ENCINITAS – In a deal that will help it grow and expand, MoneyThumb, Inc., an automated document evaluation and fraud detection solutions business, is now part of Iron Creek Partners LLC out of New Mexico.
A fintech company specializing in document conversion and financial analysis software, MoneyThumb provides tools to convert transactional data from various formats like PDF, OFX and QBO into formats that can be used by accounting software and spreadsheets.
Iron Creek is a private investment firm that is focused on investments in the software, data, communications and business services industries.
Founder
MoneyThumb
The acquisition comes at the same time as MoneyThumb Founder Ralph Mayer said he was looking to retire. Mayer, the CEO of MoneyThumb since it launched in 2015, is now on the company’s board and working in an advisory role, with Ryan Campbell taking over as CEO.
Mayer said the new partnership and Campbell’s taking the lead will help the company scale its operations and enhance its software solutions even as it continues to do more with its document evaluation technology.
“We’re just a small piece of this gigantic thing that is business loans, which has been growing something like 30% a year for the last 10 years, and that’s enabled us to grow,” Mayer said.
Campbell said the company’s role is not only about extending loans but also about preventing fraudulent accounts, which keeps rates down and maintains the overall efficiency of the lending process. He said that the company’s “client-first approach,” which involves understanding clients’ needs and proactively identifying opportunities for improvement in their loan origination process, has allowed it to stay ahead of industry trends and develop a strong product line.
The two key products offered by MoneyThumb are PDF Insights, which extracts and analyzes financial data from PDFs, and Thumbprint, a fraud detection tool that identifies potentially manipulated documents. Used widely in small business finance and lending, both help organizations manage risk and improve decision-making.
CEO
MoneyThumb
MoneyThumb received a SOC 2 designation in 2020 and has grown to 25 employees currently serving about 30,000 customers, nearly 90% of them in the United States, Mayer said.
Among its clients are Chase Bank, Navy Federal Credit Union, Bank of America, Capital One and Wells Fargo.
Accuracy Matters
“One of our big advantages has been that we are more accurate than anybody else, and part of that comes from our approach, which is obviously proprietary, but it’s not an AI-first approach,” Mayer said. “Part of that is for historical reasons but it turns out that that’s been a good fit. Now the Thumbprint product is much more of an AI-first approach, but even there it’s based on being able to find things that we get through an analytic approach, looking at bank statements, and because of that we find a lot more things that the AI approach doesn’t seem to pick up.
“Certainly, as we go forward AI is going to become more and more the way in which these things get processed. I think the fact that we do both gives us a very strong product line.”
Financial terms of the transaction were not disclosed but Iron Creek led the investment group, which also included Main Street Capital Corporation (NYSE: MAIN) and a combination of first lien, senior secured debt with equity warrant participation and a direct minority equity investment. MoneyThumb will also keep its name.
The transaction will provide growth capital to help meet MoneyThumb’s strong industry demand, which Campbell said produced 100% year-over-year annual growth.
Financial Docs and Ferreting out Fraud
Initially, MoneyThumb targeted accountants, but over time it expanded to serve the small business lending and revenue-based financing sectors, which face a high volume of complex financial documents.
Campbell headed the company’s business development starting in 2017 and said MoneyThumb’s main driver of business is on the lending side, but still noted: “We really have a healthy business on both sides.”
The company’s Thumbprint offering has been a big part of its success, owing in a big part to changes in fraud rates.
“Thumbprint identifies whether or not a statement has ever been fraudulently manipulated, and this is actually a really big problem in the industry right now,” he said. “I would say that it is at record levels at this point. In the early 2000s until 2021, you had fraud rates that were under 1%. Now they’re regularly over 6%, so it’s a really significant increase in just the last several years. A lot of it is due to the fact that it’s so much easier to manipulate documents now.”
Mayer said he expects Iron Creek acquisition to push MoneyThumb forward.
“They have a portfolio of high-tech companies and they’re focused on the growth,” Mayer said. “This isn’t a private equity thing. They’re looking at the company growing by 10 times over five years or something like that and they’re looking to make this a very healthy company, a much more name-brand kind of company.”
MoneyThumb, Inc.
FOUNDED: 2015
FOUNDER: Ralph Mayer
CEO: Ryan Campbell
HEADQUARTERS: Encinitas
BUSINESS: FinTech SaaS
EMPLOYEES: 25
WEBSITE: moneythumb.com
CONTACT: Ryan@moneythumb.com
NOTABLE: Company works to help lenders grow and be able to deliver more capital faster to more small and medium sized businesses, helping to drive the growth engine of the U.S. economy.
