Omnyway wants to boost its global reach, necessitating a geographically diverse range of investors for its new funding round.
Omnyway on Thursday closed a $12.75 million funding round, led by Nyca, CommerzVentures and CEFIF.
"We were able to cover the U.S., Europe and Asia, which gives us access to expertise in those parts of the world," said Ashok Narasimhan, CEO of Omnyway.
CommerzVentures is the venture arm of Commerzbank Group of Germany and CEFIF is part of the CreditEast Fintech Investment funds with ties to CreditEase of China. All three companies specialize in financial technology, making them better versed in the myriad challenges facing the fintech and financial services industries.
The rapid changes in the payments industry require both product and geographic diversity as new companies enter the market. Omnyway has to move quickly to respond to a market with uncertain regulatory and business challenges.
Omnyway changed its name from Omnypay this year as part of a technology-driven diversification into broader merchant services. Its platform creates a channel between retailers and shoppers at stores and electronic channels to match marketing, content and payments.
It's clients include Kohl's, which uses Omnyway to connect Apple Pay with its loyalty program in Kohl's mobile app. And Omnyway more recently introduced a feature that allows consumers to make purchases on mobile apps and sites directly from advertisements. It hopes to add features to these products and introduce them into new markets as a result of the new investment.
Omnyway was looking to draw investors with a more specialized knowledge that could also provide deeper consultation.
"Things have changed in how technology is disrupting the financial services industry, and over the last couple of years it has made it clear to everyone that on one hand you have highly regulated financial industries, and other other you have segments such as payments, lending and other services where the regulatory environment is very different," Narasimhan said.
In just the past few years, the payments industry has been disrupted by third-party mobile app developers, banks and merchants. Investors with experience and a deep understanding would have an immediate take on this complicated market, with less of a learning curve and more of an understanding of the funding and consultation needed to compete in financial and payments technology, according to Narasimhan.
"The [fintech] sector continues to evolve substantially and mature," said Hans Morris,managing partner at Nyca Partners, in an email, adding there are now thousands of companies at every stage, and significant capital investment from diverse sources, including European and Asian investors. "Specialization is important because it enables an investor to understand the nature of the problem with great specificity, and similarly identify solutions that directly address the problem, and with a highly credible team and the right level of resources."
Morris is also chairman of the board at Lending Club and a board member at KCG, Boomtown, SigFig and Payoneer. He served as president of Visa between 2007 and 2010 and worked in a variety of financial and technology posts at Citigroup.
Advancements in technology that are native to specific industries are driving specialization in venture capital across the board, according to Michael Moeser, director of payments at Javelin Strategy & Research.
"Banking, pharmaceuticals, biotech, and artificial intelligence are all highly regulated markets or highly technical or both, where the ability to navigate tem is critical to success," said Moeser, adding strong intellectual capital lawyers and an understanding of the business and legal environment have joined money as the ways to impress entrepreneurs.