UK fintech 10x raises $ 187m to build new services for legacy banks – TechCrunch

As so-called neobanks continue to gain traction in the market with their more modern approaches to banking and other financial services, a startup that is building technology to help legacy players compete better announces big round of funding .

10x Future Technologies, a London-based fintech that helps large, established banks create next-generation services as well as tools to help their legacy services run more efficiently, raised $ 187 million. We understand from sources close to the company that the valuation of 10x with this round is in the order of $ 700 million.

(The amount raised and valuation also roughly matches numbers from Sky News, which reported earlier this month that 10x is raising new funding.)

10x will use the funds both to expand into new geographies like North America, as well as to continue to develop more technology for its flagship platform. SuperCore, as this platform is called, is an all-in-one system designed from the ground up to run a wide range of banking services such as payments, basic banking, mortgages, analytics, security and marketing, which 10x bank customers can integrate into their existing technology through APIs, or 10x can be used to build new services from scratch for these customers.

Image credits: 10x (Opens in a new window)

This round of the C Series is packed with heavyweights that are a testament to the credibility 10x has gained over its five years in the market.

Co-led by BlackRock and the Canada Pension Plan Investment Board (CPP Investments), it also includes existing investors JPMorgan Chase, Nationwide, Ping An and Australian Westpac.

The latter four include strategic backers: Antony Jenkins, the founder and CEO of 10x who himself worked in major banks (his last role was CEO of Barclays, and although he left under a cloud, his notoriety and track record are probably reasons for the influence of the company), tells us that 10x is currently developing services for Westpac and Nationwide.

10x has two other banks as clients that it is not yet disclosing, which will lead to more soon, Jenkins added, as the industry is “at a time of transition” right now. Some of 10x’s commitments are already live, with “volume flowing through the platform,” he said. Others have yet to be launched.

The opportunity that 10x is aiming for is great, but also elusive.

Neobanks and other next-generation fintech providers are slowly shaking the legacy banking stronghold on personal and business banking. They usually do this not by becoming full-fledged banks themselves, but by assembling traditional and more modern banking suites using APIs from other fintechs; machine learning algorithms to personalize customer services; and modern interfaces to make the whole experience more user-friendly than what you might get from a traditional bank.

Incumbent banks want to compete with these new entrants with their own competing products, but in many cases they cannot: their infrastructure is too old, and often the corporate culture is even older.

This is where 10x comes in, providing the tools and advice to help them set up new services.

Jenkins notes that currently many of the engagements 10x is seeing involve banks going into completely new services rather than creating services to replace the ones they already offer. A proper analogy here is that it’s a bit like putting a modern extension on a really old house, rather than remodeling and modernizing the whole old house from scratch.

But, it looks like we are now, five years into the life of 10x as a business, starting to see the first signs of banks keen to explore how to migrate their master data to more modern systems to make them more scalable. and usable in a wider range of new services, and 10x believes it can be a partner in this back-end transformation as well.

“Existing systems are where the problems for banks are, because they’re all built around the product, not the customers,” he said. “But we believe the industry is ready to consider the migration process now.” The company is not yet working on such projects, he added, but it expects to do so within the next 12 months.

And even with other fintech startups, like FintechOS, which are also creating services aimed at helping incumbent banks to be more modern, this expectation represents an opportunity for investors.

“We have been impressed with 10x’s strategy and ambition to play a key role at the heart of the transformations underway in financial services, driven by technological innovation, consumer expectations and regulatory reform,” said William Abecassis, head of BlackRock Innovation Capital, said in a statement. . “We are excited to invest in the business as it expands into new markets. “

Leon Pedersen, MD and Head of Thematic Investments, CPP Investments added, “10x is uniquely positioned to change the way big banks are built and deliver to their clients. 10x presents an attractive opportunity for a long-term investor like CPP Investments as we believe they will benefit from their exposure to the structural growth trend of financial institutions investing in digital initiatives and renewing the core technological infrastructure, enabling banks to introduce new offers and products much faster than using the old platforms.

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