Productfy has raised $16 million to create the “Shopify of Embedded Finance”
CM Ventures led a $16 million Series A round of investment for Productfy Inc., a banking-as-a-service (BaaS) platform that aspires to develop “DeFi for conventional finance.”
Existing backers Point72 Ventures, 500 Startups, and Envestnet | Yodlee all contributed to the round, bringing the total funded to almost $19 million since its founding in 2018.
There are an increasing number of BaaS firms, all of which aim to make it easier and faster for fintechs and other businesses to offer financial services and products.
According to creator and CEO Duy Vo, Productfy wants to distinguish out with its objective to develop DeFi for traditional banking. Productfy has been developed “from the bottom up” to work with various financial partners, according to its product architecture.
“Our rivals aren’t designed for this,” Vo explained. “If traditional banks can’t decentralise, they won’t last.”
Productfy aspires to be the “Shopify of embedded finance,” to put it another way. Developers can “setup in hours, integrate in days, and go from idea to full stack deployment in as little as three weeks” with the firm’s platform, according to the company.
But, unlike many other BaaS firms, Productfy isn’t just focused on developers. Its team is working to create additional white label user experiences beyond the API layer. While the firm obviously wants to be robust for developers, Vo adds the company is even more focused on brands with little technical resources or domain expertise. The company has grown its sales by 119 percent month over month since July. HatchCar is one of the company’s eight clients.
Equifax, card issuing platform Marqeta, card fulfilment partner Arroweye, and financial data supplier Envestnet | Yodlee are just a few of Productify’s partners. The company has also partnered with Stearns Bank National Association to create “increased access” to money movement, digital banking, and card issuance goods “through readily embeddable APIs, widgets, and pre-approved client interfaces.”
“The Productfy platform is unlike any other we’ve encountered,” said Josh Hofer, Stearns Bank’s chief risk and information security officer. “By aligning our technological roadmap with the Productfy platform, we can help both firms flourish by making financial solutions more accessible and scalable across the ecosystem.”
The firm claims that its collaboration with Stearns Bank allows fintech and non-fintech companies to establish money movement and card programmes with layered processes and uniform due diligence, “eliminating months of development, compliance obstacles, and third-party integrations.”
Vo told TechCrunch, “We’ve been developing our fundamental infrastructure, compliance, and technology.” “We learnt a lot when we first started these initiatives.” Now, we’re using everything we’ve learned to create the next version of our product, which will effectively be a white label ‘fintech in a box’ solution that will allow any company to establish a financial product or a retail banking experience in days.”
According to Vo, he was inspired to establish Productfy because he believes the financial services business has “mostly failed our society’s most vulnerable citizens.”
“We’re continually asking ourselves how we can create a kinder, more compassionate, and more socially just financial environment,” Vo added. “We believe that creating a decentralised financial infrastructure is the best approach to tackle this challenge.”
He underlines that, while DeFi has been linked to cryptocurrencies in the past, his company has “nothing to do with cryptocurrency.”
Vo told TechCrunch, “What we’re doing is building a DeFi for traditional banking.”
“Because banks are the origin servers, and if AWS can dynamically route traffic depending on demand, it pulls power away from customers and distributes it to tiny banks and companies that interact with end users,” says one analyst.
Looking ahead, the firm plans to utilise its additional funding to expand its services and compliance-as-a-service capabilities, as well as improve its core data and card issuance offering, with a focus on releasing its first batch of clients and developing new integrations and collaborations.
Productfy aims to offer a new Card-Issuance-as-a-Service solution called “Latinum” in the fourth quarter, aimed at helping businesses improve their customer experience and increase loyalty. The concept behind the branded debit card is to allow members of a church congregation, for example, to use a card where interchange fees are utilised to lend money to other members of the congregation.
Productfy is aiming to offer new solution to the card issuance service solution that will improve customer experience as a whole and will retain them. All my best wishes to them.Shishir Gupta, Founder and CEO, StartupLanes
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