Thought Machine raises an extra $42m to bring Series B funding round to $125m

Thought Machine said the funding will be used to recruit key hires and help global expansion.

Thought Machine has raised an extra $42m (£33m) bringing its total Series B funding round to $125m (£97m).

The funding round comes amid expansion plans at Thought Machine and features new investors.

Eurazeo Growth, the equity arm of European investment company Eurazeo, led the additional funding raise, with British Patient Capital, the VC arm of the government-owned British Business Bank and SEB, the Norwegian financial services group which is a Thought Machine customer, also coming on board as new investors in a funding round which officially closes in August.

The initial $83m of the Series B funding round was completed in March this year led by Draper Esprit with investment from Lloyds Bank Group and IQ Capital.

Thought Machine, headquartered in London, will use the funding to invest in local expansion, including recruiting key staff in APAC, US and Australia as well as developing new products.

Thought Machine was set up in 2014 by former Google engineer Paul Taylor and its clients include Lloyds Banking Group, Atom Bank and Standard Chartered, which use its cloud banking platform Vault.

The funding round follows Thought Machine scaling up, recruiting 100 employees in the first two quarters of 2020.

In total, Thought Machine is looking to add 150 staff to its headcount this year, primarily with new engineering roles based around its London head office.

By the end of 2020, Thought Machine expects to reach a headcount of over 500.

Taylor said: “The prospect of transitioning to cloud native technology is now at the forefront of every major bank’s roadmap."

“Plans have been hastened in the wake of regulatory pressure, economic uncertainty and the need to manage cost-income ratios.”

“We are delighted to partner with Eurazeo Growth, British Patient Capital and SEB, which demonstrates ongoing investor interest in our technology and the significant market opportunity we are addressing.”

Zoe Fabian, managing director, Eurazeo Growth, said: “.Our investment in Thought Machine demonstrates our belief in the technology Paul and the team have been building and the importance of cloud native technology for the finance industry”

“Banks around the world are undergoing a fundamental digital transformation while moving to the cloud in response to increasing regulatory complexity, more sophisticated customer needs and growing competition from new entrants.”

“Fintechs are maturing to position themselves meaningfully in the value chain.”