British startup Thought Machine has raised $200 million in a new round of funding, raising its estimate to the desired $1 billion. U.S. venture capital firm Nyca Partners led the cash injection, which has previously placed bets on companies such as Revolut and Affirms. Additional support came from lenders such as Standard Chartered, JPMorgan Chase, and ING. Existing investors SEB, Eurazeo, and Lloyds Banking Group rose their stocks.
Founded in 2014, Thought Machine says the company’s software helps big banks move from legacy I.T. infrastructure to a modern, cloud-based platform. The firm counts its famous banking supporters as clients. In the U.S., the company has a deal with JPMorgan to overhaul the company’s core retail banking system. Thought Machine has a similar agreement with Lloyds in the U.K.
Thought Machine requires significant investments to achieve the set goals. While the company now earns tens of millions of pounds, it is still not profitable. The company also makes its revenue from software subscription deals. According to them, this period is a fantastic time for entrepreneurship. More funding is available now than ever before. This means that in the U.K., a company can build more than it does today.
Thought Machine plans to use new cash internationally. The corporation opened an office in New York this year. From which about 20 employees lead U.S. expansion.
Thought Machine Plans
Thought Machine is simultaneously setting up shop in new Asian markets such as Japan and Malaysia. According to the CEO, about half of the company’s business now comes from Asia. It has a representation of 500 people worldwide.
Thought Machine’s competitor is Mambu, valued at more than $2 billion in the last round of funding; Also 10x Future Technologies Financial Enterprise. 10x also supports JPMorgan. Thought Machine is one of the new business-focused fintechs seeking to partner with global banking giants. Banks face increasing competition from companies such as Revolut, Chime, and N26.
So far, opponents still do not have a significant delay in the market share of existing companies. They are gaining much funding from venture capitalists who want to subsidize substantial losses in favor of rapid growth.
In parallel, banks are trying to use their own independent digital banking products. JPMorgan recently released a digital version of the Chase brand in the U.K. Credit Suisse has launched a new banking application CSX in Switzerland. Several creditors have stalled on their digital transformation journey. RBS closed its online banking brand Bo in 2020.
According to the founder of Thought Machine, the company aims to create comfort for banks. If anyone wants to start a cloud-based bank, their platform is just that. Thought Machine is working on new offers in parallel, which is still confidential.
