London, UK. & San Francisco, California. 20th July 2021: Ntropy, a company removing data barriers to understand financial transactions, has announced a $3.2M seed round led by QED Investors, who has previously invested in fintech unicorns Nubank, Klarna, and Current. Ntropy’s API enables businesses to convert raw data into contextualised and structured information understood by both man and machine.
January Ventures also participated in the investment round, along with founders and executives from Ramp, Square and Stripe. Ntropy has also added Eric Woodward, former Group President of Early Warnings, and Robert Phillps, author of Pricing Credit Products, and currently Director of pricing research at Amazon, to its advisory team.
The funding will be used to hire key engineering and commercial talent, to support market growth and future product development. The remote-first team is split across the UK, USA, Norway, France and more, and is predominantly serving customers in North America.
Co-founded by CEO Naré Vardanyan and CTO Ilia Zintchenko, Ntropy believe that turning data into leverage rather than a barrier is a game changer in financial services. While in recent years open banking and other financial regulations have made data more accessible, the problem of understanding this data to create real value remains largely unsolved. The Open Banking Market alone is expected to be worth $43.15Bn by 2026*.
These data powers decisions from credit scores to loan agreements and enables a variety of financial products that impact lives. Ntropy saw an opportunity to provide a developer-first and scalable platform that helps businesses make sense of their transaction data, for customers to benefit from in the future.
Naré Vardanyan, CEO and Co-Founder of Ntropy, commented, “We talked to over 150 companies across the UK and the US when we started Ntropy, and everyone was struggling to make sense of their transaction data, even though they are paying a lot to access it”.
“Over the last 20 years, the main way to monetise on the internet was manipulating your users’ data for advertising and targeting. But this is changing. Embedded fintech is enabling business models based on a direct exchange of value, where customers can get, make, share, lend, and invest money directly on the internet. Hence data is turning from a passive source of information for targeting, into a source of leverage to create delightful customized products. At Ntropy, our “no-data'' APIs mean that no company needs access to raw data, we give them the ability to build directly from the information they need to create products and power decisions.”
Amias Gerety, Partner at QED Investors, added, “When we met Ntropy, we could tell they were onto a big idea -- carving a new path for machine learning and data privacy to coexist. When we invested, it was because the team could turn their tech into tools that help solve acute problems we've seen across our fintech portfolio. We made seven introductions to our companies and not only did all seven of those companies tell us that they’d be interested in testing, but two other companies in our portfolio heard about Ntropy through other channels and got access to Ntropy’s sandbox.”
Jennifer Neundorfer, Partner at January Ventures, added, "Fintech is no longer a standalone industry - embedded fintech enables new business models for almost any company across every industry. Ntropy's data platform is the foundational layer upon which these business models are built, and the company's opportunities are massive. The Ntropy team has the unique combination of deep technical expertise coupled with commercialization savvy - the customer demand speaks for itself."
Ntropy’s platform trains machine learning models across organisations with different data schemas and data sensitivity issues, to remove barriers and make data an easily understandable tool. Its API takes raw transactions across platforms and extracts merchant information and labels it. It is the only provider of auto categorisation, recognising that each business has its own unique way of thinking and will have their own taxonomy of labels used for transactions.
Ntropy’s suite of products are now being used by neo-banks, financial SaaS providers, marketplaces and SMB banks. Ntropy currently has a waitlist of over 50 customers in the US, which is growing at a rapid pace. Moreover, startups they started working with in the course of the last year, are turning into unicorns crossing the billion transaction volume mark, indicating the massive demand for fintech and the incredible growth of the sector through the pandemic and beyond.