SEATTLE--(BUSINESS WIRE)--The following is a message from ModusBox founder and CEO David Wexler:
ModusBox’s Board of Directors has approved a plan to separate PortX Inc., our North American-based integration software business for community financial institutions, from our Mojaloop development and support team delivering real-time payment infrastructure and financial inclusion initiatives. Additionally, I’m pleased to announce that PortX has closed a $10M Series A funding round with Fuse and BankTech Ventures to propel company growth and scale product capabilities.
With some luck, we built two companies
In 2013, along with Co-founder and CTO, Kent Brown, I started ModusBox to build a premier services team of integration experts and develop a tool for simplified B2B integration and EDI messaging for the logistics industry. We bootstrapped the company by investing funds from consulting services back into R&D for the software.
During this time, we completed several integration projects for community financial institutions (CFIs) - namely, banks and credit unions. In the process, we learned that the financial services industry was in dire need of modern integration capabilities and that the CFI market demanded a solution tailored to their needs instead of the typical general-purpose integration technologies available. This led us to develop our integration platform, PortX, which proved its flexibility as it easily adapted to solve the typically complex challenges faced by CFIs when integrating disparate applications and digitally connecting to fintech partners.
We pivoted the business and invested in the PortX platform by expanding functionality and building reusable API-centric integrations for financial service technologies. Soon, the PortX platform gained traction in the financial services marketplace as a leading integration and infrastructure technology connecting CFIs and fintechs.
Our expertise in solving application integration challenges in the financial arena also led us to design and develop Mojaloop - the first open source software for interoperability in real-time payment networks. This was a defining achievement for ModusBox as it set us on a trajectory to help solve financial inclusion challenges globally. In the process, we added some of the brightest technologists working on real-time payments solutions to our team and quickly gained a reputation as a payment industry leader.
ModusBox became a member of the Mojaloop community and one of the primary contributors, building and supporting this groundbreaking open source payment network. Elements of the PortX platform enhanced Mojaloop usability by simplifying the onboarding process for CFIs joining a Mojaloop-based payment network.
These parallel developments are what lead us to today’s announcement.
Motivation for spinning off PortX
For several years, ModusBox has operated complementary yet independent sides of its business: Supporting Mojaloop to develop, deploy, and operate an open source real-time payment network (ModusBox) and delivering a world-class iPaaS for the financial services industry (PortX). Inevitably, a corporate reorganization was necessary to maximize the potential for each side of the business and magnify the value they offer their respective customers.
As separate entities, ModusBox and PortX are empowered to:
- Realize additional financial security as a result of a capital structure change;
- Independently pursue strategic objectives with financial targets that more appropriately match the distinct market-fit opportunities;
- Seek capital investment and other partners that pursue similar business objectives;
- Efficiently allocate capital, technology, and team resources in a manner best suited for each company’s strategic goals;
- Execute on key performance indicators that align with improved profitability forecasts;
- Foster unique company cultures, benefits, and career opportunities for team members in harmony with distinct geographic customs and company missions.
Meet PortX’s Series A investors
This funding round is led by FUSE and BankTech Ventures, and they join Patamar Capital, Choice Bank, and American Capital Partners - our investors from the $7.5M Series A round we announced earlier this year - to bring the total combined value of the Series A round to $17.5M.
FUSE is a venture capital firm based in Seattle that launched in 2020 as a spinoff from Ignition Partners - a well-respected firm that invested in Seattle technology startups for 20 years, including the likes of DocuSign and iCertis.
“FUSE invests in Pacific Northwest-based technology businesses with an unmistakable drive for solving the biggest industry challenges that organizations face today,” said Brendan Wales, Founding Partner at FUSE. “PortX fits perfectly into our portfolio because its platform unlocks innovative new solutions, fintech partnerships, and speed to market for community financial institutions struggling to keep pace with big bank competitors with even bigger budgets.”
I’m pleased to have BankTech Ventures join this funding round. The firm participated in ModusBox’s $7.5M Series A round at the end of April and has played an instrumental role in our success this year by introducing PortX to CFIs throughout their network.
