Going Deep, Hitting the Gaps at VentureTech

Twenty-five young fintechs. 74 credit unions. This November’s edition of VentureTech assembled a potent mix of players designed to drive engagement across the ecosystem- fostering both the investment in and adoption of new solutions.

The annual event has firmly planted its flag at a venue overlooking the Dallas Cowboys’ practice facility, and this years’ roster proved to be remarkably deep (I’ll leave further football analogies to others). Perhaps most impressively for the end of a stacked conference season, founders/event organizers Curql Fund and CUNA Strategic Services managed to assemble a cohort of worthy startups, two-thirds of which I had yet to observe on stage. To their further credit, very few of these companies are (yet) in the Curql or CSS portfolios- evidence of the wide net both organizations cast in sourcing compelling solutions.

The opening day Launch Party featured pitches from ten early stage fintechs. The consensus winner with nearly a third of audience votes cast was Ribbon, a self-described “inheritance platform for credit unions,” designed to address the challenges facing heirs upon a member’s passing- and helping CUs retain relationships and deposits in the process.

Founder Saeid Kian, a Meta/Stripe alum, estimates that a $1 billion CU encounters 1,300 member deaths annually. Each of these gives rise to a significant administrative burden but more importantly a “moment of truth” during which the heir is consciously or subconsciously evaluating the credit union against other financial services alternatives. The voters’ embrace illustrates the extent to which the Great Wealth Transfer is a top-of-mind issue for CU leaders. (Listen to our interview with Ribbon co-founder Saeid Kian here.)

Likewise, voting in the main competition served as a window into the mindset of leaders’ strategic priorities- with deposit retention, security and practical applications of artificial intelligence faring particularly well. The startups were divided into three brackets of five, with the top vote-getter from each facing off for the grand prize.

The first to advance from a highly competitive field was Modern FI, a deposit network with 40 CUs already live and former NCUA Chair Rodney Hood on its Board of Directors. Integrated with Tru Treasury, Modern FI enables a credit union version of reciprocal deposits to protect balances exceeding insurance caps- a model that 70% of banks employ. This added comfort level, particularly in the wake of last year’s Silicon Valley Bank debacle, can help attract and retain high-balance relationships such as small businesses, nonprofits and state/municipal agency funds.

The second bracket featured the highest vote getter in the preliminary round. Allure Security spoke to the essential need for CUs to defend against impersonation scams- according to co-founder Josh Shaul his firm has identified 7,000 fake credit union sites this year alone. It should be noted that the field included two impressive entries- Aviary AI and Saris AI, focused on member-facing and back-office processes, respectively- that arguably split the AI vote that nearly matched Allure’s tally.

The third bracket winner scratched a different itch. Founder Joe Gracia of Nickels, a VentureTech veteran, introduced a new product. CardLift, a credit union-centric card comparison website, is designed to highlight superior offers for the two-thirds of card holders that carry balances. As Gracia points out, CU cards rarely if ever make the first screen of options at sites like NerdWallet despite consistently lower APRs.

These marketers’ algorithms seem to favor the “sugar rush” of upfront reward bonuses, which Gracia demonstrated are a sucker bet for revolving cardholders from a cost/benefit standpoint. If successful, CardLift promises a triple threat of financial wellness, member education and new loan balances. It narrowly edged out Coverbase, a solution that claims to automate 90% of vendor management while improving security and compliance.

The finalists represented three distinctly different value propositions- deposit retention, website security and enlightened card usage (somewhat surprisingly, no AI solutions managed to advance). In a tight three-way vote Nickels/CardLift prevailed to take home the grand prize. I was aligned with the audience consensus here- both in the finals and for the field overall. I’m also confident the 100+ credit union leaders took home an ever longer list of fintech contacts for follow-up.

You can still find the full list of competing companies- with links to their websites- at https://myventuretech.com/agenda/