Think of the co-founders Daniel Kjellén and Fredrik Hedberg.
LONDON – A new financial movement asking big banks to share their coveted customer data with younger tech competitors has gained significant momentum in 2020.
Called open banking, a number of start-ups developing technologies related to the trend have raised significant sums of money from investors, with US provider Plaid even aiming for a takeover by Visa.
Now a major European player in space has reached a new milestone. The Swedish fintech start-up Tink has raised its valuation in a new investment round to 680 million euros (827 million US dollars), according to people familiar with the matter.
Tink, whose software allows banks and fintech companies to access banking data to create new financial products, raised € 85 million in new funding jointly managed by French private equity firm Eurazeo and UK-based venture capital firm Dawn Capital .
The valuation of the Stockholm-based company is up more than 60% from the 415 million euros it was worth at the beginning of the year, respondents told CNBC, preferring to remain anonymous as the information was not made public.
The new financing complements a EUR 90 million financing round that Tink secured from investors in January. Tink’s supporters range from online payment processing giant PayPal to major European banks like BNP Paribas and ABN Amro.
What is Open Banking?
Tink was founded in 2012 and operates in the so-called “open banking” sector. The aim is to develop innovative financial services through connection with data from large established banks.
Proponents of open banking technology say it will bring greater transparency and competition to the industry, as well as a better banking experience for consumers.
Tink’s open banking platform collects data from thousands of banks and enables developers to create apps that show users their checking accounts and, among other things, make payments from various providers.
“Despite the difficulties this year has been a year of fantastic progress at Tink and, in my opinion, fantastic progress in open banking in general,” Daniel Kjellén, co-founder and CEO of Tink, told CNBC in an interview.
“We continued to grow strongly organically, but also carried out mergers and acquisitions across Europe for the first time to complement our platform.”
Tink agreed to acquire three companies earlier this year – Sweden’s Instantor, Spain’s Eurobits and UK OpenWrks – to further expand into new European territories and strengthen its platform.
Tink, like others in the field, is trying to leverage the new tech-friendly banking rules in the UK and European Union that require banks to open their account information and allow regulated third-party companies to make bank transfers on their behalf. when they have the approval of customers.
In theory, these rules shouldn’t conflict with the tough new data protection laws of the GDPR in Europe, which aim to put consumers in control of their personal data collected by businesses and face heavy fines for violations.
The company’s direct competitors include the American company Plaid, whose deal to be acquired by Visa is at risk due to a US antitrust lawsuit and its British rivals TrueLayer, Yapily and Bud.
Kjellén said the company will use the fresh money to invest more in the payments side of its business.
“The area where we’re likely seeing the strongest growth right now is in payments,” he said, adding that the company now handles 1 million transactions every month.
Tink now has annual recurring revenue of € 30 million, Kjellén told CNBC, an important metric for investors to gauge the growth of the business. As the use of the platform increases, the company earns more money with its partners.
Tink will also be using cash from the deal to encourage the hiring. The company now has 365 employees, compared to 150 in the previous year.