lendable fulfill their mission of unlocking large-scale debt financing for some of the most innovative and worthy businesses operating in the developing world today, and we’re proud to welcome them to the Fenway Summer family. 



Blog Post: Why We Launched Fenway Summer Ventures

Around this time a year ago, we began the process of launching Fenway Summer Ventures.  As we celebrate this anniversary, it seems fitting to take a pause to remember why we began this adventure in the first place.  

It’s no secret that over the last several years the financial services industry has undergone massive disruption.  Many factors contributed to this, but the most important, in our view, have been the severe global financial crisis and the legal and regulatory response it engendered; rapid technology advances; related shifts in consumer behavior; and evolving capital market dynamics.

This disruption has resulted in an unprecedented moment for innovation in financial services.  Four emerging trends in particular stand out:

1)    New distribution models:  Fintech firms are harnessing technology advances and changes in consumer and small business behavior to offer financial products at a lower cost, with a better user experience, and in more targeted ways than ever before.  

2)    Rewired financial infrastructure:  Other fintech firms are reinventing back-end financial infrastructure, for example, by using lower-cost rails to transfer money around the globe and providing more efficient and secure ways to onboard customers.

3)    Next-generation analytics:  The proliferation of data and the development of new analytical techniques have allowed fintech firms to offer financial services to new or previously unprofitable segments.

4)    Capital-efficient marketplaces:  New marketplace models have emerged that allow buyers and sellers of financial assets to find each other more efficiently than in the past, opening up significant new sources of capital and bypassing traditional intermediaries.

The number of entrepreneurs launching companies to reinvent financial services is staggering.  There is no shortage of venture capital fueling these ambitions.  Accenture recently estimated that global investment in fintech ventures tripled in 2014 to over $12 billion.  

We didn’t decide to launch FSV because we thought that the industry needed more equity capital alone. Instead, we created FSV to fill what we thought was a hole in the market.  The success or failure of fintech ventures often turns on key issues — regulatory issues, capital markets issues, credit issues — in which traditional venture capital firms often don’t have deep expertise.  Our team has that expertise, and it allows us to complement our co-investors and guide the entrepreneurs we back.

We launched FSV because we believe that our team’s expertise in these areas and strong industry relationships make us a strategic partner for entrepreneurs solving important problems at the intersection of finance, technology, and law.  If this sounds like you, please reach out; we would love to speak with you.

Wall Street Journal: Circle Gets First ‘BitLicense,’ Releases Circle Pay, New Service

Paul Vigna reports in The Wall Street Journal:

A Boston-based bitcoin startup became the first firm to receive a license, allowing it to offer digital-currency services in New York.

The New York Department of Financial Services issued it first “BitLicense” to Circle Internet Financial Inc., a firm founded two years ago by Jeremy Allaire and backed by Goldman Sachs Group Inc.

The goal of BitLicenses is to create a framework that allows digital-currency firms to build their services, but at the same time to protect consumers with various requirements, such as anti-money laundering compliance and cyber security guidelines.

Go here to read the full article.

Wall Street Journal: More Early Funding Pours Into Online Lending Data Startup

Telis Demos reports in the Wall Street Journal:

PeerIQ, the online lending marketplace data provider that was seeded with money from big Wall Street names including John Mack and Vikram Pandit earlier this year, has raised even more seed money.

The New York-based startup has yet to even do a Series A fundraising, so getting more cash already is a sign that investors are still really, really excited about the world of alternatives to bank lending—even as shares of the first to list, LendingClub Corp. and On Deck Capital Inc., have tumbled since debuting.

This time, the investment is from alternative investment firm Victory Park Capital and Fenway Summer Ventures, the venture capital firm run by former Consumer Financial Protection Bureau deputy director Raj Date. PeerIQ now counts two former regulators among its backers, Mr. Date and Arthur Levitt, former chairman of the Securities and Exchange Commission.

Go here to read the full article.

Business Wire: XOR Raises $4.2M in Series A Funding Led by Fenway Summer Ventures

AUSTIN, Texas--(BUSINESS WIRE)--XOR Data Exchange, a data analytics company that creates transparent permission-based data exchanges today announced that it has secured $4.2 million in Series A funding led by Fenway Summer Ventures with significant participation from existing investors Chicago Ventures and KGC Capital.

Founded in 2014, XOR’s patent-pending data platform enables companies to participate in cross-industry sharing of information in support of fraud and credit risk, compliance, authentication and marketing initiatives. Exchange members maintain ownership over their data, including who is allowed access and how much can be shared. In return for sharing data, exchange members gain access to the valuable information provided by other exchange members, for example, to better identify fraud and credit risks in new financial services or telecommunications account openings.

Go here to read the full article.


American Banker: KYC Data-Sharing Venture Trunomi Raises $3M

Tanaya Macheel reports in American Banker:

Trunomi, a startup that aims to simplify account sign-ups and know-your-customer compliance for banks, has raised $3 million.

The company said it will use the proceeds of the funding round to develop its data-sharing technology, which it touts as a way to give consumers greater control of their personal information while eliminating duplicative paperwork.

Trunomi is one of several organizations working on technological solutions for the often conflicting demands of anti-money-laundering regulations and fraud prevention, on the one hand, and privacy, cybersecurity and customer convenience on the other. Other examples include miiCard, a startup based in Edinburgh, Scotland, that creates "digital passports" for consumers to prove their identities, and a Canadian initiative in which people log in to government websites through their banks.

Go here to read the full article

Wall Street Journal: GoodWorld Raises $1.7 Million to Make Donations via Social Media Easy

Lora Kolodny reports in the Wall Street Journal:

Last summer, a video meme called the ALS Ice Bucket Challenge was sweeping Facebook.  Even Bill Gates dumped ice over his own head to inspire others to donate to the ALS Association, a nonprofit that raises money to help find a cure for ALS and to care for those who suffer from the disease.

Also known as Lou Gehrig’s disease, ALS stands for amyotrophic lateral sclerosis, a progressive neurodegenerative disease that affects nerve cells in the brain and the spinal cord.

According to the Chairman of the National Board of Trustees at the ALSA, Bill Thoet, the organization raised $115 million in donations from 2.5 million new donors in the U.S. online as a result of the Ice Bucket Challenge.

Go here to read the full article.


Coin Desk: Raj Date-Led VC Firm Backs Align Commerce Seed Round

Pete Rizzo reports in CoinDesk:

A diverse cast of investors has contributed to the most recent undisclosed seed funding round for blockchain-based, cross-border payments solution provider Align Commerce.

Participants included more familiar names such as entrepreneur Barry Silbert's Bitcoin Opportunity Corp, Adam Draper-led Boost VC and hedge fund Pantera Capital. The round also included traditionally payments-focused VC firms such as Bayhill Capital Management, NyCa Investment, Pivot Holding, Fenway Summer, R3 and the Whittemore Collection.

Unsurprisingly, not all participants are new to the ecosystem. Fenway Summer, for example, previously invested in bitcoin brokerage Circle's $17m Series B and boasts former deputy director of the US Consumer Financial Protection Bureau (CFPB) Raj Date as its managing partner.

Go here to read the full article