The past year has been particularly fantastic for the fintech company Presontics. The company’s revenues, which provide Israeli and international banks with an engine for custom digital banking, have grown by about 50%, the highest ever growth volume, which has infused tens of millions of new dollars into the company’s coffers.
And not for nothing: all the stars seem to have worked out for the founders David Susanna and David Guvrin: the open banking revolution – which allows customers to skip from bank to bank, the rise of fintech companies, personalization of products to customers, and the digital banking revolution – all led to high demand for its products as well as Of competitors.
Presentix’s system is installed in dozens of banks around the world, including Discount, Poalim and Leumi, American Wells Fargo, Canadian RBC Bank, Santander in the UK and Asian DBS. It characterizes clients according to their financial behavior, analyzes their spending and income patterns and provides customized investment advice in order to prevent them from going into the red and allow them to make smart and automatic savings at different risk levels.
One of its popular programs is personal savings in which the software knows how much money to allocate each month for savings and at what time – based on the user’s behavior patterns.
Today (Wednesday) the company announces a capital raising of $ 85 million, in which it signs a year in which it raised a total of $ 160 million. The current round was led by a well-known name in the Israeli investment arena: the investment company Toma Bravo, which is remembered as the one that merged Iron Source last year, and which has meanwhile suffered a 40% drop in the share price.
The two companies – Iron Source and Persontics – have a joint investor, the Viola Fund, and from there the connection. Aside from Spacks, Thomas Bravo also makes extensive private equity investments and the Personontics deal is included in this category.
The total fundraising in the last year, $ 160 million, is considered an exception for the company, which has raised only about $ 30 million in the last decade.
On the way to an IPO?
Is there any hint in this investment that the company intends to go public soon? Not necessarily. Presnotics sees the race for the IPO of Israeli companies in the markets and in the meantime is in no hurry to get rid of the status of the private company.
The latest recruitment will serve the company primarily to expand its sales and service branches worldwide – after two years of making deals and support almost exclusively remotely – and to acquire wealth management companies that will allow the company to focus more areas on retail customers.
Not everything went smoothly for Personetics, a company founded more than a decade ago. “It took us something like four or five years to convince the banks that this issue of customer involvement in their account is an important matter,” Susanna said in an interview with Globes last year.
“It may sound absurd to you and me today, but one American banker in 2015 asked me, ‘Why would I warn a customer that he is about to go into a minus, if he pays me a commission for that minus? The customer will close the minus and I will not be able to charge him a commission.’ I ask him: And what about customer service? After all, at a certain moment the customer will also want to take a loan, take out a mortgage or take out a credit card, you want the customer to be satisfied with the service he receives and come back to you again and again. That can issue him credit, so it does not interest me ‘.
“This is the reality of six or seven years, in which bankers saw themselves as unrivaled masters, those who controlled the customer, those who did not consider the price. These were the years when we talked about things no one understood, ours was clear that would change the banking world, and in that sense I can say “We were ahead of the market. As soon as the digital age started running, we got a crazy boost that day.”
A proactive savings system
The Canadian bank RBC was the first in the world to agree to go one step further and work on a proactive system for saving with Israeli society, and this happened only four years ago. The program run behind the scenes by Presentix’s system is active to this day under the Find & Save brand, and it offers the customer at the right time to make a deduction from the savings account according to a special algorithm that identifies the customer’s spending and savings habits and proximity to overdrafts.
The program, which began with a provision of up to $ 50 per day, has become a dizzying success with hundreds of thousands of users. A similar product was later launched at Discount Bank called Smart Savings, and today over one million customers around the world automatically save through PresonTix.
According to the company’s five-year plan, simple savings is the first step. There the smart algorithm is required to know whether the customer needs the money or not, and in the future it is already working on setting savings goals and objectives, such as flying abroad, studying, or paying rent, and a proportional distribution of savings between destinations so the system knows when to set aside The amount in order to be saved and not go to immediate spending.
Thereafter, Persontics’ plan will allow up to 10% of the salary to be set aside for various needs depending on the defined goals and the algorithm’s considerations. “The vision is to be the banking tesla,” says Susanna. ‘Let everything be automatic. The customer will set goals in a general way, and we will manage all the money distributions between his accounts and the use of open banking allows it to be done between banks as well. Bank to me American Bank allows us to transfer between banks, if you have activities in other banks. Some people have their checks account in another bank. That there will be an account in Mizrahi, but you can make the investments elsewhere. ‘
According to the company’s announcement, it allows 120 million bank customers to be financially managed with the help of its “autopilot”, which has so far accumulated $ 500 million in their savings. The intimate (but not personal – the company is not allowed to collect user details) with the customers’ behavior patterns, along with a connection to credit and savings products will allow it to offer complementary products to traditional and digital banks and thus increase its market share.