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Tink, a Sweden-based open banking platform, has secured €90 million ($100 million) in a funding round co-led by Dawn Capital, HMI Capital, and Insight Partners, reports TechCrunch. The funding, which comes less than a year after the startup announced a €56 million ($63 million) raise, values Tink at €415 million ($461 million).
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Tink will use the latest capital injection to accelerate its European expansion as well as for further development of its product. Initially launched in 2013 as a consumer-facing app centered on account aggregation, Tink has since pivoted, operating a business-to-business (B2B) model aimed at helping financial institutions (FIs) comply with and take advantage of open banking across the UK and Europe.
Tink’s rapid expansion in recent years has likely been boosted by a slew of technical issues that have plagued open banking progress in Europe and the UK. Last year was anticipated to be a significant year for open banking in Europe and the UK. However, the regulation’s aim of making it easier for consumers to share their financial data has faced hurdles, including low-quality bank APIs that have made it harder for fintechs to connect with them.
This has been a boon for Tink’s open banking platform, because its APIs enable banks to meet these regulatory requirements. And Tink’s clients can also use its plug-and-play APIs to move beyond compliance, allowing them to build account aggregation, payment initiation, data enrichment, and personal finance management products.
It’s no wonder then that Tink has achieved rapid traction since its B2B pivot, boasting a slew of high-profile partners like BNP Paribas Fortis, ABN AMRO, SEB, and Klarna. The startup’s platform is now live in 12 European markets, connecting to over 2,500 banks that collectively reach more than 250 million customers across the region.
Despite Tink’s size and growth, it is now facing what may be its biggest challenge yet: Plaid. Tink is not the only open banking API player operating in Europe, but it is the biggest: For context, peer TrueLayer, founded in 2016, has raised almost $47 million — less than a quarter of the $205 million Tink has raised. However, Tink is likely to face fierce competition in the coming years from Plaid, a player that has significantly more resources.
Much like Tink, Plaid has developed API technology that enables data sharing between FIs and fintechs. The fintech only expanded into the UK and Europe recently. Yet, Plaid now boasts the backing of Visa — the credit card giant agreed to acquire Plaid for $5.3 billion, with the deal expected to close in the next three to six months — which has a huge network of FI partners across the region, giving Plaid vast resources to scale rapidly.
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