10x, a UK fintech, is raising $ 187 million to build new services for old banks – TechCrunch
As so-called neobanks, with their more modern interpretations of banking and other financial services, become more and more important, a startup developing technology to help established players survive the competition has announced a major round of funding.
10x Future Technologies, a London-based fintech helping larger, established banks develop both next-generation services and tools to make their legacy services more efficient, has raised $ 187 million. We know from sources close to the company that the 10x valuation with this round is in the range of $ 700 million.
(The amount raised and rating also roughly matches the numbers from Sky News, which reported earlier this month that 10x raised new funds.)
10x will use the funds both to expand into new regions such as North America and to continue building additional technologies for its flagship platform. SuperCore, as this platform is called, is an all-in-one system designed from the ground up to run a wide range of banking services such as payments, core banking, mortgages, analytics, security and marketing that the banking customers of Can use 10x in their existing technology via APIs or 10x to create new services for these customers from scratch.
This Series C round is full of heavy hitters expressing the credibility that has gained 10x in its five years in the market.
It is jointly managed by BlackRock and the Canada Pension Plan Investment Board (CPP Investments) and also includes existing Australian investors JPMorgan Chase, Nationwide, Ping An and Westpac.
The latter four include strategic backers: Antony Jenkins, the founder and CEO of 10x, who himself previously worked at major banks (his most recent role was CEO of Barclays, and although he went under a cloud, his notoriety and track record are likely Reasons behind the company’s clout) tells us 10x is currently building services for Westpac and Nationwide.
10x has two other banks as customers that are not yet known, which will lead to more shortly, Jenkins added, as the industry is currently “in a transition moment.” Some of 10x’s engagements are already live, with “volume going through the platform,” he said. Others have yet to start.
The chance targeted 10x is great, but also elusive.
Neobanks and other fintech providers of the new generation are slowly dismantling the stronghold of the established banks in private and commercial banking. As a rule, they do this not by becoming full-fledged banks themselves, but rather by combining suites of traditional and more modern banking services via APIs from other fintechs. machine learning algorithms for personalizing services for customers; and modern interfaces to make the entire experience more user-friendly than a traditional bank.
The established banks want to assert themselves against these start-ups with their own competing products, but in many cases cannot: their infrastructure is too old and the corporate culture is often even older.
This is where 10x comes in, providing the tools and advice to help you get new services up and running.
Jenkins notes that a lot of the engagements 10x is currently seeing is for banks to offer entirely new services rather than building services to replace those already on offer. A fitting analogy here is that it’s a bit like adding a modern extension to a very old house, rather than remodeling and modernizing the entire old house from scratch.
But it seems that now, five years in the life of 10x as a company, we are seeing the first signs of banks willing to investigate how to migrate their core data to more modern systems to make it more extensible and usable in a wider area to make new services and 10x believes that it can also be a partner in this back end transformation.
“The problems faced by the banks lie in the legacy systems because they are all focused on the product and not the customer,” he said. “But we believe the industry is now ready to start thinking about the migration process.” The company is not yet working on projects like this, he added, but it expects to do so in the next 12 months.
And even with other fintech startups, such as FintechOS, which also provide services to help established banks become more modern, this expectation offers opportunities for investors.
“We were impressed with 10x’s strategy and ambition to play a key role in the fundamental changes in financial services driven by technological innovation, consumer expectations and regulatory reform,” said William Abecassis, Head of Innovation Capital at BlackRock Explanation . “We look forward to investing in the business as it scales into new markets.”
Leon Pedersen, MD and Head of Thematic Investing, CPP Investments added, “10x is very well positioned to transform the way big banks are built and serve their customers. 10x offers an attractive opportunity for a long-term investor like CPP Investments as we believe they will benefit from their involvement in the structural growth trend of financial institutions investing in digital initiatives and renewing the core technology infrastructure, allowing banks to bring new offerings and products a lot introduce faster than the use of legacy platforms. “