FinTech software firm Novea raised $50 million in equity and $5 million in debt financing that will be used for its subsidiaries Jacana Warranty and Jacana Insurance to advance their positions in the consumer warranty and service contracts industry, according to a Monday (Dec. 20) press release.
The funding was led by Newpoint Financial Group, which will get 10% of Novea’s outstanding common stock and convertible redeemable preferred shares.
As part of the deal, Newpoint will also extend a $5 million, five-year, revolving line of credit to Novea, which it can use for operational and overhead expenses.
See also: How Embedded Finance Reshapes, Modernizes Business Payments
As part of the funding deal, Newport will also have the option of purchasing up to $50 million in shares of Novea common stock over the next 10 years. If exercised in its entirety, the transaction value increases to $105 million.
Newport will have a seat on Novea’s board of directors and the risk committee. The company’s reinsurance company will also have the right of first refusal on all Novea “reinsurance business opportunities as well as other customary covenants and monitoring rights.”
Read more: New Data: 67% of Insurance Carriers See Need to Digitize Payments
“We couldn’t have asked for a better financial and reinsurance partner than Newpoint Financial. With this funding, we not only ensure moving Novea to the next level, but we are able to reward our existing long-term investors with a significant appreciation of their Novea shares as this transaction imputes a $500 million market value of Novea,” said Jim Quinlan, CEO of Novea.
“Over the past couple of months, we have been closing multiple new customer contracts which represent significant sales growth for 2022, and we are looking to close out this year’s sales pipeline with contracts value in excess of $10 million in potential new sales,” Quinlan added.
——————————
NEW PYMNTS DATA: AUTHENTICATING IDENTITIES IN THE DIGITAL ECONOMY – DECEMBER 2021
About:More than half of U.S. consumers think biometric authentication methods are faster, more convenient and more trustworthy than passwords or PINs — so why are less than 10% using them? PYMNTS, in collaboration with Mitek, surveyed more than 2,200 consumers to better define this perception versus use gap and identify ways businesses can boost usage.
Credit: Source link
