London based startup Griffin raises £3M seed round to build the fully regulated banking platform of choice for the next wave of fintech. Griffin aims to make it easy for any business to build and launch financial products on its proprietary API banking platform.
- Non-bank financial services companies have a hard time finding banking partners due to poor technology offerings and lack of appetite from major banks.
- Griffin plans to disrupt this space by offering bank accounts and payment services via its API platform, with a focus on client money and safeguarded accounts. The firm will be applying for a bank license with the UK’s regulators, the PRA and FCA.
- £3M seed round from leading venture capital firms Seedcamp and Tribe Capital, and angels including the founders of Indeed.com.
LONDON, JANUARY 31 2020: Access to banking infrastructure is critical for fintech startups. In order to ring-fence their customers’ funds, they often have to endure lengthy and expensive onboarding with traditional banks.
Griffin is on a mission to be their banking partner of choice – one purpose-built to help them succeed. By providing an API platform enabling firms to open ringfenced accounts for customer funds with a built-in compliance engine and ledger, firms can get their financial products to market quickly and cost-effectively.
“We’ve seen first-hand how punishing the current onboarding processes can be for fintech startups.”, says Seedcamp partner Tom Wilson, whose firm also led Griffin’s 2018 pre-seed round. “It’s affected a lot of the firms in our portfolio, and we’re excited to be backing a company that has a serious plan to solve that problem.”
Griffin wants to enable their customers to leverage a built-in risk and compliance engine to get set up in days rather than the current industry average of six months.
The company was set up in 2017 by David Jarvis and Allen Rohner. Jarvis was an early engineer at API banking startup Standard Treasury, and Rohner co-founded developer tools company CircleCI before going on to help Funding Circle with its ledger technology. The two met while working together at CircleCI in 2014.
Griffin’s team includes experienced bank executives Rupert Whitten (COO), Sam Perera (CFO), and Tim Davies (CRO). John Weguelin, former CEO of Zenith Bank and the European Islamic Investment Bank, has joined as Chairman.
“With David and Allen’s technology background and the others’ banking experience, this is one of the strongest teams I have ever seen”, says angel investor Paul Forster, who co-founded jobs website Indeed.com and has taken a seat on Griffin’s board. “They’ve successfully set up and run new banks and new tech companies, putting them in an ideal position to deliver on this ambitious vision.”
Griffin is taking aim at incumbent banks’ legacy tech, which results in high ongoing expense and needless complexity for the firms on their platform. Griffin’s customers can look forward to a built-for-purpose API that will sit on top of the company’s new core banking system. The API platform emphasizes simplicity over the box-checking enterprise bloat commonly seen with other banks’ technology platforms.
Griffin intends to enable the creation of individually segregated accounts for each of their customers’ clients, rather than simply offering a single pooled account and requiring the bank’s customers to maintain their own ledger.
“One of the biggest pain points we’re looking to solve on day one will be enabling our customers to offer each of their clients a dedicated bank account.”, says co-founder and CEO David Jarvis. “That means no more having to refund transactions from your pooled account because you can’t figure out which customer account it was supposed to go to.”
The newly raised capital will support Griffin in building out its core banking system as well as providing sufficient runway to fund the authorisation process with the UK’s banking regulators, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).
As the fintech sector grows and as more non-financial companies seek to offer their own branded financial services products, the need for a technology-enabled banking partner in this sector is becoming ever more critical.
“We’re heading towards a world in which almost every major brand is going to want to offer a strategically important financial services product”, says Jarvis “But it won’t make sense for most of them to become banks themselves. And that’s where we come in.”
- Planned core offerings:
- Business bank accounts for fintechs and financial services companies.
- Regulated client money bank accounts (used by CASS firms)
- Safeguarded bank accounts (used by Payments and Electronic Money Institutions)
- Other notable investors:
- Paul Forster and Rony Kahan (founders of Indeed.com)
- Paul Townsend and Phil McGriskin (founders of Vitesse PSP)
- Charlie Delingpole (founder of MarketFinance and Mimiro)