Mambu Raises $266M at $5.5B Valuation for Embedded Finance APIs

The Rise of Embedded Finance and Mambu's New Funding

Embedded finance – the integration of financial tools via APIs, eliminating the need for companies to build these services independently – has become a defining trend in the fintech sector over the past ten years. A leading startup in this space, focused on providing these essential APIs and underlying technology, has just announced a significant funding injection to accelerate its growth.

Mambu Secures €235 Million in Series E Funding

Mambu, a provider of APIs for lending, deposits, and a comprehensive suite of financial services analytics, has successfully raised €235 million in a Series E funding round. This new investment values the company at €4.9 billion, equivalent to approximately $266 million at a $5.5 billion valuation based on current exchange rates.

EQT Growth, a European private equity firm, spearheaded the funding initiative. While Mambu, headquartered in Amsterdam and London, has not disclosed all participating investors, its previous round in January – led by TCV – included contributions from Tiger Global, Arena Holdings, Bessemer Venture Partners, Runa Capital, and Acton Capital Partners. The company’s valuation has more than doubled since that time.

Expanding Customer Base and Market Reach

Currently, Mambu serves over 200 customers, collectively reaching approximately 53 million users across 65 countries. Its clientele includes prominent neobanks such as N26, as well as established financial institutions like Raiffeisen Bank, BancoEstado, and ABN Amro.

Mambu’s influence extends to newer financial service providers, including telecommunications companies and e-commerce businesses. These entities, lacking the resources or inclination to develop financial services in-house, can leverage Mambu’s building blocks to offer tailored solutions to their customers, expanding Mambu’s potential customer base.

A Vision for the Future of Financial Services

Eugene Danilkis, Mambu’s co-founder and CEO, articulates a bold vision for the company’s role in the financial landscape.

“Our vision is to replicate in financial services and banking the impact Salesforce had on CRM,” he stated.

Interestingly, Salesforce itself is now viewed as a partner rather than a competitor. Mambu’s strength lies not only in its financial services APIs but also in its ability to seamlessly integrate these services with existing IT infrastructure and applications. Alongside Salesforce, Mambu maintains integrations with AWS, Google, Marqeta, Comply Advantage, Deloitte, and numerous other third-party providers. The company now processes around 130 million API calls daily.

Strategic Expansion and Future Innovations

Despite already possessing substantial capital, Mambu intends to utilize this new funding to expand its market presence and explore adjacent areas for innovation. Insurance is a key area of interest, though specific launch timelines and service details remain undisclosed. A logical extension could be property insurance, given Mambu’s existing mortgage APIs and involvement in property finance.

Danilkis emphasizes the company’s commitment to enhancing its existing financial services and building blocks. He prefers the term “SaaS banking platform” to “embedded finance,” highlighting Mambu’s fundamental role in empowering customers to create customized financial services.

Addressing the Needs of Modern Financial Institutions

“Most banks and fintechs are focused on high-volume products that require digital efficiency while still delivering a personalized experience,” Danilkis explained. “Our scope extends beyond lending and deposits.” Mambu aims to facilitate the development of “more complex commercial products with lower volumes but higher values.” The company also recognizes ongoing challenges related to integrations and middleware within financial services, areas where it plans to provide improved technological solutions.

The focus is on “improving integration within the ecosystem,” which will involve creating more pre-built integrations for third-party solutions. “We’re investing in bringing a lot of that ecosystem together,” he added.

Potential for Consolidation and Competition

While Mambu has historically focused on organic growth, the possibility of acquisitions is now being considered. The market is ripe for consolidation, with several direct competitors, including Thought Machine, Rapyd, and Airwallex, all well-funded. Thought Machine recently raised $200 million, Rapyd has secured over $800 million, and Airwallex is valued at $4 billion.

Numerous smaller regional players and specialized “point solutions” also operate within the cloud-based financial services infrastructure landscape.

EQT Growth's Investment Rationale

EQT had previously engaged with Mambu prior to the last funding round but is now making its first investment in this Series E.

“We have been following Mambu’s journey and stellar execution for several years now,” stated Carolina Brochado, a partner within EQT Growth’s Advisory Team. “We strongly align with Mambu’s values of responsibility and sustainability and believe its solution is increasing financial accessibility and affordability for millions globally. We are excited to partner with a leading fintech company and management team in Europe, offering a unique and leading modern cloud platform to address the substantial €100 billion market currently served by traditional banking software vendors and in-house solutions.” Brochado will join the board of directors as part of this investment.