Rize Raises $11.4M to Expand Embedded Fintech Services

Rize Secures $11.4 Million in Series A Funding

Rize, a company delivering fintech solutions to other businesses, has announced the successful completion of an $11.4 million Series A funding round. Alpha Edison and Morpheus Ventures spearheaded the investment. Existing investors also contributed to this financing event.

Navigating a Competitive Fintech Landscape

Rize operates within a highly competitive market, as numerous companies are focused on developing financial technology products. The company aims to differentiate itself by providing a unified API. This allows clients to access multiple account types through a single integration point.

Introducing "Synthetic Accounts"

A key innovation from Rize is the development of what they term “synthetic accounts.” While the term “synthetic” may evoke negative connotations from past financial events, this implementation is distinct. These accounts enable Rize’s customers to offer a consolidated account experience to their end users, independent of specific custodial account types.

Essentially, synthetic accounts empower Rize to combine various custodial accounts – such as checking and brokerage accounts – into a single, streamlined interface for the end user, who is a customer of Rize’s client.

The Benefits of a Unified Financial Experience

According to Rize’s published white paper, a single “synthetic account core” facilitates the creation of a more integrated and programmable financial experience. Furthermore, the synthetic account system is designed to accommodate the addition of new services as Rize expands its capabilities.

Industry Recognition of Rize’s Innovation

Howard Ko of Morpheus Ventures highlighted the company’s synthetic account technology as a primary factor in his firm’s investment. He stated that it effectively simplifies the complex infrastructure needed to build a wide range of fintech products, offering developers a streamlined API connection.

Streamlining Compliance for Fintech Companies

Rize has integrated a comprehensive compliance management system into its product. The company likens this to the logistical challenges in e-commerce – a critical, complex, and often undesirable task. Rize intends to reduce this burden for its clients, potentially giving them an advantage over competing banking-as-a-service providers.

Product Roadmap and Future Expansion

Rize has already completed the foundational elements of its core banking product. The company, which initially began as a B2C venture before pivoting to a B2B model, is now focused on adding brokerage support. The new funding will accelerate the expansion of its product offerings.

Accelerated Growth and Funding Timeline

Rize’s leadership shared with TechCrunch that they secured their Series A funding ahead of schedule. Initial projections anticipated slower market adoption, but stronger-than-expected demand necessitated an increase in personnel, leading to the decision to seek external investment.

Team Expansion and Growth Plans

The company has grown from a team of approximately 15 to over 30 employees following its B2B pivot. Rize anticipates reaching a team size of nearly 50 by the end of the current year.

Looking Ahead: Consolidation in the BaaS Space

Consolidation within the banking-as-a-service (BaaS) sector is anticipated. However, this is likely to occur once the market matures and fewer opportunities remain for new entrants. Rize aims to position itself as an acquirer during this eventual consolidation phase.

The success of Rize will depend on its ability to rapidly scale both its customer base and revenue generation with the support of this Series A funding.