Banking infrastructure may not sound enticing, but it’s one of the most lucrative corners of tech given the demand from banks old and new to update archaic and slow systems.
The latest startup to attract funding in the sector is Plumery, a SaaS startup founded by European fintech veteran Ben Goldin. The company has raised a €2m equity and €2.3m convertible debt seed round.
Its tech is designed to be used both by legacy and neobanks, as well as digital wallet providers, to customise user experience (UX).
How does Plumery work?
For the Natwests and HSBCs of the world, migrating banking systems from an IT framework likely designed in the 90s to a new cloud-based platform like Mambu is a complicated process, which means that many of these well-capitalised banks are instead building new systems in-house. See JP Morgan’s plans to double the headcount at its UK neobank Chase to 2,000 by the end of 2024, for example.
But building new tech from within an old-school institution takes a very long time — it can take a legacy bank around six months to update a feature on its app, while a neobank like Monzo may complete up to 100 updates a day, according to Goldin.
So Goldin says he’s building a software API at Plumery to help speed up the launch of new features, and present real-time data on their performance. It can either sit on top of the core banking platforms on the market, like Mambu, which is already a partner, or can be layered on top of a bank’s existing legacy system.
The idea is that Plumery will also cut down the need for hundreds of expensive engineering hires — in fact, Goldin tells Sifted he thinks that if JP Morgan used Plumery for its Chase bank, it could cut down its hiring quota from 1,000 tech hires to just 30.
“We don't try to push banks into a corner of deciding whether to buy or build to modernise,” he tells Sifted.
“Instead we allow them to shift the gears a bit to build new features for a better customer experience today, while freeing up their engineers to work on the bigger underlying software issues for tomorrow.”
Plumery will operate a subscription-based model, made up of a base fee and then active user--based tiered pricing, which Goldin says is “as much as 10 times cheaper” than other UX software providers and can save millions on hiring costs.
Who’s backing Plumery?
- The round was led by global VC firm Headline (previous backers of Raisin and Tandem Bank) and US firm Better Tomorrow Ventures (backers of Ramp and AngelList).
- Early Revolut and Wise investor Seedcamp also participated, as did VC-cum-angel firm Cocoa.
- They were joined by angel investors Didier Valet (former deputy CEO of Société Générale Group), Ricky Knox (cofounder of Tandem Bank), and Alan Morgan (former Senior Partner at McKinsey and Co.
What’s next for Plumery?
- Goldin plans to up his team of mainly engineers from 10 to 15 by the end of the year.
- Plumery will focus initially on banks in southern Europe and the Middle East, which Goldin says are underserved by digital applications but are developing fast.
- Goldin expects around 30% of Plumery’s initial customers to be traditional banks, with the rest split between digital wallets (c.15%, he estimates) and neobanks (55%).
Plumery is by no means the first company jostling to help build this layer of UX banking software. There’s Amsterdam-HQ’d Backbase, where Goldin used to work, which is the only direct rival focusing on just this layer. There are also a few SaaS startups out there providing end-to-end solutions — as in both core banking infrastructure and UX functions — like FIS and Temenos. Lastly, Plumery is up against the neobanks and traditional banks that have decided to build everything in-house.
But Goldin is a bit of a veteran when it comes to European fintech, so let’s see if his product know-how and black book of contacts can help him out-build the competition.