What is the hottest area in fintech today? It’s funny, but this is fintech for fintech (say it a few times quickly).
Fintech startups have grown significantly over the past few years, but it’s still a highly fragmented space and this is where fintech for fintech companies come into play. support their core business.
Right acknowledges that this fragmentation can become confusing very quickly. The company is working to streamline operations at other fintech startups, in particular through its reconciliation software that these companies can use to ensure they are working with accurate and accurate data, even if it comes from different locations, the co-founder said. and CEO Kyle Maloney. tech crunch. According to Maloney, the company’s main product is a kind of universal ledger that displays and reconciles transaction data based on basic accounting principles.
Maloney and his co-founder Travis Gibson met while working on engineering teams at card company Marqeta.
“During our time at Marqeta, as we were building new money transfer integrations, we were constantly in the process of bringing together different core providers — think banking partners, payments, vendors, direct network integrations,” Gibson said in a call to TechCrunch.
Gibson added that in their previous roles, they often spent 80 to 90% of their day building the underlying financial data infrastructure to support various cash flow methods. Proper was created out of a desire to simplify the data management process for fintech companies so they can focus on their core business, Gibson said.
Maloney said the problem could be especially challenging for fast-growing, early-stage companies looking to create more specialized products.
“Using a holistic stack like Stripe may not work for every type of money transfer transaction. [early-stage companies] trying to complete. And here’s what happens: they find themselves in this existential crisis where Stripe is great, or any number of these providers are great, but they might want to use a best in class solution like Modern Treasury for ACH. [for example]and now they need to build a bunch of infrastructure under the hood that Stripe provided, especially for their service,” Maloney said.
A number of other “fintech for fintech” startups such as merger as well as Novoplatezh, have taken an API development approach to help fintech solve integration challenges. But Proper’s product is not an API, because the company is in the business of creating integrations, not just providing tools for developers to work with on their own, Gibson explained. In the long term, Proper plans to create APIs and expand its portfolio of integrations, he said.
According to Gibson, Proper uses two main strategies to ensure data accuracy. The first is “balanced matching,” where the startup monitors money at banks and with outside parties to make sure funds they think have been transferred make it to their destination. According to Gibson, the second is “transaction matching”, which is essentially what it looks like – getting data from a given transaction from different sources and making them link.
The startup, which participated in the Y Combinator Winter 2022 cohort, announced today that it closed a $4.3 million seed round led by Redpoint Ventures with participation from BoxGroup, Mischief, Y Combinator and more. Gibson and Maloney declined to say how many customers Proper is serving today, but said they have a few new customers every week.
The team, which now consists of 6 people, plans to use the new capital to create a no-code financial dashboard that will fit in with the company’s goal of helping engineering teams save time.
“One of the things we’ve been hearing a lot about is that there’s a huge need for finance teams within a company to be able to manage, customize and process cash flow without the need for technical intervention,” Maloney said.
Maloney said he has mostly seen other fintech companies solve their reconciliation and accounting issues internally with their own solutions.
“We haven’t seen anything that really solves the problem of reconciliation and bookkeeping in one all-in-one solution. Today, we know that companies often manage these processes internally with custom SQL queries and Python scripts, operations teams and spreadsheets,” said Maloney.
Credit: techcrunch.com /