Stockholm-based startup Atlar raised a $5 million (€5 million) seed round led by Index Ventures. The company has been working on an application programming interface (API) that facilitates bank-to-bank payments for European businesses.
In addtion to Index Ventures, La Famiglia VC, Cocoa and various business angels also participated in the round, such as Revolut CFO Mikko Salovaara, former EVP of global sales at Adyen Thijn Lamers and N26 CFO Jan Kemper.
While European consumers are already quite familiar with open banking and payment initiation, a lot of B2B transfers are still processed manually. Business banking hasn’t experienced the same level of innovation when it comes to payments.
And yet, corporate banks already offer ways to initiate payments without having to connect to a web portal and upload a spreadsheet. But banks don’t necessarily run modern REST APIs. They expect a text file formatted in a very specific way on an SFTP server.
If you have a development team, they could build a custom integration. But many companies simply don’t have the resources to maintain these connections. They would rather pay a partner to handle all the technical details.
Atlar provides a modern API that hides all the complexities involved with bank connections. Once a company uses Atlar, it can trigger transfers, reconcile transactions and process direct debits through Atlar’s API directly.
In particular, Atlar can be used for payouts, insurance premiums, deposits and loan payouts. Companies that operate across multiple European countries likely have multiple bank accounts. That’s why automating payments could be a nice upgrade for those businesses.
“Accepting payments as a business is pretty painless now, but initiating them with your bank is still agonisingly slow and manual,” Atlar co-founder and CEO Joel Nordström said in a statement. “This is why Atlar is on a journey to becoming the operating system for bank-based payments. By creating a new category, we hope to unleash a wave of innovation for our clients which will ultimately benefit European consumers and businesses.”
In addition to Joel Nordström, Joel Wägmark and Johannes Elgh are the two other co-founders. They were all working at Tink, the open banking company that was acquired by Visa for $2.2 billion.
Atlar competes with Numeral, a French startup that I covered earlier this year. So far, Atlar focuses on the Nordics, Germany, Austria and Switzerland. Today’s funding round will be helpful when it comes to European expansion.