Cloud-native London FinTech startup Thought Machine has raised $83 million in a Series B funding round led by Draper Esprit, with participation from existing investors Lloyds Banking Group, IQ Capital, Backed and Playfair, Thought Machine announced on Monday (March 2).
The consumer banking shift from physical branches to online services has been quickly accelerating, with customers anticipating and asking for even quicker financial services. Thought Machine’s cloud-based technology powers this latest range of services on behalf of legacy financial institutions and neobanks.
Thought Machine plans to use the funding to advance its platform and grow its customer base, which right now is centered in Europe and Asia. Current clients include legacy institutions — Standard Chartered, Lloyds Banking Group, Sweden’s SEB — and challenger or neobanks like Atom.
Some of the funding will benefit Thought Machine’s plans for a U.S. expansion, which includes opening an office at the end of this year. The funding will also be used to drive Thought Machine’s global expansion into Asia Pacific.
The company’s cloud-based blockchain banking solution — called the Vault — lets legacy and challenger banks compete in the cloud while also offering scalability. The Vault platform offers checking accounts, savings accounts, loans, credit cards and mortgages. Thought Machine is a B2B2C model and doesn’t sell services directly to individuals.
Founded in 2014 by former Google engineer Paul Taylor, who serves as the company’s chief executive officer, Thought Machine has a workforce of 300 and a market cap that is currently “increasing healthily,” according to TechCrunch.
The startup was valued at around $143 million during its Series A funding in 2014. The news outlet estimated that at the current funding stage, its valuation could potentially be $220 million to $320 million.
Taylor said that because Thought Machine is in growth mode, it is not yet turning a profit. The startup also went through an organizational bankruptcy restructuring; assets, employees and customers from one business controlled by Taylor were acquired by another.
Thought Machine has plans to roll out in Australia and Japan and later in 2020, the startup will launch in North America.
“There are all sorts of banks, and they are all trying to find niches,” said Taylor.
U.K. banking startup Atom teamed up with Thought Machine in 2018 to move its technology onto the company’s blockchain platform.