Finance

City fintech TrueLayer gains unicorn status in $130m funding round

TrueLayer, an open banking startup which provides financial data to Revolut, Cazoo and Nutmeg, is now valued at more than $1bn after closing a $130m funding round.

Coinbase and Square backer Tiger Global led the round, which also included investment from payments firm Stripe. The raise was TrueLayer’s second funding injection this year, after it landed $70m from star dealmaker Lee Fixel’s Addition fund in April.

The Shoreditch-based fintech firm said it plans to use the funding to capitalise on mainstream adoption of open banking, a global regulatory concept which facilitates the public sharing of data and account information that banks hold on their customers.

“When we started, open banking was just a purely theoretical regulation and everybody was very negative,” TrueLayer chief executive Francesco Simoneschi told Financial News in an interview. “Banks now have a very high appetite [for open banking data]… They understand that this is not just a fad, this is here to stay.”

READ City fintech startup TrueLayer raises $70m from Coinbase exec, Lee Fixel’s Addition

Simoneschi said TrueLayer is now the largest player in the UK for open banking, having processed billions in payments so far this year and accounted for the majority of open banking traffic in the UK, Ireland and Spain.

The firm reported a 400% growth in monthly payment volume and an 800% growth in monthly payment value in September, as it expanded across Europe and doubled its customer base.

The investment comes as open banking sits in a state of flux in the UK, after banks, fintech firms and regulators spent years laying the groundwork for adoption.

The government is currently consulting on whether to evolve the Open Banking Implementation Entity, the regulations’ designated oversight body, into a new organisation, or to bring the rules under the purview of an established watchdog.

“You want to have real collaboration to keep open banking regulation and schedules moving forward, so it’s not just about the banks or fintechs or users,” said Simoneschi. “We all have to come together and be represented as such — to make sure that there is healthy governance behind it, whether it slots into a new body or gets embedded into another one.”

As open banking becomes commonplace in the UK and Europe, others have swooped in to capitalise on the data sharing between banks. Simoneschi said TrueLayer plans to “multiply” its UK headcount in the coming months, while its US rival Plaid is set to double its workforce in the City before the end of 2021.

READ Why London beats Wall Street in fintech dominance, says ex-Amazon lending boss

TrueLayer recently gained full EU authorisation as a payments institution using its Dublin office as a European headquarters, with offices also spread across Italy, Hong Kong and Australia.

After bringing on board two major US investors in this latest round, Simoneschi said the firm was paying close attention to “incredibly good news” from regulators on open banking developments across the Atlantic.

“We need to optimise for what will happen in the next 10 years,” he said. “This is clearly an extremely important country and very strategic on the global scene. We’re following very closely all the evolutions in open banking in the US and North America… I think the new administration is putting even further pressure on open banking acceleration.”

To contact the author of this story with feedback or news, email Emily Nicolle

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