January 26, 2022

Estonian fintech Tuum raises €15m to bring banking up to speed

Demand for next-generation core banking services is rapidly growing, sped up by the pandemic, with Tallinn-based Tuum among those hoping to capitalise

Kit Gillet

4 min read

Estonian fintech startup Tuum announced a €15m Series A funding round today as it looks to strengthen its European presence, while also investing in product innovation and preparing for expansion beyond Europe.

The Tallinn-based company is among those trying to develop a more modular approach to overhauling the banking and financial services industry. It was founded in 2019 by a group of Estonian financial IT professionals, with decades' worth of combined experience in digitising and transforming large Nordic banks.

“We have such a strong background, so much knowledge in this industry, and we are so sure that we can achieve a lot,” Vilve Vene, Tuum’s CEO and cofounder, tells Sifted.


Modular approach to the future

Many consider this a key moment for financial service providers, with the demand for next-generation core banking services growing significantly, sped up by the pandemic. However, there’s a huge shift in how banks are approaching their digital transformation.

“Banks realise they can't replace everything at once. This approach doesn't doesn't work anymore,” says Vene. Instead, she says, a more pick-and-mix solution, where banks and others can choose from a host of cloud-based services to deliver new financial products and services quickly, is key.

Initially called Modularbank, Tuum has grown impressively over the last few years, with contracted annual revenues up more than 3x in 2021 alone. The company was listed among our potential future Estonian unicorns (as picked by investors) back in March 2021, under its previous name.

Tuum claims that its flexible, lean and modular core banking platform enables banks, fintechs and traditionally non-financial companies to quickly and easily roll out new financial products and services.

“That’s what the modular approach affords, and it's possible to integrate this new module offering with existing infrastructure,” she says.

Raising just enough for the next step

Tuum counts among its clients the likes of Banking Circle, LHV UK, Nets and Veriff, as well as other regulated banks, fintech companies and embedded finance players. The fintech raised €4m in seed funding in December 2020.

This latest raise was led by Portage Ventures, a global investor dedicated to supporting fintech companies, and also  included Blackfin Tech and Tallinn-based Karma Ventures.

“We see that banks are ready to move forward on their core system,” Hélène Falchier, partner at Portage Ventures, tells Sifted. “This is an experienced team with strong tech capabilities, a great product with a strong market fit and, honestly, as a core banking system it's pretty unique.”

We had clear plans, how we want to expand, how many people we need, it is pure maths. We are working in a very efficient way

Vene says the company is sticking to an approach of raising just what it needs to reach the next stage in its development.

“We had clear plans, how we want to expand, how many people we need, it is pure maths. We are working in a very efficient way. This €15m is enough to bring the company to the next level, then we will do it again,” she says.


Since 2019 Tuum has grown to a team of 70 people, the majority of them based in Estonia, with plans to double that by the end of this year.

“When we raised our seed round in December 2020, we used that money to grow our team, to enhance the product and commercial side," says Vene. “We opened our offices in Malaga and went to London. Now we have to move further and move even faster.”

Open banking’s non-revolution

When it comes to the impact of open banking, which many predicted would change the face of financial services, Vene says that the hoped-for revolution has yet to take place. “I had hoped that the impact would have been stronger; I think that the beginning has not been very fast,” she says, adding that many banks have struggled because of their old platforms.

“It means that it's not easy to open them up — many banks have done what the regulation needs, and not more,” she says.

At the same time, this leads to opportunities for Tuum and others like it, which offer banks a more gradual approach to change. Non-traditional players like retailers are also increasingly delivering financial services themselves, opening up another avenue.

Many banks have done what the regulation needs, and not more

Vene says Tuum now plans to integrate its products with other players on the market: companies offering anti-money laundering solutions, know-your-customer solutions and payment providers.

Last September the company changed its name from Modularbank to Tuum, partly to clarify that it was not itself a bank, but also to reflect its Estonian roots. “Tuum means core or heart in Estonian, and it relates very well to where we are coming from and what we are doing,” says Vene.

“You have to scale, you have to grow, to be an important player on the market.”