Orum, which aims to speed up the amount of time it takes to transfer money between banks, announced today it has raised $56 million in a Series B round of funding.
Accel and Canapi Ventures co-led the round, which also included participation from existing backers Bain Capital Ventures, Inspired Capital, Homebrew, Acrew, Primary, Clocktower and Box Group. The financing comes barely three months after Orum announced a $21 Series A, and brings its total raised to over $82 million.
Orum CEO Stephany Kirkpatrick launched the company in 2019 after working for several years at LearnVest, a personal finance site founded by Alexa von Tobel that was acquired by Northwestern Mutual in 2015 for an estimated $375 million. Tobel went on to form Inspired Capital, a venture capital firm that put money in Orum’s $5.2 million seed round last August. Prior to that, the firm also provided Orum with an “inspiration check” that was the first money into the business.
As a certified financial planner, Kirkpatrick says she saw firsthand what she describes as “deep cracks” in this country’s financial infrastructure. The fact that it takes days for money to move from one bank to another is not only inconvenient for many, but unnecessary, she believes.
“Most Americans are not familiar with the intricacies of ACH [automated clearing house) or why it takes multiple business days to move money between accounts,” Kirkpatrick said. “But none of us can allow money to wait 5-7 days to hit our accounts. It needs to be instant.”
Her mission with Orum is straightforward even if the technology behind it is complex. Put simply, Orum aims to use machine learning-backed APIs to “move money smartly across all payment rails, and in doing so, provide universal financial access.”
Orum’s first embeddable product, Foresight, launched in September of 2020. It’s an automated programming interface designed to give financial institutions a way to move money in real time. The platform uses machine learning and data science to predict when funds are available and to identify any potential risks. Its Momentum product “intelligently” routes funds across payments rails and is powered by banking providers JPMorgan Chase and Silicon Valley Bank.
“They power the back end of our Momentum platform that allows the money to move on a multirail basis,” Kirkpatrick told TC. “They power our access to real-time payments.”
Orum says it serves a range of enterprise partners, including Alloy, HM Bradley, First Horizon Bank and Zero Financial (which was recently acquired by Avant).
The volume of transactions being conducted with Orum is growing 100% month over month, Kirkpatrick said. Most of its early growth has come from word of mouth.
The remote-first company prides itself on diversity — in both its employee and investor base. For one, 48% of its 55-person headcount are female, and 48% are “nonwhite,” according to Kirkpatrick. Orum also recently joined the Cap Table Coalition — a partnership between high-growth startups and emerging investors who want to work to close the racial wealth gap — to allocate over 10% of its Series B round to underrepresented founders. For example, the financing includes investors such as the Neythri Features Fund, a group of South Asian women investing in the next generation of female founders and diverse teams.
Jeffrey Reitman, partner at Canapi Ventures (a firm whose LPs mostly consist of banks), told TC that those bank LPs conduct hundreds of millions of ACH transactions annually,
“They need a path to achieving a state where funds can be transferred instantly,” he said. “Orum’s product paves the path for many players in financial services and fintech — and beyond — to partake in faster money movement without compromising key risk principles.”
To Reitman, the company’s major differentiators are its team, which he describes as consisting of “the best group of data scientists and engineers in the space.”
“Many of their customers consider the team to be instrumental in helping to set the risk dials on how they fund transactions by teasing out key data and insights from historical transaction data,” he said. “Second, Orum is building one of the densest and most comprehensive data sets around the risks of money movement. Better data means better risk models, and it will be hard for other offerings to match Orum’s approach to building this rich data set.”
Accel Partner Sameer Gandhi, who joined Orum’s board as part of the latest financing, agrees. He believes that in an 18-month period, Orum has built “game-changing technology and an exceptional team.”
“Orum is tackling financial infrastructure from its foundation,” he said.
