Digital Garage invests in US fintech startup MX, preps it to challenge Asian incumbents

American fintech startup MX today announced US$30 million in series A funding, led by USAA and joined by Digital Garage. Digital Garage, a Tokyo-based incubator and venture capital firm, will also assist MX with expansion into Japan and other Asian markets.

MX specializes in digital money management and omnichannel banking through a suite of apps and services for both financial institutions and their clients. The startup already works with more than 500 banks and credit unions in the US to provide streamlined online and mobile banking.

Digital Garage was an early investor in Twitter and has previously helped HootSuite, Linkedin, and Path enter Japan. The firm will have its work cut out as Japan has a host of homegrown competitors in the fintech space. Among them are Freee, which secured the second half of a US$14 million series B round last September, and MoneyForward, which raised a US$12.6 million series B last December. There’s also reigning App Store “app of the year” MoneyTree and AngelList-backed MakeLeaps.

“[Beyond expansion], the biggest reason for Digital Garage to invest in a US fintech startup is because [in the future] there won’t be country border lines for online payment and online banking,” Wei Sun, a Digital Garage spokesperson, tells Tech in Asia. “Our subsidiary Veritrans has been providing online payment services to Indonesia, India, Vietnam, and China for years, and we also hope there will be a synergy effect with Digital Garage Group when MX starts their business in Asia.”

Sun says that MX differentiates itself from competing Japanese services by providing its development package to banks rather than end users. MoneyForward, in particular, has been offering corporate financial services as well since January 2014. Add that to near full-coverage of Japanese banking institutions and a user base approaching 2 million, and the MX may have a more formidable domestic competitor than Digital Garage realizes.

MX hasn’t set a timeline for Japan expansion, but Sun says that Digital Garage would assist them in both the domestic market and elsewhere in Asia “whenever MX is ready.”

Digital Garage’s investment in MX is one of several in a US-based startup so far this year, though some of those have yet to be disclosed. The firm also backed Wikia and formed a business alliance with web analytics platform Chartbeat.