Latvia’s free open banking and data insights API Nordigen has raised €2.1 million in a funding round that saw participation from Black Pearls VC, Inventure, Highgoal Capital, ID4 Ventures, Superangel, Calchas Holding, and Angel Investors Artis Kehris, Henry Nilert, Gerri Kodres, and Riivo Anton.
Founded in 2016 by Roberts Bernans and Rolands Mesters, Nordigen is a free open banking API that provides PSD2 data connections to all major European banks. These connections are a fundamental ingredient, and used by, just about every bank, lender, and fintech. And while not the only firm on the block providing this service, the differentiator here is that Nordigen offers it for free.
“It's time to wipe out screen scraping in Europe. It's expensive and hacky. Banks have built amazing APIs to let people migrate their account information securely and without friction. Nordigen allows developers to connect to these bank APIs for free,” says Mesters.
So if Nordigen is just giving the service away, one that is free under European banking laws, but still charged by industry players including Tink, what’s the business model?
The revenue arrives via paid access to data analytics and insights.
“Access to banking data is becoming a commodity and Nordigen is also creating the next valuable layer by turning fragmented financial data into usable information for various types of financial institutions,” comments Aleksander Dobrzyniecki, Partner at Black Pearls VC.
After partnering with Tink and experiencing fees firsthand, Nordigen decided they could do things better, flipped the switch, and opened up the API for free. And the industry has taken note. Within the first four months, Nordigen has quadrupled the number of API users coming through their doors.
“We integrated more banks in the last six months than Tink managed in a whole year. Having less legacy technology to maintain means we can move a lot faster.” concludes Mesters.