- Alloy, a startup helping banks and fintechs verify customer identities, completed a Series B worth $ 40 million.
- Canapi Ventures led the way. The new investors Avid Ventures and Felicis Ventures took part, as did former supporters Bessemer Ventures, Primary Venture Partners and Eniac Ventures.
- Laura Spiekerman, Co-Founder and Chief Revenue Officer of Alloy, and Victoria Treyger, General Partner and General Manager at Felicis Ventures, spoke to Business Insider about the rounds.
- Check out the 12-sided Deck Alloy that was used to deposit the $ 40 million Series B.
- You can find more stories on the Business Insider homepage.
A startup helping financial firms verify customer identities just raised $ 40 million from investors, underscoring the growing interest in disrupting the technology used behind the scenes by banks and fintechs.
Alloy, a New York-based fintech company, completed a Series B valued at $ 40 million under the direction of Canapi Ventures. The new investors Avid Ventures and Felicis Ventures participated, as did former supporters Bessemer Ventures, Primary Venture Partners and Eniac Ventures.
In July, three venture investors surveyed by Business Insider singled out Alloy, which had previously raised $ 19 million, as an emerging fintech industry.
Victoria Treyger, general partner and managing director at Felicis Ventures, told Business Insider that the interest in companies that streamline manual processes for banks is higher than ever before.
"Right now, fintech infrastructure is the hottest ever, and it makes sense that it is," said Treyger, whose previous investments include insurtech unicorn Hippo and soon-to-be-acquired Galileo. "If you look at companies like Fiserv and FIS, which are kind of a core fintech infrastructure company that people think of, it's $ 90 billion and $ 60 billion worth of companies, and they are from the 1960s. It hasn't been much innovation in many decades. "
Alloy's focus – helping financial firms on board and verifying customer identity – has come into the spotlight lately as more companies take advantage of digital banking. Without face-to-face interactions with new customers, financial firms have a more difficult time verifying identities and avoiding fraud.
"If you are a bank trying to move your business online, opening deposit accounts online or mobile, or a fintech company that is obviously challenging those banks in some ways, it's really difficult to find people because of the databases we use and methods to check. " were not built for today's world, "Alloy co-founder and chief revenue officer Laura Spiekerman told Business Insider.
Continue reading: Point72 and Goldman Sachs investors believe industry giants like FIS and Fiserv will be the next to be disrupted by fintech. This is where they are most vulnerable.
But despite Alloy's strong position in the market – Spiekerman said the startup doubled sales and customers in 2019 – it took the fintech time to reassess things when the pandemic first hit. However, after some scenario planning in March, the startup was confident that it had enough runways to weather a potential storm.
In fact, April and May were strong months for fintech. And by early summer, Spiekerman said, the decision was made to raise another round.
"We thought let's just take this moment and see what we can do," she added.
With restrictions on travel, Spiekerman said the goal was to keep the timeline short. A short list of roughly six companies that the fintech was familiar with was made. The whole process, Spiekerman said, took about two weeks.
Looking ahead, Spiekerman said Alloy's focus will be on going deeper, not further. Essentially, the goal is to help financial firms with questions about a customer's identity.
"Whether you are signing up for online and mobile banking for the first time or doing some kind of funky, high-risk transaction, we want to be behind the scenes and enable you to make better decisions in real time." there, "said Spiekerman." So it's really about driving the entire life cycle of the customer decision.