With the renewed push for more of the services we use everyday to be accessible online and in a non-physical way, a company out of Switzerland that builds tools for financial services companies to interact better with their customers via the web is today announcing a round of funding to expand its operations.
Appway, which provides software to help banks and others that transact with customers to build banking, mortgage, regulatory compliance and other service management tools, has raised $37 million in equity funding from a single investor, Summit Partners.
Summit is taking a minority stake, but the percentage (and the startup's overall valuation) are not being disclosed.
Hans Peter Wolf, Appway's CEO who co-founded the company with Oliver Brupbacher, said in an interview that the money will go toward continued expansion of its business, both by adding more customers and by building more tools for those customers in turn to provide services to their own users. He added that North America has been one of Appway's fastest-growing markets, and so the plan will be to double down specifically there, alongside existing operations in Europe and Asia.
If you've not heard of Appway before in the world of tech, that's not too unusual: the Zurich-based company has been quietly living, bootstrapped and profitable, behind the scenes and under the startup radar since 2003. But in the last 17 years, it's managed to amass a long list of impressive customers -- a list that features 10 out of 25 of the largest wealth managers in the world, including Credit Suisse, HSBC, J.P. Morgan, LGT, LPL Financial and Deutsche Bank, the telecoms giant Orange, KPMG and others.
The services that it provides range from online banking, mortgage software and wealth management, through to account management, onboarding of new services and customers and a long list of back-office tools to manage customers and data to help the financial services companies comply with regulatory requirements.
Business has been strong, but the reason Appway finally decided to bite the bullet and raise money, Wolf said, was to ride the wave of growth, and bring in new people to the board who could help guide what the next steps might be as its business matures.
He noted that Appway has seen an acceleration of interest in recent months -- predating the current health pandemic, he added, but absolutely sped up with urgency because of it -- related to "business transformation."
Yes, that's a term thrown around a lot in the world of enterprise, but it's actually an important one that is propelling a lot of business for disruptive startups: Huge institutions have been using the same legacy systems for decades, and that creaky infrastructure finally is being replaced with more modern and flexible software, often sold as a service from the cloud, in order to expand what companies can do for their customers.
That's where the current pandemic has figured in a key way for companies like Appway. A lot of financial services -- especially those at the higher end of the market (e.g. wealth management) -- have long existed around the concept of personal relationships and years of face-to-face service, but much of that has had to be reassessed in recent times. Some might have bristled at or resisted the changes (or investments in the changes) in the past, but their hand has been forced, so to speak, by current circumstances.
But coupled with the fact that so many people today are more accustomed to carrying out much of their lives online, the changes are turning out to be, in many cases, not as painful as you might think, and in the case of financial services, we're seeing a big turnaround and embracing of the new platforms. And that means strong business funnels for companies like Appway.
There are a number of companies providing tools to organisations to help build and run services online. Those in the same general area as Appway include Pega, Intalio, Oracle, IBM and more. One key difference is that many of these are general purpose, aiming their low-code approach to a number of verticals, which in one regard makes them potentially much bigger enterprises, but in another means they cannot speak as specifically to the needs of any particular vertical. Appway's focus on financial services in particular -- and of course the fact that financial services happens to be a hugely lucrative industry -- is one thing that stood out for Summit when making the investment.
“Unlike general purpose low-code development platforms, Appway seeks to address core pain points in the financial services industry by automating the flow of work to revolutionize the customer experience and drive digital transformation across organizations,” said Dr. Matthias Allgaier, a managing director at Summit Partners who will also join the Appway board of directors, in a statement. “We believe the company has delivered impressive, consistent capital efficient growth, and we are thrilled to partner with Hans Peter Wolf, his co-founder Oliver Brupbacher and the entire Appway team.”
When you hear about companies like these -- successful startups that have been off the grid of tech media because they haven't been tightly linked to the investment cycle or any obvious consumer news stream -- suddenly raising money, you have to wonder how many more there are innovating and doing more good work in the same way.
One reason Wolf said that Appway never raised money before was because when it was founded, it was just how things were.
"In 2003, venture capital and private equity didn’t exist at all in Switzerland, and I don't think the country's startups were on any radar of any PE house," he said with a laugh. "Ironically, the financial crisis was when we had our first successes in the U.S.," partly because of its regulatory compliance tools, which were suddenly in demand. "Now, I would say it's a steady pattern, Appway made the decision to raise growth equity during an arguably even bigger crisis."
Indeed, as we continue to see more activity spread out beyond the most-obvious tech hubs, it may well be that yet more Appways fall under the spotlight.