Dynamics Inc. Raises $35 Million in Series B Funding

Investment Led by Bain Capital Ventures Will Propel Next Generation of Payment Cards

PITTSBURGH--()--Dynamics Inc., an innovator in next-generation payment cards and systems, today announced that it has closed an oversubscribed $35 million Series B round of financing led by new investor Bain Capital Ventures. Dynamics launched its award-winning Card 2.0® technology last fall, and its products are currently in consumer trials with several top multinational payment card issuers.

Dynamics will use the funding to increase the size of its team and production capacity to support the continued U.S. deployment of its Card 2.0® technology, which debuted at DEMO Fall 2010, winning the title DEMOgod and the $1M People’s Choice Award. Card 2.0® also won Best of Show at FinovateFall 2010 and Best in Show at the 2011 Consumer Electronics Show (CES) for Personal Electronics. With this investment, Dynamics will also continue to develop and deploy additional next-generation payments products such as battery-powered contact chip “EMV” cards, battery-powered RFID “contactless” cards, and phone-based payment systems.

“Payment cards generate more than $3 trillion of annual purchase volume in the U.S. alone, and card issuers spend more than $20 billion annually to attract and retain cardholders,” said Jeff Schwartz, Managing Director, Bain Capital Ventures, who is joining the Dynamics Inc. Board of Directors. “Dynamics offers card issuers the ability to meaningfully differentiate their card products and to provide unprecedented payment functionality to their cardholders. Dynamics is the only company that provides issuers with this capability without requiring a change in the point-of-sale infrastructure, delivering breakthrough innovations within the established payments ecosystem. Dynamics’ technology and product applications have been enthusiastically validated by several top card issuers, payment networks, and consumer groups, and we believe this will be the most impactful technology company in the payments industry.”

“The 40-year business model cycles at card issuers are turning into 3-year business model cycles,” said Joel Adams, General Partner, Adams Capital Management. “As such, the industry is demanding a fast-cycle payments platform. With this investment, Dynamics will have the first fast-cycle, high-volume consumer electronic manufacturing capability in the payments industry.”

Breakthrough Payment Card Innovations

Numerous payment applications can be realized with the Card 2.0® technology. For example, several top card issuers have recently expanded consumer pilots with Dynamics’ MultiAccount™ card, which enables both debit and credit accounts on a single card. This card has one button if a user wants to use a credit account and another button if a user wants to use a debit account. The electronics embedded in the card then re-writes the programmable magnetic stripe so the card can be used at any existing magnetic stripe reader. One of the first mobile wallets deployed in the US, this card allows debit card issuers to intelligently cross-sell credit products to their debit base – thus increasing purchase volume at retailers.

“Dynamics is deploying a payments platform that re-defines the boundary of consumer electronics design while building out a volume manufacturing capability that would rival the largest consumer electronics companies in the world,” said Jeff Mullen, CEO of Dynamics. “The Dynamics Card 2.0® products will finally give consumers choice at the point-of-sale. And, this is just the beginning. We will continue to introduce exciting new payments products that we’ve been refining in our labs over the last few years.”

About Dynamics Inc.

Dynamics Inc. was founded and seeded in 2007 by Jeff Mullen, its President and CEO. Dynamics produces and manufactures intelligent powered cards such as advanced payment cards. Focused on introducing fast-cycle innovation to top card issuers, the company's first commercial application is the world's first fully card-programmable magnetic stripe for use in next-generation payment cards. The company has won many of the world's most prestigious international business plan competitions, including the Rice Business Plan Competition, Carnegie Mellon McGinnis Venture Competition and the University of San Francisco Business Plan Competition. The company won DEMOgod and the $1M People's Choice Award at DEMO Fall 2010 and Best of Show at FinovateFall 2010. In January, the company won Best in Show at the 2011 International CES for Personal Electronics. Dynamics is headquartered in Pittsburgh, Pa. More information on the company, its technology and applications can be found at www.poweredcards.com.

About Bain Capital Ventures

Bain Capital Ventures is the venture arm within Bain Capital, which has approximately $65 billion of assets under management worldwide. The firm's history of investing in growth stage companies dates back to 1984 with over 125 venture investments since inception. Bain Capital Ventures manages $1.5 billion of assets, has over 70 active portfolio companies, and has offices in Boston, New York, and Palo Alto. The firm has helped steer many ideas to success by working in partnership with management teams, pairing talented and passionate entrepreneurs with industry experts, opening doors to customers, and collaborating on sound long-term strategies. www.baincapitalventures.com

About Adams Capital Management

Adams Capital Management is a national venture capital firm specializing in early-stage investments. More particularly, Adams Capital Management specializes in identifying compelling market opportunities that can be exploited by breakthrough innovations created by discontinuities in markets larger than $500 million in size. Joel Adams founded Adams Capital Management in 1994 and has led its growth to $815 million capital under management.

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Contacts

For Dynamics Inc.
Melinda Jenkins, 650-762-2988
melinda.jenkins@edelman.com

Dynamics MultiAccount(TM) has multiple accounts on one card; press button to rewrite stripe. (Photo: Business Wire)

Dynamics MultiAccount(TM) has multiple accounts on one card; press button to rewrite stripe. (Photo: Business Wire)

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Contacts

For Dynamics Inc.
Melinda Jenkins, 650-762-2988
melinda.jenkins@edelman.com