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TPG Growth and Alphabet's CapitalG just backed a $1.9 billion startup that's helping banks and fintechs build interfaces that are as lovable as big consumer brands

Published by Business Insider on Wed, 13 Jan 2021

<p><img src="https://static1.businessinsider.com/image/5ffdfdd3f3df630018cc16ec-2400/Ryan Caldwell.jpg" border="0" alt="Ryan Caldwell" data-mce-source="MX" data-mce-caption="MX CEO Ryan Caldwell"></p><p></p><bi-shortcode id="summary-shortcode" data-type="summary-shortcode" class="mceNonEditable" contenteditable="false">Summary List Placement</bi-shortcode><p>For the modern digital consumer, it's now expected that the algorithms driving the user experience of some of the world's largest companies, from Spotify to Netflix, can deliver highly-tailored, personalized recommendations. But it's tough to imagine the same in the world of consumer banking, even as the COVID-19 pandemic has spurred the adoption of digital finance.</p><p>Financial data startup MX, which powers application programming interfaces (APIs) connecting financial institutions across the country, hopes to upend the traditional, often outdated experience consumers face when they interact with banks and fintechs.</p><p><strong>See more: </strong><em><a href="https://www.businessinsider.com/mx-agreement-hints-at-power-of-data-platforms-2021-1">MX deal spotlights data sharing's starring role in embedded finance</a></em></p><p>On Wednesday, the Utah-based MX got one step closer to that goal when it announced a $300 million Series C fundraising round led by TPG Growth Fund and joined by CapitalG, Google parent company Alphabet's growth venture fund.</p><p>MX is now valued at $1.9 billion, the first time the company has released a public valuation. The startup last raised money in 2019, a $100 million Series B round.</p><p>"For us, everything comes down to, 'How do we do a better job at delivering this phenomenal data-driven money experience'' This fundraising is all about how we accelerate the delivery of that vision," Ryan Caldwell, founder and CEO of MX, told Insider.</p><h2>'Investors approached us'&nbsp;</h2><p>MX helps banks and fintechs better understand and customize offerings for consumers through data. From customer analytics and targeted marketing to personal financial management and mobile banking, MX's data-driven tools run a wide gamut. Ally, BBVA, and Robinhood are among the 2,000 organizations that MX works with.</p><p>Caldwell said that MX actually did little courting of investors this time around, instead letting ideal backers come to the table and share their thoughts on the future of the industry.</p><p>"Investors approached us with a shared thesis of where they felt like the space was going," he said.</p><p>Additionally, Caldwell said, each of the investors had specific experiences that he thought could be leveraged at MX.</p><p>"TPG Growth are all about scaling an organization. How do we scale and continue to improve what MX is delivering to market' They already saw us as they were very clearly the leader in the space," Caldwell said.</p><p>"Folks like CapitalG and others have a really firm understanding of everything from data to the cloud. And they understood where this world was moving and had a very clear thesis on it as well," he continued.</p><p><strong>Read more:</strong> <em><a href="https://www.businessinsider.com/plaid-yodlee-cfpb-anpr-consumer-banking-data-third-party-aggregation-2020-11">Execs from Plaid and Yodlee explain how new data-sharing rules will dictate the future of how banks and fintechs work together</a></em></p><p>Caldwell said part of the influx of capital would go towards hiring engineering and product talent to help bring new MX tools to market and enable faster integration with banks and fintechs.</p><p>To date, the startup has partnered with more than 2,000 financial institutions, and MX said it has seen its user growth double and number of monthly financial transactions triple since the last fundraising round 18 months ago. Headcount, meanwhile, has doubled over the past two years to more than 500 employees.&nbsp;</p><p>According to the company, MX now has a combined reach of more than 200 million consumers in the US across its partnerships.</p><h2>The 'money experience'</h2><p>The driving strategy behind MX's vision of the future, said Caldwell, is to take the vast quantity of financial data MX absorbs, cleans, and packages and begin to derive compelling insights and analytics for consumers that can model their behavior. The result would be the ability to predict what actions they can take to avoid things like overdraft fees or plan for credit-card payments.</p><p>It's what the company calls "the money experience" when it comes to financial transactions.&nbsp;</p><p>"How do we really start to understand the nature of all these transactions' These are recurring. This is their mortgage payment. This is the card payment that we know it comes out about this time of the month. We can model out, 'Are they going to hit zero' Do they need to transfer money over''" Caldwell said.</p><p>"Once you've connected to that data, if you can't build a compelling experience, then you can't engage with the user long enough, you can't deliver the additional value," he continued.</p><p>Caldwell's vision of consumer finance in the future is a more insightful one than most users now experience, and he believes banks and fintech brands can even be "loved" the way companies like Tesla or Spotify are.</p><p>The key is to make user experiences in banking seamless, personalized, and automated the way most modern, digital consumers have come to expect. The process is driven by AI and machine-learning tools, Caldwell said, and above all, scale.</p><p>"99.9% of what you really want to do in banking can honestly be better done via a digital experience, if that digital experience is done right. So then the question is, 'How do I do that experience correctly'' And the answer always comes back to, 'Well, make it data driven,'" said Caldwell.</p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/plaid-yodlee-cfpb-anpr-consumer-banking-data-third-party-aggregation-2020-11" >Execs from Plaid and Yodlee explain how new data-sharing rules will dictate the future of how banks and fintechs work together</a></strong></p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/fintech-moov-raises-27-million-series-a-andreessen-horowitz-payments-2020-12" >This banking-as-a-service fintech helping businesses embed payments tech into their apps just raised a $27 million Series A led Andreessen Horowitz</a></strong></p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/fintech-amount-raises-81-million-goldman-sachs-startup-gs-growth-2020-12" >A startup that's taking a SaaS approach to selling digital-banking tech just nabbed $81 million from Goldman Sachs and other backers</a></strong></p><p><strong>SEE ALSO:&nbsp;<a href="https://www.businessinsider.com/fintech-b2b-early-stage-business-investors-finance-2020-7" >These are the 38 fintechs that investors say are poised to be breakout B2B stars. Meet the startups they think will follow in the footsteps of Plaid and Stripe.</a></strong></p><p><a href="https://www.businessinsider.com/mx-fintech-data-tpg-growth-capitalg-300-million-series-c-2021-1#comments">Join the conversation about this story &#187;</a></p> <p>NOW WATCH: <a href="https://www.businessinsider.com/what-its-like-make-beer-with-picobrew-c-home-brew-2020-3">We tested a machine that brews beer at the push of a button</a></p>
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