Imagine if you could build a digital loan platform in a couple of hours, without writing a single line of code? Or create an entire digital banking engine in a couple of months without any programming skills? That's the brave new world held forth by Unqork, a Manhattan-based fintech that's just raised $22m in a Series A fundraising round led by Goldman Sachs.
Founded in 2017 by Gary Hoberman, a former global chief information officer at MetLife who was once Citigroup's youngest-ever managing director, Unqork describes itself as a "no code software-as-a-service" platform. The secret sauce is Unqork’s Designer — the platform’s drag & drop central nervous system — which allows users to quickly create applications for things like opening bank accounts, applying for loans and taking out insurance policies.
The beauty of the system is its speed and simplicity. Mr Hoberman says one of his best "deployment team leads" has a background in fashion and industry. "I will bring her with me to a bank where she can, without any help from an engineer, create any of the most complex systems you could dream of," he says.
For its first few years, Unqork's pitch was that they would build the initial system for a bank or insurance company, and then hand it over and teach the client how to add new functionality. Then, along came Goldman.
"They were the first to say, 'we want to use it without you'," says Mr Hoberman, recalling how Goldman said they wanted Unqork's technology "to empower our business and build the applications they've been waiting while engineers focus their time and attention on critical items of competitive advantage".
In a press release announcing the Goldman investment, Rana Yared, a managing director at the bank's principal strategic investments division, said that "the evolving nature of the financial services and insurance industries requires a fundamental change to how we structure and operate workflows."
"Unqork is at the forefront of disrupting exactly that," she added. Goldman uses Unqork for some parts of its Marcus consumer bank, though it won't say exactly which parts, or what else it does with the platform.
Another major bank has also gone down the Goldman route, using Unqork's technology as an enterprise platform and building on it from scratch. Mr Hoberman dances around the longer term jobs implications of a technology that can do in hours what used to take teams of engineers months.
It's an issue likely to come up at more financial services institutions if Unqork's momentum holds up. Revenue grew by more than 50 per cent sequentially every quarter in 2018, as it sold its wares to 17 clients, across the US, Canada, Asia and Latin America.
"Europe is our expansion market, which we are directly targeting," says Mr Hoberman, adding that Japan is also a very important market since it has a spectacularly high "paper per person" ratio in financial services, which means big gains can be made from digitising processes.
That will mean adding another 100 or so staff in the coming months to the 65-strong full-time team that Unqork has at the moment. There are also medium term plans to set up a European office, and Unqork is on the hunt for an urgently-needed new home in Manhattan. "There's no more space to put a single desk in our office," said Mr Hoberman, "and the line for the bathroom went round the corner this morning."
One to watch: Embroker
Insurtech is one of fintech's fastest-growing segments, and startups are making their mark on underwriting, claims processing, and distribution, particularly in personal insurance. Few startups sell business insurance directly, though -- with the exception of a handful of startups that are making headway with small business lines, as #fintechFT has reported before.
One of these up-and-comers is Embroker, a San Francisco-based digital brokerage which sold $1bn in liability cover to tech companies last year -- and announced a $28m series B financing this week. The company offers customised advice and business insurance policies through 50 commercial carriers, with instant underwriting and real-time claims monitoring. It specializes in employment practices and directors & officers policies for startups -- areas where, according to brokers, premiums have risen sharply recently as employees and shareholders have become increasingly litigious.
The company, founded in 2015, estimates that it works with 5 per cent of VC-backed tech companies in the US, and hopes to double that figure by the end of the year. CEO Matt Miller says Embroker is "better, faster, and cheaper" than the competition.
Another insurtech targeting small businesses, Next Insurance, had an $83m B-round last year -- but it is a licensed insurer writing its own policies, rather than acting purely as a broker.
Number of the week: $1.8tn
The size of the point-of-sale lending market in the US, according to Accenture. Mastercard bought POS tech platform Vyze this week, for an undisclosed sum, to grab its slice.
Further fintech fascination
Follow the money: Want to invest in a peer-to-peer lender struggling with a regulatory clampdown and that is cutting 2,000 jobs? Then form an orderly queue for Dianrong, one of China's biggest peer-to-peer players which is attempting to raise a punchy $100m. Founder Kevin Guo put $10m of his own money into the venture in December in a bid to get existing investors, including Singapore's GIC and Japanese financial services group Orix, comfortable with committing more funds. He's also hoping to lure new backers.
Crypto chronicles: Big tech and financial firms including Microsoft, Santander and the London Stock Exchange have helped drive $850m of venture capital funds into crypto and blockchain ventures so far this year, data compiled for Reuters shows. Their willingness to invest in some of the projects is at odds with the corporate world's general scepticism about crypto currency and fading hopes for blockchain. Meanwhile, Japan's financial regulator is forcing cryptocurrency exchanges to enhance their internal oversight of "cold storage" wallets used to store coins offline, Reuters separately reported.
Stumbling blocks: Italian payments group Nexi had a rough start to its stint on the public markets, with shares in Italy's biggest fintech IPO falling as much as 8 per cent during the company's April 16 debut on Borsa Italiana listing. Investors who ploughed €2bn into Nexi, conferring a €5.7bn valuation on the firm, might well have been hoping for better. After all, Dubai-based payments company Network International bounced 19 per cent when it listed on the London Stock Exchange on April 10. Is the gloss coming off the payments boom?
AOB: A new e-trading firm claims to have a one-of-a-kind system that uses artificial intelligence to measure trade outcomes in real time and improve pricing outcomes, Reuters reports ** The world's biggest cyptocurrency exchange Binance is moving its $3bn currency from the ethereum rails onto its very own blockchain.