Berlin-based startup Ivy has raised $20 million in Series A funding to expand its global network for open banking payments.
“Ivy is building a network of networks for instant bank payments,” Ivy Co-founder and CEO Ferdinand Dabitz said in a Thursday (Aug. 31) post on LinkedIn announcing the new funding. “Over 60 geographies around the world are rolling out instant bank payment infrastructure; Pix, UPI, [FedNow® Service] or Open Banking are just a few prominent examples. Ivy is bringing these regional and heterogeneous systems to a unified gateway.”
The company aims to help businesses start accepting instant bank payments or improve the conversion and success rates within their current instant bank setup, Dabitz said in the post.
The funding will be used to expand Ivy’s banking partnerships into more geographies and attract additional merchant customers, TechCruch reported Thursday. Ivy offers tools for merchants to integrate open banking payment account options at checkout, along with features like “smart routing” for maximum transaction speed, risk management, instant payouts and payment links.
The Series A round was led by Valar Ventures, a prominent FinTech investor, and Ivy’s valuation during the funding round was estimated to be between $80 million and $90 million, according to the report. Ivy currently serves approximately 5,000 banks, covering 500 million bank accounts. Its platform caters to various industries, including online merchants in marketplaces, eCommerce, travel and FinTech.
Dabitz emphasized the importance of a single point of contact in open banking and hinted at upcoming partnerships with major payment service providers (PSPs) that will leverage Ivy’s open banking offerings, the report said. These partnerships could become significant revenue streams for Ivy.
Merchants integrating Ivy’s application programming interface (API) pay fees based on transaction volume, per the report. Ivy’s fees are positioned as a more cost-effective alternative to card payments, making it an attractive proposition for merchants.
PYMNTS research has found that open banking can accelerate real-time payments implementation. It allows instant payment providers to connect with any bank’s API and meet customers where they are, according to “Open Banking and Real-Time Payments: An Essential Partnership,” a PYMNTS and The Clearing House collaboration.
Another benefit of real-time payments via open banking protocols is that these services give small and medium-sized businesses (SMBs) more immediate and accurate insights into their current financial status, the report said.