Thought Machine has raised $83 million in a Series B funding round, according to the company. Thought Machine is a “cloud native core banking tech firm.” The additional capital will help fuel the company’s mission to “transform banking” as it continues to build out its platform while aiding in its ongoing expansion into the Asia Pacific region.
Well known investor Draper Esprit is leading the funding round. Draper Esprit has invested in many Fintechs including Revolut, N26, TransferWise, and Freetrade.
All of Thought Machine’s existing investors; Lloyds Banking Group, IQ Capital, Backed and Playfair Capital, have participated in the round, with IQ Capital contributing £15 million from their new scale-up fund.
Founded in 2014 by entrepreneur and former Google engineer, CEO Paul Taylor, Thought Machine has created “Vault,” a platform that is designed to enable established and challenger banks to “compete in the cloud-native era, and deliver the highest levels of scalability, resilience and security.” Current customers include Lloyds Banking Group, Standard Chartered, SEB and Atom Bank.
Last year, Thought Machine announced a major expansion in the Asia Pacific region with the opening of Thought Machine Singapore. Thought Machine also plans to launch in Australia and Japan. Later in 2020, Thought Machine intends to launch in North America.
Taylor, Chief Executive Officer of Thought Machine, explained that for the past six years, the goal has been to offer banks a next-generation solution to “liberate them from legacy systems that plague the financial services industry.”
Many traditional banks have been slow to update massive IT systems as the task is herculean. Taylor said that his company’s revenues are “very healthy.”
“The customer demand is huge, and this investment allows us to grow rapidly enough to serve all our target markets. As well as international expansion, we will put further investment into our core technology, ensuring that banks will always have the best possible cloud-native platform, and allow them to keep up with technology breakthroughs in the future which bring agility, security, resilience and good economics,” said Taylor.
Vinoth Jayakumar, Investment Director at Draper Esprit, said they are delighted to be partnering with Thought Machine in this phase of their growth.
“Our investments in Revolut and N26 demonstrate how banking is undergoing a once in a generation transformation in the technology it uses and the benefit it confers to the customers of the bank. We continue to invest in our thesis of the technology layer that forms the backbone of banking. Thought Machine stands out by way of the strength of its engineering capability, and is unique in being the only company in the banking technology space that has developed a platform capable of hosting and migrating international Tier 1 banks. This allows innovative banks to expand beyond digital retail propositions to being able to run every function and type of financial transaction in the cloud.”
Max Bautin, Founding Partner of IQ Capital, added that they first backed Thought Machine at seed stage in 2016 and have seen it grow from a startup to a 300-person strong global scaleup with a global customer base and potential to become one of the most valuable European fintech companies.
“I am delighted to continue to support Paul and the team on this journey, with an additional £15m investment from our £100m Growth Fund, aimed at our venture portfolio outperformers.”