American Banking Startup Cogni Secures $1.7 Million Seed Funding

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Trending in the latest startup news, a US-based digital banking startup called Cogni Inc has closed $1.7 million in seed funding. The new development is a boon for Cogni and will open many doors for the future of fintech. Read on to know more about the New York-based organization and how the seed funding will impact its future.

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What is Cogni Inc?

Cogni is a privately held company with a data-driven banking app. It uses machine learning in order to provide integrated lifestyle services on a single digital platform. The aim of the company is to decrease the number of applications on a user’s phone by 30-40%.

This will help to create an ecosystem that can seamlessly connect the user’s finances and lifestyle. Cogni was founded in 2016 and employs less than 50 people at its three office locations in New York, California and Dublin, Ireland. The two-year-old startup is owned by Barclays Plc. For its first round of venture capital financing, called the Series A funding, Cogni hired a boutique bank as advisers.

What Does Cogni Do?

As a digital banking startup, Cogni plans to stay ahead of traditional banks by offering unique services. Generally, banks make money by collecting cash from depositors and lending it at a higher rate to borrowers. In contrast, Cogni will be able to earn its revenue by forming partnerships with companies. These companies will offer various products and services to their users.

Most fintech companies in the USA are apprehensive of applying for a charter. Once a charter is filed and approved, a company becomes legal and legitimate. Since none have been awarded yet, companies such as Cogni are reluctant to become the test subject. As of now, the company plans to operate on a borrowed charter.

Cogni’s Future Plans: Innovation is Key

In an interview with Reuters, the CEO Archie Ravishankar shared details of the seed funding. He disclosed that Cogni had no plans of applying for an independent charter. This could mean that the company wants to position itself in the market as a tech company rather than a banking one.

In the same interview, Ravishankar stated, “We are not innovating a lot within the financial services space but we are innovating a lot in the lifestyle space”. He also shared insights about how traditional advertising has lost its charm on younger customers due to the constant bombardment of marketing.

How the MyCogni App is Different from Competitors

Although Cogni is just starting out, its future looks promising. The app is yet to gain popularity in the United States. Its single payment and commerce platform allows users to conduct transactions on the same application where they can manage their money. This trend is already gaining traction outside the US with apps such as WeChat. Such apps are highly beneficial for users as well as merchants.

The MyCogni application has already been tested in the US. Over the last two months, a few hundred users have been enlisted to try the app. According to company representatives, over 30,000 users are eager to sign up when the app officially launches at the beginning of 2019.

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The MyCogni app boasts many unique features. These include a debit card offering over 12 percent cash back on purchases made at over 160,000 retailers. Additionally, customers who are freelancers can send invoices and divide their cash into savings buckets and personalized payment.

The stake in Cogni is the latest investment made by Barclays. Recently, the European bank has increased its investments in American fintech companies as it tries to expand in the US market.

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