British fintech trainer TrueLayer raises $ 70 million

LONDON – The UK’s financial technology training firm TrueLayer says it has raised $ 70 million in new financing, highlighting investors’ continued appetite for fast-growing fintech companies.

With TrueLayer, fintech applications such as Revolut and Freetrade can connect to customers’ bank accounts using technologies known as APIs, or application programming interfaces. This means that users of the programs can then make payments from their bank or view balances and transactions from different accounts.

The company said its latest round of investment was led by Addition, the venture capital firm founded by former Tiger Global partner Lee Fixel. Existing investors Anthemis Group, Connect Ventures, Mouro Capital, Northzone and Temasek in Singapore also invested.

Francesco Simoneschi, CEO and co-founder of TrueLayer, said in an interview that the company decided to raise more cash due to strong growth in 2020, which was not only helped by the coronavirus pandemic and a shifting consumers to digital ways of managing. their finances.

“We ended 2020 in an extremely positive way,” Simoneschi told CNBC. “We’ve had an incredible year of growth,” he said, adding that the company has increased its payment volumes as many as 600 times.

TrueLayer did not want to share its financial or valuation. The company, which also counts Chinese internet giant Tencent as a shareholder, has raised $ 142 million in funding so far.

TrueLayer has said it will use the new cash to expand its services internationally, expanding its presence in Europe before launching a rollout in Australia. It is also investigating whether it will start further in Brazil.

The news comes a day after the Silicon Valley Farm, which competes with TrueLayer in Europe, announced that it had raised $ 425 million in a new investment and valued the company at $ 13.4 billion. Plaid initially agreed to buy $ 5.3 billion through Visa last year, but scrapped the deal after the U.S. government raised antitrust issues.

Plaid and TrueLayer are part of a new finance movement called ‘open banking’, which aims to open up valuable banking data and payment services for fintech companies and other approved third parties, provided they have customer consent. Other players in the space include the Swedish Tink and the British Bud. They take advantage of technological new rules in the United Kingdom and the European Union, known as PSD2.

TrueLayer and other companies now want to undermine card networks such as Visa and Mastercard, by allowing fintech programs to initiate bank transfers on behalf of their users at much lower fees. GoCardless, a fintech platform that processes direct debit payments, also develops open banking technology for transactions.

“Public banking can be a real contender for traditional card networks,” Simoneschi said. “The question is whether the card companies can accept this change, or will they resist?”

It is noteworthy that Visa is still an investor in Plaid, as well as TrueLayer, which means that it can benefit in the long run from the rise of public banking services. Meanwhile, Mastercard last year bought Finicity, another player in the space.

Plaid plans to more than double its European workforce from 40 to 100 employees by 2021.

“I think competition is good and benefits the ecosystem,” Keith Grose, head of International, told CNBC. He added that the firm has ‘good competitors’, but that its competitors do not offer a ‘transatlantic bridge’ that it has built in the United States and Europe.

TrueLayer has its own plans to give its team a boost. The company currently employs 200 people and plans to increase the number of people this year by another 50 employees, Simoneschi said.

Fintech has attracted billions of dollars in venture capital because investors want to take advantage of the wild growth in the sector. Globally, venture capitalists, according to PitchBook data, pumped more than $ 17 billion into fintechs in the first quarter of 2021, up 44% from a year earlier and the highest quarterly amount since the second quarter of 2018. Meanwhile, technological companies like PayPal and Square have seen their market value surpass that of Wall Street titans like Goldman Sachs.

Yet the sector’s meteoric growth has toppled some leaders in the banking world. JPMorgan CEO Jamie Dimon recently said banks should be ‘afraid’ of fintechs, accusing Plaid of ‘unfair competition’ and ‘improper’ using banking data. Plaid, which counts JPMorgan as a customer, said that “privacy and data security are at the heart of everything we do, including the data exchange agreements we have with JPMorgan Chase among many other banks.”