Thought Machine Locks in $42 Million in Funding

Cloud banking technology provider Thought Machine has secured another $42 million in funding, boosting its Series B round to a total of $125 million after picking up an $83 million investment this spring. The new infusion of capital was led by Eurazeo Growth and featured participation from new investors British Patient Capital and SEB.

The investment will help the company to continue its international expansion – including the addition of new hires in the APAC region, the U.S., and in Australia. The company also plans to use the funding to fuel development of new products and functionalities, including a new payments solution.

“The prospect of transitioning to cloud native technology is now at the forefront of every major bank’s roadmap,” ThoughtMachine CEO Paul Taylor said. “Plans have been hastened in the wake of regulatory pressure, economic uncertainty, and the need to manage cost-income ratios.”

Thought Machine’s signature offering, Vault, is a modern, cloud-native core banking system designed for financial institutions burdened with legacy technology. Demonstrated at the company’s Finovate debut at FinovateEurope in 2018, Vault provides a secure, fast, and reliable end-to-end banking system that manages users, accounts, savings, loans, mortgages, smart contracts, and other financial products and services. By leveraging APIs and a microservice architecture, Vault is able to provide financial institutions with all the functionality necessary for bank operations. Currently geared toward retail and small business banking, the company plans to add both commercial banking and private wealth services “in the future.”

Named to the Tech Nation Future Fifty in March, and joining the Mastercard Start Path Programme in May, Thought Machine announced in June that its Vault platform was compatible with all major cloud infrastructure providers including Google Cloud Platform, Amazon Web Services, Microsoft Azure, and IBM Cloud. Founded in 2014 and headquartered in London, Thought Machine includes Atom Bank and Lloyds Banking Group among its partners.

Thought Machine Locks in $83 Million in Growth Funding

Photo by Aphiwat chuangchoem from Pexels

U.K.-based, cloud native, core banking technology provider Thought Machine has just secured Series B funding that will help the U.K.-based company expand into the Asia-Pacific. The $83 million raised this week, courtesy of a round featuring all of the company’s existing investors, takes the firm’s total capital to more than $106 million.

Valued at $143 million at the time of its Series A round in 2014, Thought Machine is currently believed to be worth between $220 million and $320 million.

Thought Machine founder and CEO Paul Taylor said that the funding had arrived at a “pivotal stage” in the company’s development, citing both “healthy” revenues and “huge” customer demand. “As well as international expansion we will put further investment into our core technology,” Taylor said, “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.”

An alum of European fintech conference, the company demonstrated its core banking solution, Vault, at FinovateEurope 2018 . With this technology, Thought Machine enables both incumbent and challenger banks to operate and compete with a cloud-based offering of their own. Vault offers institutions checking and savings accounts, well as credit cards, loans, and mortgage financing.

Last fall Thought Machine announced a partnership with Standard Chartered’s new digital bank in Hong Kong, and unveiled a new collaboration with Swedish financial group, SEB. Both deals will feature deployment of Thought Machine’s Vault platform.

After expansion to Australia and Japan, Thought Machine plans to go live in the United States later this year.

Thought Machine Helps Standard Chartered Launch Digital Bank in Hong Kong

Standard Chartered has selected Thought Machine to provide core banking capabilities for its new digital bank launching in Hong Kong, reports Alex Hamilton of Fintech Futures (Finovate’s sister publication).

The new venture, for which Standard Chartered received a virtual banking license from the Hong Kong Monetary Authority (HKMA), will be unveiled later this year.

According to Deniz Güven, CEO of the as-yet unnamed bank, the selection of the right vendors was a crucial part of building out the bank’s capabilities.

He told FinTech Magazine that Thought Machine would be used as the bank’s “powerful product engine.”

The virtual bank is also using payments processor Paymentology, deploying Netsuite from Oracle and working with FICO to build out its credit business.

According to a May blog post from Güven, it has gone from a core team of ten people to more than 100 members of staff.

