18 June 2024

Danish Fintech startup Monthio secures €10M to fuel international expansion

image Photo: Monthio

Monthio, a Danish open finance startup, has raised fresh capital in a new investment round led by the Export and Investment Fund of Denmark. The money will primarily be used for further expansion into European markets.

Monthio has developed a product that traditional banks and other financial institution use to automate data collection and analysis for mortgage loans and other types of financing for private customers. The company already boasts a customer list including many major Nordic banks, but this new round of investment will move it closer to becoming a European leader in the field.

While legacy banks are eager to offer more seamless experiences for their customers, outdated technology stacks and high regulatory requirements make it hard for them to properly innovate in this space. This presents a real conundrum for the banks, as they are preparing to service a new generation of banking customers who increasingly expect banks to offer customer experiences that are on par with what they’re used to from e.g. big tech. Monthio wants to alleviate the banks from this headache, as their product can enable a bank to completely revamp their customer experiences with little to no code needed to be written.

Without Monthio, a bank customer applying for a mortgage might be expected to manually provide up to 10 different documents that they themselves have to fetch or even create. With Monthio, the bank is able to create a digital application that collects all relevant data from the customer in as little as five minutes. Among other things, this includes information about the customer’s wealth, income and consumption patterns.

At the moment Monthio is primarily used for credit assessments, but the product is relevant in a number of different banking products, such as investments, retirement planning and much more. In addition to providing better customer experiences, the streamlined application process also has the potential to heavily reduce the operational costs related to processing the applications.

Monthio's clients include Danske Bank, Nordea and Klarna, but their software is also used by car financing companies and mortgage banks. Fresh capital is now set to support the company as it scales. "We are incredibly proud to have completed our capital raising process," says Mads Aarup Pedersen, Monthio's co-founder and CEO. "It's a huge testament to our team's innovative work and focus on quality. With this new capital, we can accelerate our growth and continue the journey of delivering pioneering data solutions to our customers in the financial sector."

Monthio’s product is enabled by Open Finance, a movement towards the liberation of financial data, allowing customers to share their financial data with third parties like Monthio. When it comes to digital sources of financial data, Denmark is definitely at the frontier. With a few clicks, Danish citizens are able to share their tax data, title data and banking data with relevant parties. This inspired Monthio to create a solution that enables legacy banks to take advantage of all of this data to improve their customer journeys and streamline internal processes. Now that this has been proven to work in Denmark, it’s time to export the idea to other European countries. Monthio is one of the few European suppliers that are currently able to meet the high regulatory demands of the financial sector, giving it a leg up against other companies in the space.

The Export and Investment Fund of Denmark is leading this investment round of DKK 75 million, with participation from Swedish investment company Harmar AB, which was founded by former EQT partner Harry Klagsbrun.

The owners and the board of directors include a number of significant figures in this area who have extensive experience of the financial sector.

According to Jacob Bratting Pedersen, partner and head of Tech & Industry at EIFO, the investment in Monthio is an expression of EIFO's increased focus on growth investments and maintaining future Danish export successes.

"Monthio contributes greatly to Denmark's strong position in fintech, and with a market-leading platform to support automated credit ratings in financial institutions, the company is strongly positioned to become a winning player in the field," he says. "EIFO contributes venture capital to the growth companies of the future, and Monthio is a great example of a company that can become a Danish beacon within core infrastructure for the financial sector in Europe."