Banked, a UK-based fintech company that specializes in payments has announced the completion of a $15 million Series A extension round. Combined with their original, oversubscribed Series A round, this puts their total investment to date to over $50 million.
Insight Partners, a 27-year-old global software investment business based in New York, took the lead in the round (which backed Bay Area startup Canary Technologies recently). Along with Banked’s new business partner Rapyd, a payments company, other financial institutions like Citi and National Australia Bank Ventures also joined at the same time.
The round demonstrates the broad acceptance of Banked’s pay-by-bank business model. It will be used to expand the fintech’s team and accelerate their US expansion as they work to revolutionize the world’s payments industry. In the initial Series A, they announced a partnership with Bank of America.
The system for making payments, which uses companies like Visa or Mastercard, hasn’t altered all that much. These are convenient for the customer but expensive for everyone else because banks and retailers must pay fees for the services. Direct bank payments can now be done just as effortlessly and securely as card payments thanks to open banking.
The model has garnered a lot of interest, which has fueled Banked’s growth and the addition of new partners. At a time when many in the fintech and broader financial sectors are being driven to consolidate, Insight Partners, which was acquired by Visa last year, contributes to the trust being shown in Banked. With around 100 employees, Goodall moved to Palo Alto to oversee the company’s US expansion.
The savings the Banked service provides through cheaper fees and lowered fraud risk are part of the appeal for many. “Users do not need to create an account or pass any login information to Banked – they simply choose their existing bank at checkout and are securely connected to their mobile banking app to biometrically authenticate the purchase,” said Byron Lichtenstein of Insight Partners, highlighting the benefit. A first-time user can complete their checkout in under 30 seconds. By utilizing the bank’s APIs, fees are kept low, and because of the security, fraud-related costs are minimized. By 2026, the European pay-by-bank sector is anticipated to be worth $43 billion.
Brad Goodall, co-founder, and CEO of Banked acknowledges the challenging economic environment, but he thinks Banked can, rather than profit, be a force for good in it. One thing, in my opinion, is that you should always keep in mind that many individuals are currently losing their employment. And I don’t think that’s the moment to take advantage, he adds. Goodall thinks that positive fintech companies like Banked may succeed at a time when people and businesses seek to save money. “The opportunities are where you can establish a fantastic infrastructure business. Can you create a company that will benefit B2B? Can you occupy those areas?
“Insight Partners is an incredible global organization with such strength in the payments and fintech industry,” Goodall says of the new investors. I couldn’t be happier to have Insight on board to construct what is a multibillion-dollar opportunity to boost our share price in this present market with tremendous demand from investors. The fact that Citi, NAB, and Rapyd have joined shows that Banked has true strength in collaborating with the biggest and greatest banks and payment companies in the world, which makes me happy as well.
“Banked has a big aim, and we think their team and product are set up to take on a chance as exciting as this one in payments. There are numerous approaches to the issue, but Banked’s special tactic of teaming up with commercial banks and payment service providers, as well as their product capabilities, stood out to us, according to Byron Lichtenstein, Managing Director of Insight Partners.
Image Credit: Banked