Challenger banks, incumbent banks, and many businesses that are encroaching into any type of banking service all have something: when it comes to launching new products such as credit lines or deposits or current account services, So in the days many of them are claiming not to build from the ground, but rather using third party technology to power these services. Today, one of the big players providing that technology has announced a major round of funding to expand its business, underscoring the growth in this market.
Mambu, a Berlin-based startup that describes itself as the SaaS banking platform – which provides lending, deposits and other banking products, to provide APIs, technology to banks and power to others – has raised € 100 Million (about $ 122 million) has closed the round) (at today’s rates), funded CEO and co-founder Eugene Denilakis said it would use to expand deeper into the 50 markets where it was already active , As well as focusing more on specific regions such as South America and Asia. (And for those watching the “Bay Area is Dead?” Story, it’s one of several tech companies with their US offices set up in Miami.)
It is witnessing a 100% year-on-year growth, but remarkably, Mambu covered 50 markets, when it last raised money, € 30 million in 2019, so you could argue that this front But there is some investment and expansion.
The funding gives Memu money of € 1.7 billion (just over $ 2 billion at today’s rates), the company has confirmed.
The round is being led by TCV, with Tiger Global and Arena Holdings as well as past investors Bessemer Venture Partners, Runa Capital and Acton Capital Partners taking part. TCV, known for betting big growth rounds (it supports the likes of Netflix, Facebook and Spotify), also made a name for itself by withdrawing some of the biggest names in European fintech and e-commerce. Is excavating, with recent investments with Reverse, Spryker, Mollie and Relex.
The market that Mambu is coming up with is a huge opportunity for a new wave of banking and financial services that taps into the growth of smartphone and web usage.
Long gone are the days where people have to go to physical banks to withdraw or deposit money, or fill out loan applications and meet with appraisers who eventually decide whether you or your business will get the money. . In fact, many of those brick-and-mortar locations still do not exist. In their place are apps, websites and on-demand services, where people live online wherever they are spending time and money.
According to Danilkis, Mambo’s platform currently covers about 7,000 different banking products. These are broadly divided into three primary categories: lending, current accounts and deposit accounts, but the sheer number of products really just tells you how many ways and forms of banking services are offered to you. (Take credit for example: You can get it from a variety of cards, point-of-sale pay-later products, direct loans, and so on.)
Gartner’s estimates (cited by Mambo) show the banking software market growing at more than $ 100 billion and in double digits, and Mambo’s client list reveals the extent to which companies these days for a piece of that action Dying: It includes the likes of Challenger. M26u said banks like the N26 and OakNorth, but also big incurable banks like Santander and ABN Amro and telecom carriers like Orange, which would cover about 20 million customers and some $ 12 billion. Huh.
And in fact, the big opportunity also means that companies like Mambu have a large and growing list of competitors: they include new companies like Rapid and Unite, as well as Thought Machine, which made a big round last year. raised; Tenceno and Adera of Italy. It will be interesting to see how SaaS disrupts new entrants into the banking-platform space, effectively, becoming unaffiliated in itself: Mambo is now 10 years old (it was founded in 2011). This can also lead to consolidation.
Coming back to that client list, I can understand the logic of a company not really in the financial services business like Telco, or a neo-bank taking an API-based service for power banking – it instead Focuses on building clever algorithms to run those services, and faster interfaces to make them easier to use – it was also interesting for me to see the big banks on that list. It turns out that the reason is that banks are against it in another way.
“Yes, banks have functionality and capacity, but launching something new is often a matter of speed and cost,” Danilakis said. “Banks may have a generation-2 system, but many will be very old. And changing how a financial product behaves is very difficult and extremely risky because even a small change can cause problems. And those systems are not designed to work with APIs, so it is extremely difficult if it is not impossible to connect to other systems, never mind in real time. It becomes impossible or impractical to make some solutions or offerings themselves. “
John Doran, TCV partner, is joining Mambu’s board with this round, and while the company may be seen as an incumbent for some, its early proponent not only helped it gain market share Has, rather, the power for players to remain standing for investors.
“Mambu was one of the first companies to take advantage of the opportunity to move banking software to the cloud,” he said in a statement. “The team has built a multi-billion dollar, high-performance, truly cloud-native product in a rapidly growing market traditionally dominated by large, slow-moving major vendors. We have been following Mambo’s progress over the years and are really happy to partner with Eugene and the entire Mambo team on their journey to expand their offerings to customers around the world. “