Constellation Digital Partners, LLC has secured a new partnership and Class A $3 million investment from Kinecta Federal Credit Union, based in Manhattan Beach, Calif.
Constellation CEO Kristopher Kovacs closed the investment last week with Kinecta CEO Keith Sultemeier. Kinecta’s $4.13 billion in assets and 286,000 members makes this the largest credit union investor to date in the financial technology software platform and marketplace.
Constellation is the result of a three-year research and development process, which resulted in the filing of a patent in 2015. Kovacs was awarded a patent for his unique technology May 2, 2017. Kovacs realized there was a fundamental problem in modern digital financial services. Despite a recent boom of potential financial technology partners, credit unions have not been able to access them because of the legacy structure of credit union relationships with current digital banking providers.
To date, eight other credit union partners spanning nationwide and now totaling $20 billion in assets, have invested in the platform. The other partners include: Coastal Credit Union, Teacher’s Credit Union, CFCU Community Credit Union, Meritrust Credit Union, Farmers Insurance Federal Credit Union, Georgia’s Own Credit Union, Affinity Federal Credit Union and Nusenda Credit Union.
In total, the credit unions represent a massive user base of more than 1.5 million members. Along with initial credit union investors, CO-OP Financial Services, CU Solutions Group and CUNA Mutual have also invested in the CUSO.
“We believe that Constellation can be a huge step toward modernizing the credit union industry. It will be the first and only cloud-based suite of digital financial services dedicated to credit unions,” said Sultemeier. “Additionally, the open platform gives the industry potentially new and exciting sources of innovation, as well as a means for easy and rapid collaboration between credit unions.”
The marketplace will also build out a new service-based economy where digital service developers can get involved and become service providers and partners on the new platform. Developers can create tiles, or services, and then credit unions can seek out and select services within the marketplace. So far, twenty one service providers have committed to creating services for the marketplace.
“Kinecta is an invaluable asset to us and we’re honored to work with them. This strategic partnership puts us in an excellent position for launching the platform soon,” said Kovacs. “We are very excited to bring Constellation to life with the help of our incredible credit union partners like Kinecta, so that we can truly change the future of how digital banking will work for credit unions and members together.”