True Layer, the London-based fintech hoping to capitalise on the ‘open banking’ data revolution has secured the backing of Chinese internet giant Tencent as well as Singaporean sovereign wealth fund Temasek. Both will take part in a $40 million funding round, that is being led by Tencent and expected to be confirmed as concluded in the near future – possibly before the end of this week.
Founded 5 years ago by 34-year old Italian entrepreneurs Francesco Simoneschi and Luca Martinetti, True Layer has already succeeding in raising $10 million to develop the fintech start-up’s data and payments APIs and business model. The company has been heralded for a couple of years now as potentially the first UK open banking ‘unicorn’.
Open banking regulations came into force last year. What they mean is that every financial service provider is obliged to hand back ownership of user data to the individual users. That means every individual user is able to request that their own personal data is made accessible via API to any other service provider they choose to make it available to.
Open banking opens up the possibility of third party apps that a user control multiple bank accounts from or link an insurance or mortgage provider directly to their banking data to make the application process easier.
True Layer works inside the ‘plumbing’ of the new open banking environment. Their data and payments APIs are the tools that allow these third parties to effectively build apps that harness the possibilities of open banking. They provide the tools and interfaces that allow third parties to tap into customer data and access the payments network.
Europe and the UK have a now established open banking regime and in the United States, Singapore, Japan, India, New Zealand, Canada, South Korea regulators are now moving in the same direction. Over time, open banking is expected to become a relatively global standard and True Layer is poised to capitalise on that trend.
Tencent is a particularly good strategic investment partner for True Layer to have secured given that the Chinese internet giant is heavily invested in multiple fintech companies and holds stakes in several digital banks. The founders will hope the company’s backing will help open doors to partnerships across the international fintech scene.