By John Reynolds on Monday 2 March 2020
Thought Machine said it will use funds to drive international expansion and improve its core technology.
Draper Esprit, the Dublin-listed venture capital firm which has been an investor in Revolut and Transferwise, invested £26.5m of the funding in Thought Machine, which builds cloud technology for banks and was founded by a Google engineer.
The funding round will be used to fund Thought Machine's global expansion, including launching in the US and extending its presence in Asia Pacific, as well as improving its core technology, according to Paul Taylor, CEO and founder of Thought Machine.
Thought Machine, headquartered in London, was set up in 2014 and now has 300 employees.
Its clients include Lloyds Banking Group and Standard Chartered, which use its banking platform Vault.
Existing investors in Thought Machine including VC firm IQ Captial, Lloyds, Playfair Capital, the UK seed investor, which all participated in the latest funding round, with IQ Capital contributing £15m.
Paul Taylor, Chief Executive Officer and Founder of Thought Machine (pictured), said: “For the past six years, our purpose has been to offer banks a next-generation solution to liberate them from legacy systems which plague the financial services industry."
"This funding round comes at a pivotal stage in the company’s growth. Thought Machine’s revenues are very healthy, as we see cloud native banking become the most common desired target architecture for the world’s banks."
"The customer demand is huge, and this investment allows us to grow rapidly enough to serve all our target markets. As well as international expansion, we will put further investment into our core technology, 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.”
Vinoth Jayakumar, Investment Director, Draper Esprit, added: “Our investments in Revolut and N26 demonstrate how banking is undergoing a once in a generation transformation in the technology it uses and the benefit it confers to the customers of the bank. We continue to invest in our thesis of the technology layer that forms the backbone of banking."
"Thought Machine stands out by way of the strength of its engineering capability, and is unique in being the only company in the banking technology space that has developed a platform capable of hosting and migrating international Tier 1 banks. This allows innovative banks to expand beyond."
Max Bautin, Founding Partner of IQ Capital, said: “We first backed Thought Machine at seed stage in 2016 and have seen it grow from a startup to a 300-person strong global scaleup with a global customer base and potential to become one of the most valuable European fintech companies."
Prior to its latest funding round, Thought Machine has raised more than £18m from IQ Capital, Playfair Capital and Backed, the VC fund.