Fintonic banks $28M to grow its personal finance management app
Spanish startup Fintonic has closed a €25 million (~$28M) Series B funding round to expand into new markets in Latin America and continue developing the product. Investors in the round include banking and financial services giant the ING Group and insurance group PSN.
The personal finance management app is aimed at consumers wanting help managing their money — such as getting overviews and alerts about their expenses. Currently Fintonic is available in two markets: Spain and Chile; and has more than 400,000 users at this point.
The app also generates a proprietary credit score, based on its visibility of users’ linked bank and credit card accounts, and uses its analysis of transaction and spending data to suggest relevant financial products to users (currently loans and insurance products).
The startup effectively acts as a broker for third party financial services products, with its business model based on taking a commission from any signs up for these financial products — though it says all sales commission terms for third party products are the same, so it is not incentivized to suggest certain ones over others.
At this point the in-app marketplace includes loan and insurance products from more than 50 companies.
With its new funding in the bank, Fintonic says it has an update coming shortly, in a matter of “weeks”, for the insurance marketplace.
It also says it’s looking at other functionalities it could add — to keep broadening the value proposition for users.
Fintonic users need to link their bank and credit card accounts to the app, via their bank access credentials. In return they get help managing their finances, such as via spending analysis and alerts aimed at helping them save and stay on budget.
The app can generate alerts for things like the renewal date of an insurance or deposit; bank fees and overdrafts; or when their spending is exceeding a personal budget allocation.
Users can be anonymous; only an email and password is required to register. And Fintonic says it does not store ID, name or surname during registration.
The app supports linking with 100 banks across the markets it operates in at the moment. Though users can synchronize as many accounts as they choose, provided integration is supported.
Fintonic’s proprietary credit score — which it calls a FinScore — is used to help match users with relevant loan or insurance products. It’s also another signal for the company to analyze how well a user is managing their personal finances and what they might need to do to improve.
It says the score is calculated via a proprietary machine learning technology — based on criteria such as “the debt to income, cash flow trends, financial behavior with direct debits”.
Earlier investors in Fintonic include Ideon Financial Solutions, the investment funds Inception Capital and Onza Capital and Atresmedia. The Madrid-based startup was founded in 2012.
A similar US startup, called Dave, launched its own personal finance management app back in April — also applying AI to help alert people to bad spending patterns. Albeit Dave’s twist is to offer small payday loans with 0% interest to help its users cover any short term shortfalls in their monthly finances. Though it does also charge users a $1 per month fee to use the app. (Whereas Fintonic is free to use.)