Commodity level computer network Banyan gets $43 million

There is strategic gold locked in receipt-level data, also known as SKU-level data, and the appetite to access this insight is attracting not only users, but investors who see the opportunities.

In a clear vote of confidence in both the concept and the company, FinTech Banyan announced on Thursday (October 20) that it has just completed a $43 million Series A funding round led by Fin Capital and M13. With funding tight and the economy faltering, the fundraising signals a belief among early stage investors that receipt-level data has powerful use cases across sectors.

Speaking to PYMNTS’ Karen Webster just before the news broke, Banyan CEO Jehan Luth said the impressive fundraising in a down economy is a testament to his team, and more to the concept itself, as PYMNTS research has found formidable demand for the SKU -level. data.

“Basically, we believe that the entire industry becomes more efficient with the availability of SKU-level data,” Luth said. “We see it as the next wave of FinTech, the next wave of financial services needing better, more accurate, more actionable and cleaner data. And that’s where Banyan can play a very important role in being the invisible rails.”

In a pitch to VCs, Luth said, “it was very important for us to narrow the aperture and focus as a young organization on use cases that are incredibly valuable to the ecosystem, but also deliverable to a company of our scale and our stage.”

Specifically, Banyan focuses on two areas where data at item level can deliver big results.

Luth told Webster “We chose to double the offerings and the rewards area, and … in terms of the cost management area. We think both of these verticals are ripe for innovation. They need fundamentally better data to evolve. That’s where Banyan can play a very central role.”

Although the two joked about the buzzwordy term “product-market fit,” it still applies here. “With the two use cases we have, we’re definitely seeing a lot of interest from the market,” he said, “but there are so many more use cases to be built over time.”

See also: Receipt data builds loyalty gaps for savvy retailers and banks

Take SKU level data to the next level

Admitting that tapping at the SKU level isn’t a new idea, and that his investors have heard the pitch before, Luth believes Banyan’s technology platform was clearly compelling as it stands to enable new forms of personalization and automation that go beyond what is currently available.

Placing Banyan’s market positioning squarely in the infrastructure camp, Luth told Webster that “Often when companies build solutions and the underlying infrastructure, it’s very difficult to show positive unit economics and show scalability. In our case, we’ve separated those two worlds.”

See also: 95% of FIs print receipt data

“We’re not going to make B2C applications. We’re not going to make banking products that consumers can see. We’re going to work with FinTechs and banks that are doing it today and that can work better with our data. The infrastructure approach [is] not just an offering on our deck, but it’s really how we operate. It has enabled us to make sure that when we invest, we see the right unit economics coming out the other side.”

That translates to “scalability on the other side, and we leave a lot of the creativity of what people want to build from SKU-level data in the hands of the organizations we work with.”

And organizations are betting on SKU-level data because it delivers. The new study Tapping Into The Benefits Of Item-Level Receipt Data, a PYMNTS and Banyan collaboration and based on surveys of over 350 executives at financial institutions (FIs) with a minimum of $5 billion in assets and FinTechs with at least 1 million active monthly users , shows “firms are particularly interested in using receipt data to improve consumers’ understanding of their spending behavior and reduce and prevent fraud.”

The study found that firms with high data readiness “are most interested in using receipt data to increase consumers’ understanding of their spending behavior, 73% of these firms are very or extremely interested in using receipt data to prevent and reduce fraud.”

Get the study: Take advantage of item-level receipt data

A former epidemiologist, Luth has a unique grasp of how data analytics can be used to uncover the hidden, in this case, deep insights into consumer habits that are expressed in their purchases.

“The accuracy and purity of data [is] not an option in the health area, right? That has to be the standard, he said. “I think we brought that level of transparency, we brought that level of rigor to FinTech, which a lot of organizations in the FinTech space aren’t used to doing.”

Although privacy regulations crack down on how consumer data can and cannot be used, he said. “We support it because that’s our model. Everything we do is about giving consumers access to their data and the applications they choose. So yes, I came at this very differently, but then our team also came at this very differently, some from banks, some from other companies.”

To the inevitable question of how Banyan will use its $43 million cash infusion, Luth said the concept needs the infrastructure to scale, and they plan to be a force in creating it.

“The beauty of building infrastructure businesses is that it requires incredibly disciplined investment at construction scale,” he said. “The goal for the next couple of years is to build out scale, bring more merchants on the network, partner with more banks and fintechs. We’re definitely going to invest in building out the technology. It’s really building the infrastructure.”