CULedger, Kasasa Achieve Milestones in Series ‘A’ Funding & Network Size
This represents a fintech move in the credit union industry that is rarely accomplished.
Two organizations that operate in the credit union community, a new CUSO focused on delivering innovative applications and a financial technology and marketing provider, achieved significant milestones recently.
Denver-based CUSO CULedger, announced it reached its latest goal of $10 million in investments, closing out its series A funding round for its blockchain-based digital ID solution.
CULedger is working to use distributed ledger technology to develop a platform enabling credit unions to enable self-sovereign identity for members through its flagship product, MyCUID. The goal for series A funding was set in October 2017 and has been well received, it said, in the credit union, financial and blockchain communities.
The CUSO pointed out this is a huge achievement, since according to “Towards Data Science,” many startups have an almost 80% failure rate in achieving Series A funding goals. Forty credit unions and organizations have contributed to CULedger’s investment group.
“We are grateful the credit union community recognizes the importance of self-sovereign identification and the innovative future of the digital experience,” Julie Esser, chief experience officer of CULedger, said. “By leveraging distributed ledger technology, credit unions are leading the industry into the next generation of security and trust in financial services.”
CULedger, a consortium of U.S. credit unions exploring potential use cases for distributed ledger technology, began in 2016 as a “research to action” initiative. Its mission aimed to deliver innovative applications in a permissioned, distributed, shared ledger platform for credit unions. CULedger evolved from its “research to action” roots into a new CUSO, which launched in 2017.
In a separate announcement, Austin-based Kasasa claimed it is now the fourth largest banking branch network in the nation, with 907 community financial institutions as current partners. The associated credit unions and banks represent 3,408 branches across all 50 states and 1,749,065 accounts. Kasasa currently serves 264 credit unions representing more than 1,300 credit union branches. Combining all CFIs and branches, Kasasa would create the fourth largest branch network with only three having broader retail distribution.
“We created Kasasa to help community financial institutions shout more loudly than any one of them could individually,” Gabe Krajicek, CEO of Kasasa, said. “Bank of America, standing at #3, we’ll pass you in a year. And Wells Fargo at #1, we’re coming for you. Stay tuned – the good guys are going to win.”
Kasasa held it is committed to helping CFIs meet consumer needs through innovative products delivering disruptively good value. Its free, rewards-based checking and savings accounts require no minimum balance and enable credit unions and banks to increase noninterest income, reduce overall expenses and compete with megabanks. Compared to standard free checking, Kasasa claimed it delivers 50% more accounts in the first year, up to two times annual profit per account and 45% more non-interest income.
“I have been CEO since 2010. We were at $160 million in assets. We’re now $316 million in assets and that’s all organic growth. I attribute that growth to the Kasasa products,” Kasasa client Thad Angelle of Texas-based MCT Credit Union said. “Offering Kasasa to our members has been phenomenal,” Jerry King, president/CEO of the $281 million Wilmington, Del.-based DEXSTA Federal Credit Union, said. “Members tell us how much they like their Kasasa account and have certainly made us aware of how satisfied they are with their Kasasa rewards.”
Krajicek added, “With one, big, collective voice now representing the fourth largest network of branches in the country, we are letting consumers know they have a choice. They can get world class financial products from local institutions that live in and love the same communities they do.”
Kasasa maintained in addition to reinventing checking, it reinvented lending. Launched last year, the Kasasa Loan introduced a concept called take-backs. It lets the borrower pay ahead to reduce debt, but take that extra back if they need it.
To increase consumer satisfaction, Kasasa also works with CFIs to provide ATM fee refunds, and issue rewards by way of interest, cash back, and Amazon, iTunes and Google Play credits, with total rewards they assert reaching over $505 million to date.