“We saw our chance to build a bank with a totally new operating model: new, cloud-based technology from the ground up,” wrote the CEO at the time, “a new way of onboarding clients, new anti-money laundering and fraud systems designed from the client’s viewpoint.”

Thought Machine demonstrated its core banking technology, Vault, at FinovateEurope 2018. Headquartered in London, U.K., and founded in 2014, Thought Machine has raised more than $23 million (£18 million) in funding, and includes Lloyds Banking Group and Backed VC among its investors.

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Thought Machine Teams Up with Sweden’s SEB

SEB, the Swedish financial group, has partnered with core banking firm Thought Machine in a project which will see the former deploy a new banking platform in its innovation studio, SEBx, reports Alex Hamilton of Fintech Futures (Finovate’s sister publication).

SEBx is implementing Vault, Thought Machine’s flagship cloud-hosted core banking system.

According to Nicholas Moch, group CIO of SEB, the innovation studio has a “clear mandate for exploring tech to create next generation customer offerings.”

“Having the opportunity to build a bank from the ground up within SEBx, we are determined to work with partners that bring new perspectives to a traditional industry, and the team at Thought Machine does that,” Moch said.

SEB launched its innovation studio in July, and describes it as an initiative for testing new technologies, alternative technology platforms and new services. The studio currently employs 16 people.

The bank’s CEO, Johan Torgeby, told Swedish media at the time that SEBx could become a separate company in the future.

Paul Taylor, CEO and founder of Thought Machine, said of the project: “SEB is one of the most innovative banks in Europe, and it is significant that they have decided to deploy Vault as part of their technology exploration.”

SEB’s activities mainly comprise retail and corporate banking, but it also dabbles in life insurance and pensions. Founded in 1972, it operates subsidiaries in Denmark, Estonia, Germany, Latvia, Lithuania, Ukraine and Russia.

Thought Machine demonstrated its core banking solution, Vault, at FinovateEurope 2018. Founded in 2014 and headquartered in London, U.K., the company has raised $22 million (£18 million) in funding from investors including Lloyds Banking Group, Backed VC, and IQ Capital.

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Thought Machine Announces Strategic Partnership with Lloyds Banking Group

Lloyds Banking Group has taken a 10% stake in core banking technology provider Thought Machine. The investment of $14.4 million (£11 million) represents the lion’s share of the company’s $23.6 million Series A round (£18 million) and is part of a strategic partnership that will help Lloyds reach its digital transformation goals.

Lloyds will leverage Thought Machine’s Vault solution, a cloud-based, next generation core banking platform to provide its customers with more personalized solutions, as well as accelerating the development cycles for additional digital banking additions. Lloyds noted in a press release that not only has it “completed extensive testing and proofs of concept” with Thought Machine, but also that the firm plans to continue helping develop Vault’s capabilities.

Thought Machine CEO and founder Paul Taylor and Chief of Sales & Marketing Travers Clarke-Walker demonstrating Vault at FinovateEurope 2018.

“A key part of our recently launched three-year strategic plan is applying technology innovation to meet our customers’ evolving needs,” Lloyds Group Director for Transformation Zak Mian explained. “I’m really excited to work with the Thought Machine team to explore ways to simplify and enhance our IT architecture and (help) on our journey to make banking easy and simple for customers.”

Founded in 2014 and headquartered in London, U.K., Thought Machine demonstrated Vault at FinovateEurope earlier this year. The flexible, end-to-end, cloud-based platform comes with a full suite of banking solutions including current accounts, loans, savings, mortgages, and credit cards – all delivered via Vault’s system of smart contracts. Driven by what Thought Machine founder and CEO Paul Taylor called a reaction to “the horror of the legacy IT systems” used by banks, Thought Machine and its team of 60 are dedicated to helping banks provide their customers with the “quality and richness of service they deserve.”

“We are delighted to announce this partnership with Lloyds,” Taylor said. “Lloyds has shown a deep commitment to embrace the opportunities that new technologies can bring in improving customers’ banking experience and it is a pleasure to take this partnership forward.”

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