Ivy, a Berlin-based provider of APIs for instant bank transfers, stated on Thursday, August 30, that it has raised $20 million (about €18 million) in a Series A round of funding headed by Valar Ventures, which is coming just five weeks after Ivy made public a $7.7 million seed round led by Creandum.
“Account-to-account payments are just getting started. What began with Open Banking in Europe has now become a global movement, with rails worldwide becoming increasingly mature.
Having looked at several legacy players as well as start-ups in this space, Ivy’s product was outperforming its peers significantly across all relevant metrics – conversion, adoption, and success rates. We feel the team has found a winning proposition,” says Simon Schmincke, General Partner at Creandum.
Point of focus: Open Banking
The focus of Ivy, a financial technology company, is on open banking-based payments.
Currently, open banking payments are growing in various markets, with over 400 open banking tech providers in Europe alone. However, these payments are primarily limited to domestic transactions within single currencies.
Ivy’s CEO, Ferdinand Dabitz, believes that open banking is becoming a global phenomenon, but the technology supporting it remains primarily domestic.
The company’s key insight is the need for interoperability in open banking to benefit consumers. Ivy envisions a future where, just like Visa has created a single point of contact for card payments, there will be a global network for open banking.
Thus, Ivy aims to build the infrastructure required for this global expansion of open banking-based payments.
Investors in Ivy
In addition to 10xFounders, Jens Lapinski from Angel Invest, and a number of angel investors, including Jeppe Rindom, Daniel Krauss, Jochen Engert, André Schwämmlein, Oliver Merkel, Christian Grobe, Matthias Knecht, Martin Blessing, and F1 World Champion Nico Rosberg, Ivy has raised €7 million in a seed round.
Plans to build a better payments world’ with global API:
Ivy, which was founded by Ferdinand Dabitz, Peter Mosebjane Lieck, Joshua Becker, and Simon Wimmer offers an API for open banking that allows customers to transfer funds from their bank accounts to merchants, eliminating the need for credit cards and reducing transaction fees.
Ivy also provides a range of services, including tools for merchants to seamlessly integrate open banking payment options. They offer features like “smart routing” to improve transaction speed, robust risk management, instant payouts, and payment links. Ivy’s primary focus is on open banking-based payments, which are growing in individual markets.
The company’s API connects with over 500 million bank accounts in 50 geographies across Europe, the US, MENA, and SEA regions. Ivy works with various types of customers, including online merchants in marketplaces, travel, e-commerce, and fintech.
They have also partnered with non-profits to enable merchants to offer green rewards to their customers, allowing cards and wallets to contribute to climate action.
Wise, N26 investor backs Germany’s Ivy
Valar Ventures is a venture capital investment firm based in New York, specializes in investing in financial technology companies at various stages, including seed-stage, early-stage, and later-stage startups worldwide. The firm has previously invested in companies like Wise, N26, Qonto, and Stash.
According to Valar’s McCormack, Ivy aims to create a global point of access for merchants and consumers in the account-to-account payment space, similar to what Visa and Mastercard have achieved for cards.
Ivy’s offering includes a powerful payments platform and sophisticated smart routing to improve conversion and success rates for businesses.
“Ivy is building for account-to-account what Visa and Mastercard have built for cards: a single, global point of access for merchants and consumers,” says Valar’s McCormack in a statement to TechCrunch.
“Driven by a powerful payments platform and sophisticated smart routing that drives conversion and success rates for businesses. The market demand for Ivy’s solution is extremely impressive,” he adds.