Fintech developer platform TrueLayer has just been minted the UK’s newest unicorn after closing a $130m round backed by payment giant Stripe.
The open banking company’s new round was led by new investor Tiger Global Management and gave the startup a post-money valuation of more than $1bn. Tiger Global has previously backed fintech giants like Flipkart, Nubank and Square.
For the uninitiated, open banking refers to the way banks and financial institutions can share their data in a secure way with other companies to provide a better service to customers.
This is usually done through an application programming interface (API), which is essentially a plug-in that allows the data to be shared.
Startups like TrueLayer are driving this new wave of innovation thanks to laws like the EU’s Payments Services Directive (PSD2). The regulations have enabled challenger banks, insurers, compliance solution providers, financial management innovators and a wealth of other startups to access the data as long as customers have given their consent for it to be shared.
How well do you really know your competitors?
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
The growth of open banking startups is also fuelled by younger customers expecting to easily access digital services. As noted in a recent thematic research report from GlobalData, “Generation Z have grown up with and were born into” the era of digital banking.
TrueLayer’s API enables customers to enjoy the benefits of open banking, even if they may not know it. It is plugged into some of the services of the most popular fintechs in Europe; the unicorn’s solution currently powers Freetrade, Revolut and Cazoo’s services.
“TrueLayer is carving a new world of payments altogether, which can deliver a fundamentally faster, safer and more user friendly experience that also improves conversion and delivers higher revenues for merchants,” said Francesco Simoneschi, CEO and co-founder of TrueLayer.
“We are leading this innovation through instant deposits and withdrawals, and merging variable recurring payments and direct debit to build ‘account on file’ services on top of our open banking network. There is an opportunity to rewire the financial system from the ground up and we are leading that evolution through open banking payments.”
TrueLayer will use the new capital influx to further scale the unicorn’s business, offering the
benefits of instant bank payments to more markets and sectors, and delivering continued
product development and innovation, such as the PayDirect solution. It will also be used to continue the firm’s geographic expansion and deepening its engineering, product and commercial teams globally.
Alex Cook, partner at Tiger Global, commented: “The shift to alternative payment methods is accelerating with the global growth of online commerce, and we believe TrueLayer will play a central role in making these payment methods more accessible. We’re excited to partner with Francesco, Luca and the TrueLayer team as they help customers increase conversion and continue to grow the network.”
The news follows from the company having opened its new headquarters in Dublin in August.