Modularbank raises €4 in late seed funding from Karma, BlackFin

By Sunniva Kolostyak

Tallin-based core banking platform Modularbank has secured €4 million in late seed funding in a round led by Karma Ventures and BlackFin Capital Partners, aiming to expand into the UK and Europe.

The platform provider is using the funding to set up commercial operations in the UK, strengthening its engineering and product teams. It is also gearing up for wider expansion through its Berlin office with increased operations in France, DACH and Southern Europe.

The €4 million was raised from Karma Ventures and BlackFin Capital Partners with additional support from Plug and Play Ventures, Siena Capital and angel investor Ott Kaukver, the ex-CTO of Twilio and Skype.

Commenting on the funding round, Modularbank CEO Vilve Vene said people are demanding more flexible and convenient service, and in response, there is a wave of digitalisation and embedded finance on the horizon.

“To harness this momentum there is a real need for lean, yet sophisticated core banking technology and that’s where Modularbank comes in, as we do exactly that. Modularbank was set up to enable banks and other customer-facing businesses to devise and roll out personalised banking services quickly and easily,” Vene said.

The cloud-agnostic and API-first core banking platform allows banks, financial services companies, and any other business such as retailers, utility companies or telemedicine providers, to integrate its modular banking technology into their existing infrastructure. Using Modularbank, they can roll out innovative financial services which reflect customers’ specific needs and ambitions, and boost sales and enhance customer loyalty.

Margus Uudam, Founding Partner at Karma Ventures said: “Our reference calls with tier 1 banks and FinTechs confirmed that Modularbank is unrivalled among its competitors, in terms of substance and depth of understanding of customer needs around core banking. The team has been building core banking solutions for more than twenty years and is incredibly well-positioned to become the next global leader. The traction they are already seeing from customers is just another proof point of the huge potential for Modularbank. The investment round was a very competitive one for a reason.”

Michele Foradori, Investment Director at BlackFin Capital Partners, said: “From our very first meeting with Modularbank, we had no doubt that this was the team with the right mix of motivation, capabilities and experience to build a successful company in the financial software landscape. Later in our investment process came the confirmation: an elegantly designed cloud-based core-banking platform which, in less than 24 months of development, is already ahead of many competitors. At BlackFin, we are very proud and eager to be sitting next to Vilve, Rivo and the other co-founders on their journey to become the new standard in banking core software.”