RegTech, AI Fuel Strong B2B FinTech Numbers

Good news emerged from the U.S. venture capital sphere this week: VC funding for FinTech startups in Q1 alone hit $1.2 billion, found a new report from KPMG. Analysts said the industry has seen its highest venture capital activity since Q1 of 2016, fueled by focus on late-stage investment rounds.

“The U.S. leads the rest of the world in the total value of FinTech investment due to the large amount of funds available to invest in the market, with investors focusing on late-stage, clear front-runner FinTech companies,” said KMPG U.S. Financial Services FinTech Practice Co-Leader Anthony Rjeily in a statement.

According to KPMG’s U.S. Venture Capital Practice National Co-Lead Partner, and Co-Leader of its Enterprise Innovative Startups Network, Brian Hughes, investors across the world also had a clear vision for where they wanted to see their money go.

“Payments and lending continue to attract the most funding globally, although we’re seeing increasing interest in a variety of technologies,” he stated. “In addition to continued growth in RegTech and InsurTech, areas such as artificial intelligence, machine learning and Internet of Things are gaining increasing investor attention.”

This week’s B2B venture capital roundup is quite indicative of these trends. Not only is the strength of the U.S.’s FinTech VC market well reflected — three of the four B2B FinTech companies that landed funding hold strong presences in the U.S. — but RegTech and artificial intelligence also landed on the board. In total, $97.7 million was raised, and we break it all down below.

RegTech

Token

With a focus on enabling banks to generate revenue from Europe’s PSD2 initiative, Token announces this week that it raised $15.7 million in Series A funding. The San Francisco-based company said Octopus Ventures, EQT Ventures and OP Financial Group participated in the funding, which brings the total amount raised by Token to $18.5 million, according to reports. PSD2 will require banks to enables third parties to access their payment initiation to retrieve data — Token is looking to enable banks to do this quickly, remain compliant and generate revenue from the process. The startup also provides bank services to generate revenue from other processes, including B2B payments and eCommerce checkout.

SaaS

iSos

With roots in India and California, iSos offers workplace solutions for the smart office, including cashless employee transactions and inventory management. Reports this week said the company raised $5 million from U.S.-based entrepreneur Nitin Khanna to support iSos’s Software-as-a-Service offering.

Artificial Intelligence

vHive

Here’s a startup you don’t see everyday: Israel’s vHive provides companies with software that enables the enterprise to manage its own fleet of drones. With $2 million in new funding announced this week — led by StageOne and other private investors — vHive will continue to develop its artificial intelligence technology, dubbed Mission AI, that enables drone control. The company said it will also look to expand into new markets.

UiPath

Based in New York, this startup secured an impressive $30 million in funding that will go toward global expansion of business automation solutions. The company uses artificial intelligence to automate repetitive business processes that involve enterprise software, like invoice management and data entry, helping companies save money by offloading these tasks from human contractors. Accel led the funding round, said reports, while Earlybird Venture Capital, Credo Ventures and Seedcamp also participated.