“We were thrilled to double down on our investment and partnership with PortX. Just in the last four months, we’ve observed firsthand the benefits that PortX’s seamless integration platform provides to our network of banks,” said Carey Ransom, Managing Director at BankTech Ventures. “We are excited for the increased focus that the new PortX entity will have on the community banking world and working with the team to open new, innovative opportunities and fintech connections for our banks.”
Partnering with Fuse and BankTech Ventures will scale PortX as an industry leader that connects CFIs to the new crop of fintech partners that are revolutionizing the industry.
Independent company focuses with a common mission
The spinoff creates two independent companies focused on solving unique challenges for the variety of customers we serve across distinct sectors of the financial services landscape and better positions each entity to unlock its full market potential.
ModusBox Inc. will operate payment infrastructure for financial inclusion initiatives, particularly throughout Southeast Asia and Africa. The company remains committed to the ongoing design, development, and advocacy of Mojaloop technology and interoperability in Mojaloop-based real-time payment networks.
PortX Inc. will focus on providing best-in-class integration solutions to CFIs and fintechs, including the PortX platform - the Integration-Platform-as-a-Service (IPaaS). The company will strive to grow the technology to support global transformation and API capabilities for CFIs.
Despite the differences between ModusBox and PortX, our companies remain focused on a shared mission to create universal access to reimagined financial services that improve people’s lives.
Here’s to what’s next
Today is the most significant moment in the history of ModusBox and PortX, but it's also just the beginning.
To the team that made this possible - thank you and congratulations. Few organizations ever realize the level of success we’ve had - let alone the success that both of our businesses have achieved.
To our customers, partners, and investors - without you, we wouldn’t have had the runway to get in the air. Thank you for your business and your support.
I’m excited to see ModusBox continue to succeed with its focus on enabling interoperable, instant payment systems that drive financial inclusion in parts of our world where vulnerable people need it most. And I’m looking forward to accelerating PortX’s advancement as a leading integration and infrastructure company that transforms the business model of CFIs and fintechs.
About PortX
PortX is a technology company focused on financial services integration software that unlocks access to banking core data, eliminates vendor dependencies, and enables embedded banking-as-a-service solutions. We help financial institutions empower their teams to connect to fintech partners and real-time payment networks like Zelle®, ACH, Fedwire, Mojaloop, and others. Our solutions enable interoperability between internal systems and member services such as online banking, credit checks, mortgage and loan applications, and others, allowing for a timely and accurate view of customer data. For more information, please visit www.portx.io.
About ModusBox
ModusBox is a global software company delivering equitable and inclusive financial services by driving participation in real-time payments. It maintains a leading role in the Mojaloop community through contributions to the core solution and development of adjacent capabilities. ModusBox supports government, industry, and commercial organizations with scheme creation, hub business operations, and technical operations for self-hosted or cloud-based Mojaloop real-time clearance solutions. The company provides financial institutions with training and integration through the Payment Manager onboarding and participation tools. Its enterprise support licenses ensure dependable service by covering implementations of core solutions or the participation service used by connected financial institutions. For more information, please visit www.modusbox.com.
About FUSE
FUSE is an early-stage venture capital firm investing in Pacific Northwest-based Seed and Series A companies that are reinventing the modern economy with software. FUSE is committed to supporting the next generation of B2B technology entrepreneurs building category-defining businesses of lasting value. Founding Partners Kellan Carter, Brendan Wales, and Cameron Borumand are joined by Venture Partner and 8-time Pro-Bowler Bobby Wagner, as well as Senior Operating Partners John Connors and Satbir Khanuja. The strategic LP base includes current and former executives at the Pacific Northwest’s top companies, including Microsoft, Amazon, Nike, Starbucks, Costco, T-Mobile, Avalara, DocuSign, Smartsheet, and many more. For more information, please visit www.fuse.vc.
About BankTech Ventures
Established in 2021, BankTech Ventures, LP is the first venture fund created for and by key leaders in community banking, bank technology, and fintech. BTV serves the community banking ecosystem through strategic investments, education, and collaboration with its limited partners and ICBA members by delivering a de-risked and/or fully vetted network of leading and emerging bank technology companies to enhance a community bank's value, as well as aim for strong returns from the underlying investments in these companies. For more information, please visit www.banktechventures.com.
