Core banking provider, Tuum, has raised €25m, in a series B financing round. The capital raising is led by CommerzVentures with participation from Speedinvest alongside existing investors.
Tuum has expanded rapidly since signing its first client partnership in February 2019. It is working with banks to ease their digital transition onto cheaper, flexible systems that can free them up to develop new products and enter new verticals. The company now boasts a customer base across 10 countries, with a pronounced presence in the UK, and Nordics. Over the last three years, Tuum reports revenues have risen at a compound annual growth rate of over 250%.
Andreas Kitter, co-CEO of LHV UK, a Banking-as-a-Service provider working with over 200 fintechs, commented: “Bank executives are put off doing core replacements because of the costs and risks involved. With Tuum, we migrated millions of customers accounts in 2 months. We are now running a state-of-the-art core system with a small team and spending 75% of our IT budget on innovation.”
Tuum to target DACH region, Southern Europe and the Middle East
The fresh infusion of capital will bolster Tuum’s international presence. Specifically, it will target new territories in the DACH region, Southern Europe, and the Middle East, where it is opening a new office. The company plans to enhance its direct sales and marketing operations. And it will strengthen its partner channel with key managed service relationships to amplify sales reach and implementation scalability.
Tuum says that the fundraise will also be used to deepen its key competitive differentiators. The company will increase investment into its “smart migration” capabilities. These are making complex core migrations possible in as little as two months. Further investments will refine Tuum’s ‘Business Builder’. This is a platform designed for significant customisation through configuration, providing a compelling alternative to the generic ‘one size fits all’ or ‘toolbox’ approaches of other cloud-native cores. Finally, Tuum will invest funds into expanding its comprehensive suite of modules and rich functionality. This currently include accounts, lending, payments, and card services, catering to both corporate and banking sectors.
Tuum: redefining the very essence of core banking
Myles Bertrand, CEO, Tuum, said: “Everyone knows that banks need to replace their ageing core banking systems if they are going to successfully adapt their business models for digital banking. However, no core banking vendor has to date made core migration simple and predictable. That is what Tuum is now doing through a combination of smart migrations, a modular and functionality rich core, massive extensibility, and a broad ecosystem of partners. With this Series B funding, we’re not just expanding our reach. We’re redefining the very essence of core banking for a digital-first future.”
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Core banking: an attractive sector with $15bn in annual spending
Heiko Schwender, Managing Partner at CommerzVentures, added: “At CommerzVentures, we have been following and investing in the core banking market for a long time. While it’s hard to break into, this is a huge, highly attractive space, with over $15bn in annual spending. Tuum’s standout modular approach is particularly suited to today’s ever-changing environment, offering a mature, yet flexible solution to a real pain point.
Tier 2 to 5 banks around the world will have to replace their ageing core systems smoothly and cost-effectively. Tuum has developed an impressively mature and differentiated offering that can help them do just this. We are delighted to be leading this series B. We look forward to working with the Tuum team to help realise the company’s massive potential.”