TrueLayer Raises $ 130 Million with a $ 1B + Valuation as Open Banking Increases as a Viable Option for Card Networks


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Open banking, a disruptive technology that seeks to circumvent the dominance of card networks and other traditional financial rails by allowing banks to open their systems directly to developers (and new services) via APIs, continues to gain traction around the world. of financial services. As a sign of that traction, a startup that plays a central role in open banking applications is announcing a large funding round with a historic valuation.

TrueLayer, which provides technology for developers to enable a range of open banking-based services, currently including payment payments, user account information, and user verification, has raised $ 130 million in a funding round that values ​​the London-based startup at more than $ 1 billion. .

Tiger Global Management is leading the round and, in particular, payments giant Stripe is also participating.

Open banking is a relatively new area in the fintech world – the UK was an early adopter in 2018, then Europe joined in and it looks like we are now seeing more moves than the US You may soon join the party too, and TrueLayer is considered a pioneer in the space.

The vast majority of transactions today are still conducted using card rails or older banking infrastructure, but the opportunity with open banking is to build a completely new infrastructure that works more efficiently and might have less (or none). rate for those who use it. , with the perennial promise of the API: all through a few lines of code.

“We had a vision that finance should be opened up and we are actively working to eliminate the frictions that exist between intermediaries,” said CEO Francesco Simoneschi, who co-founded the company with Luca Martinetti (who is now CTO), at an interview. “We want a financial system that works for everyone, but that has not been the case so far. The opportunity arose five years ago, when open banking became law in the UK and then elsewhere, to go after the most impressive oligopoly: card networks and everything that revolves around them. Now, we can easily say that open banking is becoming a viable alternative to that. “

It seems that the world of finance and commerce is slowly catching on, so financing comes immediately after strong company growth.

The startup says it now has “millions” of consumers conducting open banking transactions enabled by TrueLayer technology, and some 10,000 developers are building services based on open banking standards. TrueLayer has doubled its customer base so far this year, capturing some key customers such as Cazoo to enable open banking-based payments for automobiles; and has processed “billions” of dollars in payments, with a payment volume growing 400% and a payment up to 800%.

The plan is to use the funds to invest in the development of that business, specifically to extend its payment network to more regions (and more banks that are integrated into that network), as well as to attract more clients that use open banking services. for more regular and recurring transactions.

“The shift to alternative payment methods is accelerating with the global growth of online commerce, and we believe that TrueLayer will play a central role in making these payment methods more accessible,” said Alex Cook, partner at Tiger Global, in a statement. “We are excited to partner with Francesco, Luca and the TrueLayer team as they help clients increase conversion and continue to grow the network.”

Notably, Stripe is not a strategic investor in TrueLayer at this time, just a financial one. That is, you have yet to integrate open banking into your own payments infrastructure.

But you can imagine how you would be interested in it as part of the larger mix of options for your clients, and potentially also to build your own independent financial rails that compete well and truly with those provided by card networks (which are so close to it. What Stripe does is that its first web design was based on the physical card, and even its name is a reference to the stripe on the back of the cards.

There are other open banking connectivity providers on the market today (Plaid outside the US is a notable name), but Simoneschi believes that Stripe and TrueLayer are on the same page as the companies.

“We share a deep belief that progress comes through the eyes of developers, so it’s about delivering the tools they need to use,” he said. “U.S they are in a very complementary space “.




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