Karma Ventures co-led the €4 million investment to Estonian fintech startup Modularbank. EstVCA DEAL TALKS meets Marili Merendi, the VC Principal of Karma Ventures to hear more about the investment.
1. What makes Modularbank unique?
From our multiple reference-calls with Modular's customers, it was made clear that the platform comes out as superior in the technical evaluation against its well-known competitors. This makes Modular's value proposition a very strong one in the market where the technical and regulatory requirements are one of the most rigorous. Deep dive into the team's decades-long engineering background and sophisticated customer problem understanding only reassured Karma's desire to partner up with them. Together with Karma joined also a fintech-focused European fund BlackFin Capital Partners alongside Plug and Play Ventures, Siena Capital, and Ott Kaukver.2. How is the investment used?
The team is aiming to set up its commercial operations in the UK and expand its operations in the DACH region. A clear focus will be on continuing the product development together with strengthening the commercial team, where the recent hires from the companies such as PayPal and Mambu, are good examples of the Modular team's ambitions to populate its senior roles with the most competent in the field. Furthermore, in order to achieve its ambitious goals, the team has laid out a plan to triple its team from the current 35 people over the coming period.3. Impact and diversity
Probably the most interesting part is the team's strength in terms of the diverse experience, know-how, and character they bring together. This is the type of power that equips them with the energy and passion required for producing a world-class enterprise solution for a very sophisticated clientele such as financial institutions are. Key advisors of the deal
The deal was supported by two of the Estonian leading law firms - Ellex Raidla
. Furthermore, the major finance and fintech global executives were involved in helping to validate the technology depth as well as the Modular's positioning in the market to pave the way for scaling the business.