Truelayer Secures $70M Funding for Open Banking Platform

TrueLayer Secures $70 Million in Series D Funding

TrueLayer, a London-based startup providing a developer-focused platform for leveraging open banking, has announced a new funding round of $70 million.

This Series D investment is spearheaded by Addition, a new investor. Existing backers, including Anthemis Group, Connect Ventures, Mouro Capital, Northzone, and Temasek, also contributed to the round.

Investment Details and Expansion Plans

With this latest funding, TrueLayer’s total investment to date reaches $142 million. The capital injection will primarily fuel the continued expansion of its open banking network.

This network integrates payments, financial data, and identity verification, empowering businesses to develop innovative products that enhance online spending, saving, and transaction processes.

Further development of advanced open banking-based services is also planned. These services will extend beyond basic API access, fostering greater innovation within the financial sector, particularly in embedded finance and broader payment solutions.

To support this growth and increasing demand, TrueLayer is actively expanding its engineering, product, and commercial teams.

Over the past year, the fintech company has broadened its service availability across 12 European markets.

The Rise of Open Banking Payments

Francesco Simoneschi, CEO and co-founder of TrueLayer, suggests that payments are emerging as the key application of open banking.

A core component of open banking is payment initiation. This allows authorized third parties to initiate money transfers from a user’s bank account, offering an alternative to traditional card payments.

Card payments were not originally designed for the complexities of online transactions.

“We anticipate open banking payments will become the standard online payment method within the next five years,” states Simoneschi.

“Open banking is inherently digital and mobile-optimized, facilitating transactions at a significantly lower cost, with enhanced security and convenience, and a superior user experience.”

Addressing the Limitations of Existing Payment Methods

Recent shifts towards digital channels for managing daily life have highlighted the shortcomings of current payment systems.

“The fundamental issue lies with cards, which were not initially intended for online use and have been adapted to fit current online payment processes,” explains the TrueLayer CEO.

Solutions like Google Pay or Apple Pay offer temporary improvements but do not address the underlying problems.

Rapid Growth and Adoption

TrueLayer has experienced substantial growth in the utilization of its payments API, driven by increasing consumer adoption of instant bank payments.

Transaction volumes have increased by a factor of 600 over the last year, with companies like Revolut, Trading 212, Freetrade, and Nutmeg integrating open banking payments.

“We observe that approximately one in three customers opt for the open banking payment option after their initial experience,” Simoneschi notes.

For some clients, open banking now accounts for nearly 70% of their customers’ preferred payment method.

Benefits for Customers and Merchants

Customers benefit from the convenience of not needing to remember card details, instead authenticating securely with biometric methods like facial or fingerprint recognition.

Stored payment information remains valid even if a card is lost, stolen, or expires.

Merchants also gain advantages from offering open banking payments.

“These payments typically demonstrate a 20% higher conversion rate compared to cards – and up to 40% with our optimized flows – and boast success rates exceeding 95%,” adds Simoneschi.

This translates to significant recovered revenue, potentially reaching millions or hundreds of millions annually.