Ohpen, a Dutch FinTech company providing cloud-based core-banking software successfully closed a €25 million Series C round. Private equity firm Amerborgh led the latest round as a returning investor, bringing Ohpen’s total equity funding to €40M to date. Ohpen plans to use the funding proceeds to expand operations in a third market, preferably Germany, France, Canada, Australia or the United States of America.
It was in July last year that Ohpen raised €15M Series B investment at a valuation of €100 million. The company is one of the fastest growing FinTech startups from the Dutch Fintech space. It has secured long-term outsourcing agreement with SNS Bank N.V. The company will also deliver cloud-based BPO banking solutions to ASN Bank, BLG Wonen, RegioBank, and SNS.
Amsterdam has always been and remains the FinTech Capital of the world… Ohpen raises $25M to expand outside of NL https://t.co/qUbhe0NEAZ
— Kellogg Fairbank (@kelloggfairbank) February 3, 2018
Ohpen’s value proposition
As covered in our previous news article, Ohpen offers core banking modules of savings, current accounts, pensions, and wealth management. The biggest value proposition it offers to its customers is eliminating the need to have on-premise legacy technology which is often difficult to upgrade. The legacy systems often end-up twisting the code which results in maintaining an ‘army’ of maintenance and integration resources just to keep the system operational.
Ohpen allows banks to eliminate CapEx-heavy (capital expenditure) IT projects in favor of much leaner and faster ‘cloud-based’ core-banking software. The customers are no longer needed to run data centers and buy costly proprietary software or to get locked in multi-year service agreements. According to Ohpen’s estimate, its customers save as much as 40% of operational costs just by migrating customer accounts into the cloud.
“Ohpen is changing the core banking software industry, advocating a totally digital solution that is based on one version of the platform for all clients and countries. This has never been done before: it requires creativity, commitment and also the necessary capital to implement our vision,” said says Ohpen Founder and CEO Chris Zadeh.
SAP also wants a share of pie
Ohpen’s latest funding (which has reached €40M) and its valuation indicate towards a much bigger and broader wave where enterprise clients are turning towards cloud-based IT systems or hybrid systems (a mix of cloud and on-premise software). It is this trend that has made SAP, the European enterprise software giant to target the US market for its core banking system. Last year, it secured Branch Banking & Trust (BB&T) as its first core banking software customer in the US following a multi-year effort to find a customer. It indicates that Ohpen might have found its ‘true north’ given established software behemoths are also moving in the same direction.
Below, Ohpen’s CMO Angelique Schouten explains how operating out of Netherlands does pose some challenges such as a shortage of IT talent, however having a shared mission helps Ohpen source the best talent that Amsterdam has to offer.
How might it play out?
Will Ohpen be vying for the same business overseas as that of SAP? Or will it avoid competing with the European software giant in the US market just to gain more customers elsewhere?