17 December 2023 |

Worst Acronym Ever

By Alex Johnson

Mother, a fragment from the tampere cathedral altar fresco (1907) by Magnus Enckell.

3 FINTECH NEWS STORIES

#1: Making Lawyers’ Lives Easier 

What happened?

A fintech company focused on selling to law firms raised a seed round:

Noetica AI, an AI software platform that benchmarks corporate debt transactions, announced it has raised a $6M seed round investment led by global venture capital firm Lightspeed Venture Partners, bringing its total funding to $7.8M following a pre-seed round led by Bling Capital in 2022.

Noetica AI was founded in 2022 by Dan Wertman, Tom Effland, and Yoni Sebag, and, in just over one year from its founding, has made tangible noise in the credit space for its cutting-edge AI solutions tailored specifically for legal and financial deal professionals. Leveraging the power of artificial intelligence, Noetica empowers professionals to more deeply and efficiently analyze highly complex transactional documentation to inform term negotiation and decision-making in debt issuances and investments.

So what?

The basic problem with corporate debt transactions is that they’re all bespoke. The size of the deals and the companies involved basically guarantees this. And because they’re all bespoke, companies hire big law firms to negotiate them and to ensure that they’re getting the best possible deal.

But how do you know if you’re getting the best deal? How do you know if the terms that the other side is proposing are standard or if they’re trying to pull one over on you?

Well, that’s why you hire the big law firm!

The idea behind Noetica is to leverage AI to make it easier for big law firms to keep track of what is standard in corporate debt transactions rather than relying on lawyers’ memories and badly kept Excel spreadsheets.

One interesting note – Noetica says that it’s not leveraging third-party LLMs from providers like OpenAI because of “the security and cost concerns” and the need for “a more robust, multi-layered and tailored approach.”

This is a bit odd. Security and cost concerns are valid, but it seems like you should be able to engineer your way around those. And wouldn’t it be easier to layer tailoring and additional training onto an already robust foundational model rather than building the whole thing yourself?      

#2: Worst Acronym Ever

What happened?

Binkey, a fintech infrastructure company, raised a $3.3 million seed round:

Binkey analyzes item-level purchasing data, authenticating FSA/HSA-eligible purchases, processing payments, and streamlining reimbursement.

For merchant partners, the platform allows them to offer a way for their customers to maximize their health benefits while shopping for health-related products at their store.

The company also has Binkey Rewind, which lets financial institutions and technology platforms offer their customers an automated way to analyze their historical purchases for FSA-eligible products and automates the claim filing process, depositing the reimbursement funds directly back to the customer’s bank account.  

So what?

Love the product. Hate the name.

Let’s do the name first.

Apparently, the name is an acronym for “benefits and incentives key.” But I’m sorry, no. Having the “e” in there is helpful for SEO purposes, but when I read it, I immediately see “binky”, which is just not the vibe you’re looking for if you’re trying to sell a product that enables more FSA/HSA spending.

I’m a father of three young children, so I’m sure my brain is especially susceptible to this association, but y’all are with me here, right?!?

Anyway, the product itself seems neat. As I wrote about in reference to TrueMed, this is a problem worth solving. I especially like the Rewind functionality that streamlines the process of identifying qualifying expenses in existing transactions and filing a claim against them. I could see that becoming a table-stakes feature for all banks in the future.    

#3: SupportPay’s Second Act

What happened?

SupportPay raised a seed round:

SupportPay … today announced an oversubscribed seed round of $3.1M. Led by HearstLabs, the round also included funding from Michigan Capital Network, Victorium Capital, Rendar Capital, Connetic Ventures and Stage Next Ventures. Purpose-built with employers and employees in mind, SupportPay started as the first consumer product to help manage the time-consuming, conflict-ridden and stressful process of managing child support and sharing expenses and custody between single, divorced, step, pet and co-parents.

Earlier this year, SupportPay expanded its offering by offering a unique, affordable and secure solution that delivers a personalized employee benefit for this target market. The result has delivered demonstrated and dramatic time savings for employees while directly improving their mental and financial well-being, ultimately returning a measurable ROI for SupportPay enterprise customers. 

So what?

As I’ve written about before, I’m a big fan of fintech that attacks money-adjacent problems. In B2C, many of those money-adjacent problems revolve around relationships. The relationship between divorced parents is an especially fraught one, deserving of thoughtfully designed software.

So, broadly speaking, I’m bullish on the problem that SupportPay is going after.

I’m also impressed that SupportPay has been as successful as it has apparently been selling itself through employers (the press release mentions that Hearst and several Fortune 500 companies are already on board). Employer-distributed fintech has always made sense … in theory. In practice, there are very few examples of fintech companies making significant headway in this area (outside of earned wage access). Perhaps SupportPay will succeed where others have failed.

And speaking of failure, here’s something I didn’t know until I dug in to SupportPay – this is actually the second iteration of the company. Originally founded by Sheri Atwood in 2011, the first iteration of SupportPay raised a $4.1 million Series A in 2016 from Fenway Summer Ventures. A disagreement between Atwood and her investors over the company’s growth strategy led to Atwood being fired in 2017 and the company being liquidated in 2018. At that point, Atwood used her savings and took out a personal loan to purchase SupportPay’s assets and relaunch the company. She has been building the company back up since then, which means this isn’t your typical seed-stage startup.

I hope the second time is the charm.     


2 FINTECH CONTENT RECOMMENDATIONS

#1: How Unit Operates With Precision (by Turner Novak, The Peel) 🎧

I’m not a regular listener of The Peel, but this one caught my eye (and kept my ear). Itai is a thoughtful guy, and I enjoyed hearing him expound on how he thinks about product development and company culture.

#2: My First 16 (by Seema Amble, a16z) 🎧 

We’re doubling down on podcast recommendations this week!

This series from Seema is fantastic. The focus is on understanding the lessons that super successful fintech founders (Zach Perret, Dimitri Dadiomov, Jason Gardner, etc.) learned from acquiring their initial customers.

Apart from the title of this podcast giving me a Pavlovian shiver down my spine (thanks to a similarly named MTV reality show that I can’t dislodge from my brain), I have been thoroughly enjoying it!


1 QUESTION TO PONDER

What’s the one fintech story from 2023 that you’ll never forget?

I’m compiling a list and would love to get your thoughts!