Back in May, we rated KapitalWise as a Deal to Watch. After raising its first round on MicroVentures, the team has returned to the crowdfunding space with a deal offering on StartEngine. The product, a banking customer relations software, operates within the large and growing fintech space.
A Quick Recap
KapitalWise is an AI-powered customer relations solution aiming to bring banking client relationships into the 21st century. Here’s what we said about this pain point in our original analysis:
“According to recent research from Statista, more than 70% of senior banking executives cited changing ‘customer expectations’ as the single most important factor disrupting the banking sector today. Just over half, 54%, were most concerned about increasing consumer demand for digital channels. Additionally exactly 50% of the same group pointed to disruption caused by emerging technologies such as artificial intelligence (AI) and blockchain.”
The KapitalWise solution has the capacity to pull behavioral insights from customer information to provide “hyper-personalized” financial advice. These personalized insights enable an adaptive banking experience unique to the client and responsive to major events in the client’s life.
The product is distributed via a B2B SaaS model. SaaS pricing comes to $1.80-$3.00 per year. The team also charges an installation fee of $150-$300k.
When we last saw KapitalWise, the team had signed contracts with Bank Of America, Standard Chartered Bank UK and Barclays South Africa (ABSA). Now, they have expanded with “a Letter of Intent from one of the top US digital banks, as well as innovation and sales partnership agreements with Finastra, ICBA, and Barclays Rise” according to their current raise page.
Though not much time has passed between KapitalWise’s raises, potential investors should note that the company’s valuation has nearly doubled from $8M for the raise in May to $15M for the current raise. This kind of multiple is to be expected in response to high growth, and KapitalWise did grow revenue from $30,800 the prior fiscal year to $79,000 for the most recent fiscal year. However, these numbers remained constant across raises as the deals were only a few months apart. These deal terms are something potential investors should keep in mind, especially considering the relatively stagnant nature of the raise over such a short time.
As stated in our previous report, KapitalWise “stands on the cusp of a mammoth opportunity to help banks address a key challenge in retaining their increasingly demanding customer bases.” That said, the valuation has nearly doubled, and though there presumably has been notable progress with regards to paid pilot partnerships, the proximity of the raises makes growth proportional to the increase in valuation next to impossible.
Wall Street has Morningstar, S&P, and Bloomberg
The equity crowdfunding market has KingsCrowd.
About: Olivia Strobl
Olivia comes to KingsCrowd with a background in venture capital and technology. She spent time at Glasswing Ventures, an AI-focused venture fund in Boston, before joining the KingsCrowd team. There she helped develop machine learning algorithms for the opportunity qualification of preseed and seed-stage startup companies. Prior to her time at Glasswing, Olivia worked in a lab studying the neural correlates of attention. She holds a degree in Neuroscience from Wellesley College.