Fintonic raises $28 million to grow its personal finance management app
Spanish startup Fintonic has raised €25 million (about $28 million) in a Series B round to expand into new markets in Latin America and continue developing its product. Investors in the round include banking and financial services giant ING Group and insurance group PSN. The personal finance management app is aimed at consumers looking for help managing their money – such as viewing summaries and alerts about their spending. Fintonic is currently available in two markets, Spain and Chile, and has more than 400,000 users. The app also creates a personalized credit score, based on its affinity with users’ bank and credit card accounts, and uses transaction and spending data analysis to recommend relevant financial products to users (currently loans and insurance products). The startup effectively acts as a broker for third-party financial services products, with a business model based on taking a commission from each sign-up for those financial products – although it says all sales commission terms are the same for third-party products, so there’s no incentive to recommend some over others. At this point, the app’s internal marketplace includes loans and insurance products from more than 50 companies. With its new investment, Fintonic says it will soon (within a few weeks) release an update to its insurance marketplace. It also says it’s exploring other features it can add – to broaden the value it offers to users. Fintonic users will need to link their bank and credit card accounts to the app via their banking credentials. In return, they receive help managing their finances, such as through spending analysis and alerts that help them save and stay within their budget.
The app can set up alerts for things like when an insurance policy or deposit is due; bank charges and overdrafts; or when their spending exceeds a personal budget allocation. Users can remain anonymous. All that is required to sign up is an email and password. And Fintonic says it does not store identifying information, such as first or last name, during sign-up. The app supports connections to 100 banks across the markets it currently operates in. However, users can sync as many accounts as they choose, as long as the integration is supported. Fintonic’s proprietary credit score – which it calls FinScore – is used to help match users with relevant loan or insurance products. It’s also another indicator for the company to analyze how well a user is managing their personal finances and what they might be able to do to improve. It says the score is calculated using proprietary machine learning technology – based on metrics such as “debt-to-income ratio, cash flow trends, direct debit financial behavior.” Previous investors in Fintonic include Ideon Financial Solutions, venture capital funds Inception Capital and Onza Capital, and Atresmedia. The Madrid-based startup was founded in 2012. A similar US startup called Dave launched its personal finance management app in April – also using artificial intelligence to help alert people to bad spending patterns. Although Dave’s gimmick is to offer small payday loans with 0% interest to help its users cover any short-term shortfalls in their monthly finances, it also charges users a $1 per month fee to use the app. (While Fintonic is free.)
