HSBC, Goldman Sachs, Australia’s ANZ (ANZ.AX), Investec (INVP.L), and the venture capital arm of Banco Sabadell all took part in the funding round. Lord Stanley Fink, the former CEO of hedge fund Man Group (EMG.L), and 9Yard Capital, the venture capital firm advised by former UK chancellor George Osborne, also backed the business.
Bud was founded in 2015. The platform allows banks to integrate other company’s products and services into their own apps and websites.
“We were expecting and seeing a shift in the market from a traditional ‘I serve my customer my products and I build an experience around that’ to actually ‘how do we go beyond that and create a very customer-centric service model?,'” Ed Maslaveckas, the CEO and cofounder of Bud, told Yahoo Finance UK.
He drew a comparison to Apple (AAPL), which allows customers to buy other people’s apps through its app store.
“A lot of their story and their shift was, they’ve got huge scale, a scale that anyone would kill for, but now it’s really about proliferating digital services,” Maslaveckas said.
“The banks, with their scale, are starting to think: We’ve got a whole bunch of customers, if we can serve them great enriched digital solutions we can actually deepen that relationship and actually change that model slightly.”
Bud’s technology takes advantage of opening banking regulation introduced in Britain at the start of 2018. The regulation means financial companies have to share customer data with other companies if the customers agree to it. The rules also let companies execute transactions on behalf of customers, again if they agree to it.
Open banking paves the way for features such as being able to pay your gas bill directly from your banking app or check your bank balance within Amazon.
“When I first worked at Man Group, most people hadn’t heard of a hedge fund and those who had really didn’t understand what they did,” Lord Fink said in a statement. “I believed in the disruptive potential of that model back then and I have a similar belief in the potential of open banking now.”
Bud has been working with HSBC since 2017 and last year launched an app that allowed customers to see all their bank accounts in one place. The two companies are working on a new product due for release later this year, Maslaveckas said.
“The majority of the funding is around building out the team in the UK to deploy to millions of customers through our banking partners,” he said.
Bud, which employs 75 people, is currently working with 85 companies, including insurer Hiscox and stockbroker AJ Bell.
“The second part is, look, we see the market opportunity for open banking being a global one,” Maslaveckas said. “I can’t say specifically but regions, certainly Europe by the end of this year. Obviously we have an Australian bank investing in us. The open banking mandate there happens in 2020.”
Maslaveckas declined to comment on Bud’s valuation in the fundraising, which is an unusually large “Series A” investment (the first round of institutional investment in a startup).
“We want to grow the company as much as we can,” he said. “Of course we want to be a unicorn, but what we need to do this year is focus on how we can help millions of consumers use our platform. If we can prove it at scale, then the valuations will come.”
Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.