New Investment: Modularbank, the modular platform for seamless banking

By Bob Rode & Peter-Christian Braun Published on Dec. 9, 2020

We are excited to announce our investment in Modularbank, a Tallinn-based startup, led by and Blackfin.

Prior to meeting Modularbank, our Fintech team in the Frankfurt office had developed an investment thesis focusing on solutions enabling financial institutions to develop digital-first, customer-centric experiences by upgrading their existing legacy systems enhancing speed-to-market significantly.

We had been tracking the market segment actively throughout the year. One of our main, yet challenging, investment criteria was finding a founding team that understands the financial service industry inside out, as domain knowledge is a must-have in this industry segment.

Our first impression of Modularbank


When we met Modularbank, we were highly impressed by the experience and domain expertise of their five co-founders, who combine several decades of industry experience. They met while co-founding and working for Icefire, a technology company that designs, creates and builds digital solutions for financial institutions. Their vast know-how has profoundly shaped the way Modularbank has developed its offering.

The challenges that financial institutions are facing

At Plug and Play, we work closely with leading financial institutions. Out of the collaboration, we have seen that the two major challenges that they face when it comes to digital transformation of their core offerings are:

  • The operational shift from legacy systems to next-generation technology infrastructure.
  • The time to market of developing digital-first products.

Competition in the banking industry has been intensifying at a rapid pace. With the rise of challenger banks capturing market-share and serving clients at one-third of the cost of traditional banks, as well as the low-interest-rate environment, incumbents need to adapt to remain relevant and competitive. However, they are constrained by legacy core-banking infrastructure which does not allow for an ecosystem economy and is defined by high cost, long time-to-market, and a lack of personalization for clients. Roughly 70% of existing banks are reviewing their core banking infrastructure in order to be able to compete within the market.

Modularbank’s solution

plug and play fintech investment modular bank startup profile

Modularbank developed an API-first core banking suite offering not only the infrastructure needed to offer new digital products, but also pre-built financial products readily accessible through their Banking-as-a-Service offering. Using their product, customers can launch digital-first financial services and experiences quickly and easily. By leveraging Modularbank’s cloud-native platform, incumbents do not have to replace their legacy systems at once, but can develop new, digital-first services in parallel to their existing systems and slowly migrate to a core system.

Based on a highly modular approach, their solution covers several business functions, from Lending, and Payments to Card Management, and Reporting. Not only is Modularbank targeting incumbent banks and financial institutions, but also players from other industry verticals.


With their industry expertise, leadership, and customer-centric offering, we are confident that Modularbank will help countless financial institutions shape the future of banking and are excited to work together with them on future projects.

To learn more about Modularbank and our Fintech activities in Europe, sign up for Fintech Europe’s Expo, taking place in January 2020.

Check out the official press release of Modularbank’s investment announcement.