Platforms enabling open banking, where previously separate services are now connected through APIs, have become a significant trend in recent years. Today, a leading European company in this area has secured funding to further develop its operations.

Tink, a Stockholm, Sweden-based startup that consolidates numerous banks and financial institutions via an API for access through new channels, has obtained €85 million (equivalent to $103 million at the current exchange rate). This investment values the company at €680 million (approximately $825 million). The capital will be allocated to strengthening its network of banks and payment services throughout Europe. Tink currently connects 3,400 banks, serving around 250 million individuals, and collaborates with partners such as PayPal, NatWest, ABN AMRO, BNP Paribas, Nordea and SEB, with some also acting as strategic investors. The company also supports a community of approximately 8,000 developers utilizing its APIs.

This latest funding round is jointly led by new investor Eurazeo Growth and Dawn Capital, with participation from PayPal Ventures, HMI Capital, Heartcore, ABN AMRO Ventures, Poste Italiane and Opera Tech Ventures, the venture arm of BNP Paribas.

This investment follows a previous round of €90 million ($105 million) announced in January 2020, and represents an extension of that funding. The prior round established a valuation of €415 million ($503 million), and the company has experienced considerable growth since then, reporting 2,500 banking partners in its network as of January. To date, Tink has raised a total of €175 million.

The past year – marked by a global health crisis – has seen an acceleration in the shift of services online and to the cloud, enabling individuals and businesses to continue activities like banking and commerce despite in-person limitations. This trend has been particularly pronounced in the financial services sector, with banks, competitors, and technology partners experiencing increased demand for more adaptable, digital solutions.

“Despite the challenges presented by 2020, it proved to be a year of substantial growth for Tink,” stated Daniel Kjellén, co-founder and CEO of Tink. “2020 witnessed the emergence of open banking-powered payments, and we anticipate significant expansion in 2021 – notably in the UK, followed by the rest of Europe. This funding extension will facilitate the continued development of our payment initiation services across Europe, while simultaneously delivering innovative data-driven products built on open banking technology to our clientele.”

Tink is not alone in seeking to leverage this opportunity. Earlier this week, Unit, another startup, emerged from stealth mode with $18.6 million in funding, also aiming to provide a means of integrating banking features and institutions into new environments. Other companies working to connect and integrate financial services into various platforms and applications include Plaid and Rapyd.

Plaid is currently undergoing acquisition by Visa for $5.3 billion, although the deal is presently subject to antitrust review. Rapyd remains venture capital-backed and was last valued at $1.3 billion. The emergence and expansion of these companies suggest a competitive market, challenging the notion that Plaid holds a dominant position, although acquisition by a major payments provider could influence market dynamics.

“The open banking movement is gaining momentum, and 2021 is expected to bring increased collaboration between fintech companies and established enterprises seeking to deliver digitally-enabled services to their customers with a reliable partner,” commented Zoé Fabian, MD of Eurazeo Growth. “Since its founding eight years ago, Tink has established itself as the leading open banking platform in Europe, and our investment reflects the confidence we and the industry have in Tink and the future of open banking. We are eager to support their continued progress.”

Tink’s core business revolves around payment initiation technology, offering seamless integration with existing banking services and earning a commission on subsequent transactions. The company currently processes approximately 1 million payment transactions monthly across five markets.

While the transaction volume and the company’s revenue are not disclosed, Tink notes that its current customers include Kivra, a digital mailbox service with 4 million adult users in Sweden, and Lydia, a payment fintech with over 5 million customers, as of earlier this year. The company operates in Sweden, the U.K., France, Spain, Germany, Italy, Portugal, Denmark, Finland, Norway, Belgium, Austria and the Netherlands, with plans to expand into 10 additional markets in 2021.

In addition to expanding partnerships and its geographic reach, Tink is also pursuing growth through acquisitions. This year, the company completed three acquisitions to broaden its capabilities – a demonstration of the likely consolidation trend in the market, as not all companies can achieve the scale and funding necessary for sustained growth. Tink’s acquisitions included Swedish credit decisioning firm Instantor, to enhance its credit risk products; Spanish account aggregation provider Eurobits; and U.K. aggregation platform OpenWrks.

“Tink has firmly established itself as Europe’s premier open banking platform and is rapidly becoming a vital component of financial technology infrastructure,” said Josh Bell, general partner of Dawn. “We have observed a significant acceleration of activity across Tink’s network this year, with increasing adoption and implementation of open banking products and services. We are pleased to support Tink’s latest funding round and look forward to collaborating with the team throughout 2021 to expand the breadth and depth of its extensive network of banks, accelerate the deployment of its account-to-account payment initiation solutions, and continue to deliver exceptional value to its growing customer base.”