An API-Based Network for Open Banking Payments
Berlin-based startup Ivy has raised $20 million in a Series A funding round led by Valar Ventures. The company aims to create a “network of networks” for open banking payments globally. Open banking, where traditional banks open their data through APIs to build new financial services, has the potential to disrupt traditional payment networks like Visa. However, open banking payments are currently limited to domestic transactions on single currencies. Ivy seeks to address this limitation and build a global network for open banking.
Expanding Banking Deals and Merchant Customers
The funding will be used to expand Ivy’s banking partnerships into more geographies and onboard more merchant customers. Ivy provides tools for merchants to integrate open banking payment account options at checkout. Additionally, it offers features such as smart routing, risk management, instant payouts, and payment links. The company aims to create a seamless and efficient open banking payment experience for merchants and consumers.
The Growing Potential of Open Banking
Open banking has seen significant growth in Europe, with over 400 open banking tech providers. However, the technology remains primarily domestic-focused. Ivy believes that, in the future, there will be a single point of contact for open banking, similar to what Visa has achieved for card payments. While global open banking is not yet a reality, Ivy aims to build the necessary infrastructure to support it.
The Importance of Partnerships and Revenue Funnel
Ivy’s CEO, Ferdinand Dabitz, mentioned that the company has significant deals with major payment service providers in the pipeline. These partnerships could potentially generate substantial revenue for Ivy. While some payment service providers may view open banking as a distraction, offering the option to customers and exploring the technology is important for future business development.
The Opportunity for Open Banking Startups
Open banking startups have attracted significant attention and investment in recent years. Companies like Sweden’s Tink and the UK’s Volt have secured acquisitions and high valuations. This demonstrates the potential for the right teams and technologies in the open banking space. Ivy’s recent funding round and investor interest reflect the industry’s growing activity and the opportunity for disruptive solutions.
Key Takeaway
– Ivy raises $20 million in Series A funding to expand its open banking payment network globally.
– The company aims to create a seamless and efficient open banking payment system for merchants and consumers.
– Ivy’s partnerships with major payment service providers could drive significant revenue for the company.
– The open banking industry presents opportunities for startups to disrupt traditional payment networks.
