Venture capital Lightspeed Ventures, Founders Fund and PayPal founder Max Levchin’s SciFi VC have joined forces to back banking API provider Teller’s new funding round.
Teller was originally founded in the UK, but has relocated to the US. Now it plans to use the money to take on Plaid, the API provider connecting customers’ financial data to apps which was bought by Visa in a $5.3bn deal in January.
Stevie Graham, CEO and co-founder of Teller, has argued that his startup’s product is better because it does not rely on screen scraping, the process of collecting screen display data from one app and translating it so that another app can use it.
“We are also better because we have the incentive to really care about our users and mean it,” Graham told TechCrunch. “Plaid has rolled up the market by buying Quovo and is now effectively a monopoly. Speaking to users we found a lot of frustrated Plaid customers that didn’t feel as if Plaid was sympathetic when things went wrong. For example their Capital One integration has been down for months. Maybe the Plaid folks genuinely can’t fix it, maybe they don’t have truly enough competition to care. Either way, our Capital One integration works great.”
Speaking of the move across the pond, Graham stated that the move was motivated by a desire to tap into the bigger US market and to avoid getting caught in the sluggish bureaucracy of the EU’s regulators.
“PSD2 was also a factor in our decision to withdraw from the UK,” the Teller CEO said. “Primarily because it made practically every use-case of banking APIs a regulated activity, meaning that it’s no longer possible to quickly build and test a product without first spending thousands of pounds and [three to six] months getting FCA approval. When we checked at the end of 2018, less than 100 entities had been granted approval. We can not build the business we want with a total addressable market of 100 customers.”
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