On EQT Ventures’ investment in Griffin, building an API-first Banking Platform

A key theme for EQT Ventures over the last few years has been fintech infrastructure — mission critical software that will enable the next wave of growth and disruption in financial services. Thus our investments in Banking Circle, Token, and Cytora. Timing for this wave couldn’t be better:

1) Fintech has grown extremely fast in the past decade (reaching $44bn in global funding in 2019, 9x vs. 2010), and we don’t see any signs of growth slowing down.

2) Consumer brands have now begun to launch financial services (e.g. Apple, Uber).

3) Embedded finance is just getting started — financial functionality becoming a native component of the stack (both technology stack and as a business model).

Within the fintech stack, we believe there is huge opportunity and value to be accrued at the Banking-as-a-Service (“BaaS”) layer. What do we mean by “BaaS”?

Non-bank financial services firms work with their customers’ money as part of their business, and regulators require that money to be held in a segregated account at a bank. To accomplish this you either need to become a bank , which is costly and timely, or you need to work with a “banking partner”. However, banks weren’t built to deliver this service — it’s not strategic for them — which makes starting a fintech slow, risky and expensive. You’re left dealing with compliance, regulation, validation, ledgers and transaction monitoring. That’s a problem!

Enter Griffin — a Banking-as-a-Service platform that enables fintechs and brands to launch fast and cost-effective financial services. Griffin is seeking their own banking license while building out a platform that you can build on top of, taking care of compliance while minimizing technical complexity and regulatory friction in the process.

As a result, clients will be able to get a dedicated account for each customer, seamless onboarding and radically improved speed to market. This is a game changer for delivering financial services.

We’ve been following BaaS very closely and Griffin has the raw ingredients to be the winner in this space. It’s unique approach bundles three things that used to be separate:

1) automated compliance, 2) a ledger and 3) a focus on trying to become the actual bank. Together with this they’re developer-first, focused on fintechs, and their founding team has incredibly strong founder-market fit.

The founders — David Jarvis (CEO) and Allen Rohner (CTO) — moved to London from the US to pursue this vision, and have hyper-relevant backgrounds: both founders have more than a decade of experience working in infrastructure technology companies in Silicon Valley.

Prior to founding Griffin, David was an early engineer at API banking startup Standard Treasury. Allen is a co-founder of developer tools company CircleCI and has worked with Funding Circle on its ledger technology.

As a result of our conviction on the team, approach, and overall market opportunity, we’re excited to announce we’ve led a £6.5m round in Griffin together with top venture funds and angels: Seedcamp, Tribe Capital, Paul Forster (founder Indeed.com), Matt Robinson (founder Go-Cardless/Nested), and Carlos Gonzalez-Cadenas (COO Go-Cardless) amongst others.

A special shout out to the Motherbrain team who’s tech helped us source this deal! Add another one to the list…