Productfy Inc. , a banking platform as a service (BaaS, Bank as a Service) that aims to build «DeFi (Decentralized Finance) for traditional finance«, has raised 16 million dollars in a round of financing Serie A directed by CM Ventures.
Existing investors how Point72 Ventures, 500 Startups y Envestnet | yodlee also participated in this Series, bringing the total raised since the company's inception in 2018 to nearly $19 million.
There is a growing number of companies with BaaS product offerings, all with the same end goal: to make it faster and easier for fintechs and other companies to launch financial products and services.
Productfy, based in San Jose, aims to stand out with its mission to develop DeFi for traditional finance, according to founder and CEO Duy Vo. From the point of view of product architecture, Productfy it has been built “from the ground up,” he said, to operate with multiple banking partners.
“This is not something our competitors are made for,” Vo said. "Traditional banks won't last if they can't decentralize."
In a nutshell, Productfy wants to be the “Shopify of integrated finance”. The company claims that with its platform, developers can "set up in hours, integrate in days, and go from idea to full implementation in as little as three weeks."
However Productfy, unlike many other BaaS companies, does not only focus on developers. His team is building, beyond the API layer, white-label user interfaces.
While the company is pursuing strength and stability for developers, Vo says it's even more focused on brands that lack technical resources or domain expertise. Since July, the startup has seen 119% monthly revenue growth. He currently has eight clients, including hatch card.
CM Ventures valued BaaS startups and integrated finance companies and had conversations with around “30 different companies” before deciding to go for it. Productfy, according to Vagan Khranyan, managing partner of CM Ventures.
"We came to the conclusion that Productfy it has the only market-ready solution that is sold to customers,” said Khranyan. "We see massive parallels in what Productfy is building and larger movements in distributed and decentralized finance across the industry.”
The company, he said, is working to streamline an otherwise complicated process with multiple banking partners, data providers and cards.
For example, the partners of Productfy include Equifax, the card issuance platform Marketa, the card fulfillment partner arroweye and financial data provider Envestnet | yodlee.
The startup has also partnered with Stearns Bank National Association while working on developing "expanded access" to money movement, digital banking, and card issuance products "via pre-approved APIs, widgets, and client interfaces."
"The platform Productfy It's like nothing we've seen on the market," said Josh Hofer, director of information security and risk at Stearn's Bank. “Align our technology roadmap with the platform Productfy enables both companies to succeed by making banking products more accessible and scalable for the entire ecosystem.”
Specifically, the startup says its partnership with Stearn's Bank It gives fintech entrepreneurs and non-fintech companies a way to launch money movement and card programs with stacked workflows and unified compliance, “eliminating months of development, compliance hurdles, and third-party integrations.”
"We've been building our core infrastructure, compliance, and technology," says Vo. “When we launched these programs, we learned a lot. Now, we're taking those learnings to build the next iteration of our product, which will essentially be a white-label solution.'fintech in a box', which will enable any organization to launch a financial product or retail banking experience within days."
Vo says that his motivation to start Productfy it is based on the fact that the financial services industry "has largely failed the most vulnerable people in our society".
"We always ask ourselves how we can create a financial ecosystem that is kinder, more compassionate and more socially fair," says Vo. "The way we think we can solve this problem is by creating a decentralized financial infrastructure."
He emphasizes that while DeFi has traditionally been associated with cryptocurrency, its startup has "nothing to do with cryptocurrency."
“What we are doing is creating a DeFi for traditional banking. Because the banks are the origin servers, and if AWS can dynamically direct traffic based on the customer use, that takes the hassle out of users and spreads it out to smaller banks and organizations that work with these end customers.
Vo's goal is that if this can be done in the United States initially, Productfy it could add nodes in countries like Uganda and Libya and create the "first true distributed financial infrastructure" that would enable near-instantaneous fund transfers, for example, "easily, securely and for less than a penny around the world."
Looking ahead, the startup will use its new round of capital to further scale its fulfillment-as-a-service offerings and capabilities and continue to enhance its core data and card issuance offering, with a focus on building new integrations and partnerships and the launch of its first cohort of clients.
In the fourth trimester, Productfy plans to launch a new card issuance solution as a service, called "Latinum", which aims to help brands improve their customer experience and generate greater loyalty.
The idea behind the branded debit card is to give, for example, members of a Church congregation the ability to use a card where interchange fees would be used to lend money to other members of that congregation. congregation.
Currently, the goal of Productfy is to allow client companies to have their solutions in just three weeks. Today, they still have to have a team of engineers to be able to go to market with their own solutions. But by QXNUMX, Vo says, they won't need engineering or compliance teams because their white-label solution will be available. And the process will be a matter of days, he says.
“We are moving the ability to offer retail banking services to the edge”, so that religious organizations, schools, gaming companies, e-commerce brands or any organization with “a large number of followers or customers” can launch a card program of debit with deposits, movement of money, KYC (Know Your Customer, Know Your Customer), legal and compliance and own services of said integrated third parties.
Other BaaS companies that have raised capital this year include Unit, which in June raised 51 million in a round of Serie B to further its goal of making it possible for businesses and fintechs to build banking products "in minutes."
In July, Solaris bank, a Berlin startup that offers a range of financial services through some 180 APIs that others use to build end-user-facing products, raised $224 million at a valuation of $1,65 billion.
