Overland Park-based startup Finotta has a powerful advantage: One of its big customers also is an investor.
First United Bank & Trust, a $12.5 billion privately held bank headquartered in Durant, Oklahoma, started as a customer. Then it became the sole investor in a $3 million seed round last fall for Finotta, which developed technology to revamp a financial institution's mobile app with personalized customer experiences. The startup's software uses algorithms to analyze a customer’s financial lifestyle, such as where money is spent, and predict what that customer will need moving forward. The app then can promote financial services that fit those needs.
"We were dreaming about providing the solutions that Finotta was building," said Ryan Suchala, Dallas-Fort Worth regional president for First United.
But what really sold First United on becoming an investor was getting to know Finotta founder Parker Graham and his leadership team and discovering how both companies share a common purpose, Suchala said. They both want to remove financial barriers and empower individuals to make smarter financial decisions. First United's tagline is, "Spend life wisely."
"All of us could use some help in regard to managing our personal finances better, and I think Finotta does it in a way that is truly empowering versus other forms that have proven not to be successful," Suchala said.
Graham and Suchala previously worked together at a different bank. When Graham visited the Dallas area to pitch other banks, he sent Suchala a LinkedIn message about meeting up. Suchala invited Graham to the downtown office.
"I just immediately knew that this bank was different than any of the other ones I'd seen before," said Graham, who noted the bank's vision and mission statement prominently displayed inside the building. The bank also featured a financial journey wall — an aspect Finotta already had digitized.
"We just met this bank, and there's no greater alignment," Graham recalled thinking at the time.
That alignment has been key for Finotta as it adds and enhances features in its platform. Not only does First United bring access to a wealth of users, it's an institution that can help Finotta see the bigger picture and avoid hurdles, such as regulatory compliance.
"It allows us to scale faster," Graham said. "We get to not only come up with ideas, but validate those ideas in a petri dish. ... We can dream up these ideas with this bank and basically say: 'Hey, what else is broken? Let's find a solution.'"
Running ideas by First United also means Finotta isn't wasting resources and time chasing a problem that doesn't need solved, Graham said.
"For an entrepreneur, the absolute dream is to be as efficient as possible with capital and get as much value out of those efficiencies as possible. A lot of folks don't get to experience that," he said.
First United's backing also provides validation for Finotta when pitching to prospective customers.
The bank is among the nation's 200 largest financial institutions, Suchala said. Its founder scaled the bank from about $200 million in assets. First United is sharing those best practices with Finotta and wants to help Graham "see around corners," he said.
Finotta, which employs 10, plans to double its headcount by year's end, filling roles in data, product and sales.
"I think this is just the tip of the iceberg," Graham said. "We've validated with this large institution, and now it's all about scale. We are in this unique situation where we get to go to market with a big bank behind us, not only as a customer but as an investor, which is just another proof point."
