Home Business PayPal-backed fintech firm Tink boosts valuation in new funding round

PayPal-backed fintech firm Tink boosts valuation in new funding round

Tink co-founders Daniel Kjellén and Fredrik Hedberg.

Tink

LONDON — A new movement in finance that calls on big banks to share their coveted customer data with younger technology rivals has gained significant momentum in 2020.

Called open banking, a number of start-ups developing tech around the trend have raised significant sums from investors, with U.S. provider Plaid even looking to be acquired by Visa.

Now, a major European player in the space has hit a new milestone. Swedish fintech start-up Tink has seen its valuation rise to 680 million euros ($827 million) in a new investment round, according to people familiar with the matter.

Tink, whose software lets banks and fintech firms access banking data to create new financial products, raised 85 million euros in fresh funding co-led by French private equity firm Eurazeo and U.K.-based venture capital firm Dawn Capital.

The Stockholm-based firm’s valuation is up more than 60% from the 415 million euros it was worth at the start of the year, the people told CNBC, preferring to remain anonymous as the information has not been made public.

The fresh funding tops up a 90 million euro funding round Tink secured from investors in January. Tink’s backers range from online payments processing giant PayPal to major European banks like BNP Paribas and ABN Amro.

What is open banking?

Founded in 2012, Tink operates in the so-called “open banking” space, which aims to develop innovative financial services by connecting to data from large established banks.

Proponents of open banking technology say it brings more transparency and competition to the industry, as well as a better banking experience for consumers.

Tink’s open banking platform aggregates data from thousands of banks, allowing developers to build apps that show users their checking accounts and make payments from different providers, among other things.

“Despite the difficulties this year, it’s been a year with fantastic progress with Tink and, I think, fantastic progress on open banking in general,” Tink’s co-founder and CEO Daniel Kjellén told CNBC in an interview.

“We continued to grow heavily organically, but also for the first time we’ve been doing M&A across Europe to complement our platform.”

Tink agreed to acquire three companies earlier this year — Sweden’s Instantor, Spain’s Eurobits and the U.K.’s OpenWrks — in a bid to expand further into new European territories and bolster its platform.