Since 2018 open banking has empowered people to take control of their banking data and given Third Party Providers (TPP) access to bank data (upon the user’s request). This new application has made it essential that the software connecting TPPs and banks is high-performing, safe, and secure. Yapily has created the API that enables TPP’s to connect to all banks to retrieve data and process payments. Yapily’s infrastructure provides a seamless experience for end-users and is trusted by corporate clients including Fortune 500 companies like QuickBooks and GoCardless.
London TechWatch sat down with CEO and Founder Stefano Vaccino to learn more about Yapily’s funding round and impressive traction, which includes providing open banking coverage in Ireland, Australia, Italy, and France. Since its founding in 2017, Yapily has raised a total of $18.4M across three rounds.
Who were your investors and how much did you raise?
We raised $13M in a Series A funding round led by Lakestar (an early investor in Skype, Spotify, Airbnb and Facebook as well as one of Europe’s biggest fintechs – Revolut). Existing investors HV Holtzbrinck Ventures and LocalGlobe also participated in the round.
Tell us about the product or service Yapily offers.
Yapily is an enterprise connectivity platform that enables companies to seamlessly connect and access financial data from banks. Using our open, secure API in this way gives people – whether as an individual user or as a business – greater control over their finances, and better security around who and what can access their data. This fuels greater financial management and accessibility for all
What inspired the start of Yapily?
Curiosity. I attended an open banking event in 2017 and two days later, Yapily was formed. I was fascinated about the global potential of open banking and open finance in helping entire populations have better access to financial services while disrupting many industries. I’ve been CPO for tech companies along with setting up several startups, and I have global ambitions.
How is Yapily different?
There are a few rivals out there, particularly in other international markets. But what we believe sets us apart is our approach. We focus on high-quality open connectivity and execution, as a result of that, we’re used by some of the world’s biggest companies and regulatory bodies.
We’re also driven by privacy. Our objective lies in powering a seamless journey for our clients behind the scenes, being completely invisible to the consumer, without ever compromising on security.
Our approach lies in taking a trusted advisory role, providing the infrastructure that enables companies to build personalised, open finance-based products.
What market are you targeting and how big is it?
We work across a range of lenders, payments, accounting software, and personal finance management (PFM) providers, so our target markets are extensive.
One big market for us lies in the accounting space. We’re the connectivity partner for two well-known accounting software providers; connecting our API seamlessly within their platforms to enable access to their users’ European bank accounts.
Accounting software providers are now testing how open banking can streamline payments for invoice automation which will significantly improve speed of access to funds. There’s a huge opportunity here across these markets to consolidate our position in Europe as the backbone of Open Banking, and the infrastructure that partners need in order to take advantage of Open Finance.
Who do you consider to be your main competitors?
US fintech Plaid and the likes of Tink and TrueLayer in Europe. Although we are all API providers, we all offer different technical solutions to our clients and have been successful in our markets. We’ve seen 500% monthly recurring revenue growth in the past six months across our European markets.
What’s your business model?
We are a SaaS open banking platform connecting companies to bank accounts across Europe. Our model is based on usage – as our clients grow, we grow with them. We are focused on only delivering quality API connectivity and don’t participate in a secondary data market.
What was the funding process like?
We began negotiations in February and they were closed by March. The investment discussions were already well advanced by the time the COVID-19 crisis hit the UK and had been finalised when the lockdown happened. Despite the uncertainty, we were pleased that Lakestar didn’t change their commitments or structure, even though circumstances had changed drastically.
What are the biggest challenges that you faced while raising capital?
Doing a funding round in a normal situation is stressful and challenging, but this time it was even more so given the COVID-19 crisis. In these uncertain times, companies need to be able to rely on trusted partners to ensure their day-to-day operations continue to take place. We’re pleased that Lakestar agreed on this and recognised us as a leader in the Open Banking sector, who can continue to provide the essential infrastructure needed to ensure companies around the world receive faster and affordable financial services.
What factors about your business led your investors to write the check?
Lakestar had kept in close contact with us since we first started. And we’d ensured that we’d maintained this relationship and kept them updated on our key milestones, our strong growth, and revenue.
They also recognised our strong position in the market. The UK is at the epicentre of the world’s open finance movement, with the industry setting the rules as the world begins to embrace their own open banking positions. We’re at the centre of this growth, and we’re the only technical provider trusted and chosen by regulators and technical committees. Lakestar was also keen to invest in our mission to drive open banking adoption and its benefits globally.
What are the milestones you plan to achieve in the next six months?
With one million customers now using Open Banking, doubling in the past six months, this year we will see a mass adoption of Open Banking. Over the next six months, we plan to use the new funding to consolidate our position in Europe as the backbone of Open Banking and the infrastructure partners need in order to take advantage of Open Finance.
We know of at least 51 countries working to introduce their own open banking positions, and we think, due to our experience, we’ll be best placed to take advantage of this. This will be a huge growth opportunity for us, and we will provide more ways in which we can support our client’s global aspirations.
The new funding comes during a highly successful period for us, in the last six months our monthly recurring revenue has grown by over 500%, we’ve quadrupled our headcount in London to 45, and expanded into Italy, Ireland and France. We are working towards total market coverage in Europe and regularly adding new territories.
Over the next six months, we plan to use the new funding to consolidate our position in Europe as the backbone of Open Banking and the infrastructure partners need in order to take advantage of Open Finance.
What advice can you offer companies in London that do not have a fresh injection of capital in the bank?
Companies shouldn’t wait to raise. If you have a strong partner willing to invest then you should go for it. While some might say “Let’s wait until May when we have maximum valuation”, it’s not about maximising valuation but about maximising success. We had a long runway and strong revenue so could have waited, but we took the chance in order to maximise success.
For companies not looking to raise at the moment, you should use this time to build relationships with investors before it’s needed; that way, you know who you are getting involved with before they invest in the business.
Taking time to build these relationships also helps you to choose the right partner. In our case, the right partner should understand the space, have technical experience, and fintech understanding. Ultimately, you should be ready for the unexpected and prepare for the worst.
What’s your favourite restaurant?
My favourite restaurant is Oddono, which is actually an ice cream place. If you make me choose between 1Kg of Italian gelato and a meal, I will always go for Gelato!
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