Here's another way Amazon and banks are collaborating
So, what happens when Amazon, two big banks and a fintech step into an investment deal?
It sounds like the beginning of an old joke, but the serious answer is a multimillion-dollar venture capital agreement and the further blurring of the lines between the bank and fintech camps.
SunTrust Banks, Ally Ventures — the strategic investment arm of Ally Financial — the Amazon Alexa Fund and others have raised $16 million in a new round of funding for Greenlight Financial Technology, which makes “smart” debit cards aimed at instilling sound financial habits in kids, teens and college students, the parties announced Wednesday.
The rivalries between tech startups and banks, and between Amazon and banks, were an early preoccupation, but lately the various players' words and deeds have focused on partnerships. Fintech investment is on the rise, fueled heavily by dollars from financial institutions, according to a recent KPMG report. Amazon has long been considered a threat to disintermediate traditional banks, but lately the two sides have teamed up on everything from banking over voice-activated devices to a high-profile health care reform effort.
The investment in Greenlight, a Series A investment that reportedly values the 3-year-old Greenlight at about $50 million, could increase to $20 million, according to an Atlanta Business Chronicle story on the deal.
TTV Capital led the new round and was joined by existing investors New Enterprise Associates and Relay Ventures, and by new investors that included Ally, SunTrust, Amazon. A unit of Live Oak Bancshares in Wilmington, N.C., and nbkc bank in Overland Park, Kan., also invested.
Greenlight provides a financial platform that it says helps parents teach their children about managing money. The firm offers a mobile app and smart debit cards with parental controls. Using the Greenlight platform, parents can limit which stores their children may spend money in.
Greenlight's offerings “support Ally's broader purpose of helping customers to achieve financial well-being through a powerful combination of smart digital financial products and services, and education, tools and resources that build financial knowledge,” Ally said in a press release.
Ally has formed alliances with other fintechs and "will continue to proactively seek opportunities that advance Ally's strategic objectives," Peter Greene, head of Ally Ventures, said in the release.
SunTrust says Greenlight's products fit in with its emphasis on personal financial management and financial education.
"It's never too early to begin learning how to manage money," said Ellen Koebler, head of consumer solutions for SunTrust.
"Helping the next generation take a step towards financial confidence is one way in which SunTrust realizes its purpose of lighting the way to financial well-being."