Backbase raises its first $128 million in funding at a $2.6 billion valuation for tools that help banks engage

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Big banks and other financial service providers are getting more serious when it comes to competing with newcomers who are changing their business with fresher approaches and new technologies. Today, one of the companies helping these big banks with this challenge is announcing a big funding round to double that opportunity.

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backbase is an Amsterdam-based startup that provides a platform that banks and others can use to better structure and use the data they have, and then use it to create more personalization and other new features in those banks’ customer services. has raised 120 million euros ($128 million at today’s exchange rates), money it will use to continue investing in its technology as well as expanding its teams to other regions. The funds from one investor, Motive Partners, value Backbase at 2.5 billion euros ($2.6 billion).

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Backbase has been around for ten years. It has attracted 150 major banking clients, revenue has grown from 20 million euros to 200 million euros, and it is profitable, all without raising money – in fact, just a few days ago they became the subject of profile on the merits of bootstrapping… oops.

He decided to deviate from this path for the same reason as many others who were at the initial stage: they want to strike while the iron is hot and invest in growth at a time when their services are in demand.

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We want to double our go-to-market strategy and increase market share,” Joak Pleiter, founder and CEO of Backbase, said in an interview. It operates on all continents of the world, but plans to specifically develop teams in the Middle East, Africa and Latin America in order to have a “stronger position in local markets.” We want to be closer to larger digital transformation programs for companies.”

The problem Basebase is solving is one that is specific to the financial services industry: incumbent big banks and other banks have been creating digital services for forty years. But most of them work with disparate databases and in many cases have useful resources but no way to use them, let alone organize them with each other. Some may try to rebuild from scratch, but in many cases, when they add or remove services, they create new infrastructure, but in many cases, these individual services are still working, so institutions do not want to throw away what is not broken.

Backbase provides a platform that essentially does this: it’s based on middleware designed to get data from different sources and then use that information to create “on the glass” services – those focused on customer acquisition, such as as customer adaptation. , digital banking and other assistants, as well as other interaction tools.

It wasn’t an easy tool to build, and that’s one of the reasons he won’t use acquisition funding: integration is much more painful than building an integrated one from scratch (perhaps a lesson his bank clients could learn). forty years ago).

“We’ve had some crazy times over the last 10 years,” Pleiter said of the process of building the platform. “There are many point solutions. But we have built our tool around a broader vision. At first it seemed impossible, but we knew it would be good: a single platform for any customer journey, loyalty, onboarding, and so on. Now we have 10 years and a critical mass, a single end-to-end platform for customer interaction throughout the lifecycle.”

There are a number of other companies that have identified the same issues facing actors in the financial services industry. Among them are Mambu, Thought Machine, 10x and Bad Financewhich this week announced its own funding and also works with some very big names in the banking industry.

Backbase, in addition to being already profitable and working with 150 clients, excels at focusing on customer interaction issues and how it handles banks’ own data, allowing customers to potentially add other data if they wish. .

“For over a decade, Backbase has demonstrated leadership and innovation in improving the digital relationship between financial institutions and their customers,” Rob Haverth, founder and managing partner of Motive Partners, explained in a statement. “We are thrilled to support Jouk and the Backbase team with this initial fundraiser as they continue to expand, grow and build the leading customer-centric banking platform for collaboration worldwide.”

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