Finbourne raises USD 70 mln to advance AI data solutions in finance

Finbourne will use its USD 70 million in funding to expand its reach outside of the Square Mile. Highland Europe and AXA Venture Partners (also known as AVP and backed by the eponymous insurance giant) are co-leading the Series B, which values the company at just over GBP 280 million (USD 356 million) post-money.

From RBS collapse to Finbourne

The CEO of Finbourne shared that the idea for the startup emerged after many years of working as a senior quant in the city, mostly at the Royal Bank of Scotland. In 2008, RBS, then one of the world’s largest banks, faced a dramatic collapse due to overexposure to the subprime lending contagion, leading to a major internal reorganisation. The bank had been structured in business silos, affecting both operations and data management, which was expensive to maintain. This crisis necessitated cutting hundreds of millions in costs rapidly.

Finbourne’s CEO explained that his team adopted a model from the rapidly growing cloud services sector, inspired by AWS. They took a consolidated and federated approach to data storage and usage, building technology that worked across all asset classes. This shift enabled them to develop better, more scalable technology, unifying previously separate systems for equity, fixed income, and credit onto a single platform.

Finbourne may have its roots in how its team met the challenge of building more efficient data services at their bank, but it’s also evolved the idea, reflecting and shaping how financial services companies buy IT today. Just as companies that have extensive sales operations might use Salesforce or a competing platform rather than building their own software, Finbourne’s bet is that financial companies will increasingly do the same: work with outside companies for tools to run their operations rather than building their own. That is also dovetailing in how banks approach AI tools.

Finbourne’s offering

Finbourne’s products include the LUSID Operational Data Store; investment and accounting books of record (used in asset management analysis); a portfolio management platform that tracks positions, cash, P&L, and exposure; and a data virtualisation tool. The company is also helping manage how businesses handle their data for training models, an area where it’s likely to get more involved.

Finbourne concluded that there is no clear leader in its market, and banks are reluctant to share data with each other, opting instead to train models that prevent data sharing. This approach helps customers maintain tighter control over results and reduce errors. Open source offers flexible options for end users. Finbourne faces numerous competitors, including Aladdin by BlackRock, SimCorp, State Street Alpha, and others. Many companies, such as Fidelity International and the London Stock Exchange Group, prefer the simplified approach of working with a single provider to manage their data needs.