Exactly 7 years ago, the European Union introduced open banking, effectively obliging banks to allow third-party companies to use programming interfaces to interact with customer data, with prior consent.
A few months later, Francesco Simoneschi and Luca Martinetti they decided to bet on the birth of a new market and founded Truelayer, a startup that allows you to integrate financial data and payments within any application. Last month they have closed a $ 130 million Series E investment round with Tiger Global and Stripe, for a valuation of more than a billion dollars. These years have not been a walk in the park, however, because selling a product for a market that does not yet exist never is.
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“At the beginning the industry did not take the open banking legislation seriously – Simoneschi recalls – There was a lot of negativity about banks following the law, and many were actually reluctant to do so. We told ourselves that this was the technological direction in which the whole world was going and that it would therefore have been a calculated risk“. So the two chose London, the heart of European fintech, as their base and set off: “In the United States, where we lived, open banking was starting to work on a large scale, but in a varied way. The fact that there had been the initiative of the regulator in Europe gave a broader scope to this type of innovation and qualified it as a European opportunity, which is rare. In this context, England was the country that moved first. And so we chose London“. Today Truelayer has about 300 employees, about fifty in Milan, where the scale-up technology hub is based: “In Italy we think there are considerable talents and skills to be part of companies like ours. We Italians are second to none from this point of view, even if we lack a bit of experience. We need more people who have made these experiences and then remain, and this is starting to happen also thanks to companies like ours “.
In 2016 Simoneschi was engaged in a small venture capitalist fund, Mission and Market, founded together with Stefano Bernardi and Simone Brunozzi after having created and sold, together with Martinetti, two startups: DomainsBot in Italy and Staq in the USA, with which they had been incubated by Microsoft and Techstars. Simoneschi was involved in investments in fintech, and when he saw the opportunities opened up by open banking he decided to seize them on the fly. However, this did not make the beginning easier: “We had to tell what was going to happen without having immediate evidence, since up to 2018, in fact, open banking did not exist. Our conviction focused on who would use the interface, so the first customers were other fintechs looking for alternative ways to solve the problems they encountered. Plum was one of the first, then it came Revolut, and other companies to follow who wanted to take risks where they saw the possibility of developing a better user experience “.
And this is how Simoneschi and Martinetti learned the true meaning of the word resilience: “True errors do not have a feedback loop and we will probably discover the ones we have completed in a few years, but the road of all startups is dotted with reversible and minor errors that it does not even make sense to call errors. The most important thing I’ve learned in my experiences is that you have to keep your head in order even on bad days, which are many, putting people first because they are the ones who will lead the group to success “. And this translates into a systematic approach to customer inquiries: “One usually tries to solve the problem one is hitting on, but prioritizing talent is best. Customers have to come later, first you need to put the corporate culture and the team “.
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In the meantime, unicorn status has now been acquired. “Internally, we are already projected further. At some point we will have to think about the listing or something like that, but we are still a long way off. We want to replace credit and debit cards with home banking, and in the coming months we want to see more and more consumers in Europe adopt direct payments. We are very happy to be independent and we plan to go in this direction ”.
The game is important, but not easy. There competition not lacking and the main rivals today are part of much larger groups:
Trustly, platform for digital payments founded in Sweden in 2008, it passed under the control of the Nordic Capital private equity group in 2018 for 794 million dollars;
Tink was acquired in June by Visa for over 2 billion dollars;
finally Sofort, acquired by gigante del buy-now-pay-later Klarna in 2014 for 150 million dollars.
Fortunately for Truelayer, investors are in no hurry to return, on the contrary they support the independence projects that Simoneschi and Martinetti are cultivating, already projected towards the aggression of in-store payments. Of them Pietro Bezza, co-founder and managing partner of Connect Ventures, one of Truelayer’s early investors, wrote this: “Many other players have been looking for easy revenue across a myriad of segments and products, while TrueLayer intentionally chose a different and non-obvious product strategy, ie payment-first, user-centric and developer-friendly. Easy to say, difficult to do, because it requires a giant dose of courage, creativity and concentration ”. Simoneschi’s confirmation: “We saw something that didn’t exist and we knew it would exist, and we believed it would change the rules of the game. This is why we believed in a new type of market and did not try to enter the existing one with the idea of improving it. We wanted to bet on a different technology that has never been used before “.
Query the Truelayer card inside to Italian Tech Startup Database.