British fintech start-up TrueLayer raises $70 million to take on Visa and Mastercard

LONDON — British monetary expertise start-up TrueLayer says it is raised $70 million in recent funding, highlighting continued urge for food from buyers for fast-growing fintech corporations.

TrueLayer lets fintech apps like Revolut and Freetrade join with prospects’ financial institution accounts utilizing expertise often known as APIs, or utility programming interfaces. This means customers of these apps can then make funds from their financial institution or view balances and transactions from totally different accounts.

The firm mentioned its newest funding spherical was led by Addition, the enterprise capital agency based by former Tiger Global accomplice Lee Fixel. Existing buyers Anthemis Group, Connect Ventures, Mouro Capital, Northzone and Singapore’s Temasek additionally invested.

Francesco Simoneschi, TrueLayer’s CEO and co-founder, mentioned in an interview that the agency determined to elevate additional cash on the again of sturdy progress in 2020, helped in no small half by the coronavirus pandemic and a shift from customers towards digital technique of managing their funds.

“We had been closing 2020 in a particularly optimistic manner,” Simoneschi informed CNBC. “We had been going by means of an unbelievable yr of progress,” he mentioned, including the corporate noticed its cost volumes spike as a lot as 600 occasions.

TrueLayer declined to share its financials or valuation. The firm, which additionally counts Chinese web large Tencent as a shareholder, has now raised $142 million in funding to date.

TrueLayer mentioned it should use the recent money to broaden its companies internationally, constructing out its presence in Europe first earlier than concentrating on a rollout in Australia. It’s additionally exploring whether or not to launch in Brazil additional down the road.

The information comes a day after Silicon Valley agency Plaid — which competes with TrueLayer in Europe — introduced it had raised $425 million in a brand new funding, valuing the corporate at $13.four billion. Plaid had initially agreed to be acquired by Visa final yr for $5.three billion, however scrapped the deal after the U.S. authorities raised antitrust considerations.

Plaid and TrueLayer are a part of a brand new motion in finance known as “open banking,” which goals to open up valuable banking knowledge and cost companies to fintech corporations and different authorised third events, offered they have consent from prospects. Other gamers within the area embody Sweden’s Tink and Britain’s Bud. They’re profiting from tech-friendly new rules within the U.Ok. and European Union, often known as PSD2.

TrueLayer and another corporations at the moment are wanting to undercut card networks like Visa and Mastercard, by permitting fintech apps to provoke financial institution transfers on behalf of their customers, at a lot decrease charges. GoCardless, a fintech platform that processes direct debit funds, is also developing open banking technology for transactions.

“Open banking could be a actual contender to the normal card networks,” Simoneschi mentioned. “The query is, can the cardboard corporations embrace this alteration, or will they resist?”

It’s value noting Visa remains to be an investor in Plaid, as well as TrueLayer, that means it may benefit long run from the rise of open banking companies. Meanwhile, Mastercard final yr bought Finicity, one other participant within the area.

Fintech has attracted billions of {dollars} in enterprise capital as buyers intention to capitalize on wild progress within the sector. Globally, enterprise capitalists pumped over $17 billion into fintechs within the first quarter of 2021, in accordance to knowledge from PitchBook, up 44% from the identical interval a yr earlier and the very best quarterly quantity for the reason that second quarter of 2018. Meanwhile, tech corporations like PayPal and Square have seen their market values surpass that of Wall Street titans like Goldman Sachs.

Still, the sector’s meteoric progress has rattled some leaders within the banking world. JPMorgan CEO Jamie Dimon not too long ago mentioned banks ought to be “scared s—less” of fintechs, and accused Plaid of “unfair competitors” and “improperly” utilizing banking knowledge. Plaid, which counts JPMorgan as a shopper, mentioned that “knowledge privateness and safety are core to the whole lot we do, together with the info change agreements we now have with JPMorgan Chase amongst many different banks.”