Thought Machine, a 2014 (Xoogler) founded startup that sells cloud-based b2b banking services, has closed a $200 million Series C round and announced that it’s achieved unicorn status (aka, passing a $1BN valuation).
The new funding follows an $83M Series B round last year — when it described its market cap as “increasing healthily”.
The Series C is led by New York- and San Francisco-based Nyca Partners, with other new investors including ING Ventures, JPMorgan Chase Strategic Investments and Standard Chartered Ventures — the investment arms of some of its global tier one banking clients.
Lloyds Banking Group, which led Thought Machine’s Series A, has also participated in the latest raise.
Other existing investors also returning for the Series C are British Patient Capital, Eurazeo, SEB, Molten Ventures (formerly Draper Esprit), Backed, and IQ Capital.
Thought Machine describes itself as a “cloud native core banking technology” firm — and is selling cloud-basked banking infrastructure to old and new banks as they look to offer their customers services via the cloud, moving away from mainframe, legacy banking tech (in the case of old school banks) or offering cloud-based services from the get-go in the case of challenger banks and fintech startups.
The startup’s Series C follows a period of accelerated growth, with Thought Machine noting it’s added 200+ employees since 2020 and relocating into a larger London HQ to accommodate its expanded headcount.
The new funding will be used to continue development and expansion of its flagship SaaS product Vault — a cloud-native platform which its b2b customers rely on to provide a range of retail banking services, from checking accounts, savings accounts, loans and credit cards to mortgages.
Vault is built around APIs, using a microservice architecture and a system of Smart Contracts — hosted on a cloud service of the customer’s choosing (the likes of Google Cloud Platform, Microsoft Azure, Amazon Web Services and IBM Cloud are supported) — with touted benefits including increased flexible and more scalable infrastructure, as well as reduced running costs vs maintaining legacy technology.
Commenting on the funding in a statement, Paul Taylor, CEO and founder of Thought Machine said: “We are delighted to have earned the support of our new and existing investors as we continue to move the world’s leading banks into the cloud. We set out to eradicate legacy technology from the industry and ensure that all banks deployed on Vault can succeed and deliver on their ambitions. These new funds will accelerate the delivery of Vault into banks around the world who wish to implement their future vision of financial services.”
In another supporting statement, Hans Morris, managing partner at Nyca Partners, added: “Thought Machine is the leading technology among the new generation of cloud native core platforms, and as a result it has become the top choice for tier one banks looking to upgrade their core architecture. These institutions tell us that Thought Machine’s engineering approach is unrivalled; Vault is highly configurable, flexible, scalable, and specifically designed for the complex environment and requirements of tier one banks. Investing in Thought Machine is an investment in the future of banking and we are very energized to be working with them as they build a new standard for core banking technology.”