Estonia-headquartered banking platform Modularbank has raised €4m (£3.6m) in seed funding to expand its product into the UK and Europe.

The firm’s core banking platform, built with an API-first approach, allows banks, financial services companies and business to integrate its modular banking technology into their existing infrastructure.

The funding will initially be used to set up commercial operations, including an office in the UK, and to increase operations in France, DACH and Southern Europe from Modularbank’s European base in Berlin.

The company currently has 35 staff across Europe and aims to increase headcount to 100 by the end of 2021.

In particular Modularbank will be looking to make further hires to its product and commercial teams, to accompany those who have recently joined the company from the likes of PayPal, Mambu and ICBC.

The seed round was led by Karma Ventures and BlackFin Capital Partners, with additional support from Plug and Play Ventures, Siena Capital and angel investor Ott Kaukver, who is the ex-CTO of Twilio and Skype.

Since it was founded in 2019, Modularbank reports it has been cashflow positive  and has gained a list of influential customers, including one of the largest financial services groups in Finland. It has also recently partnered with Nets, one of Europe’s largest payment card processors.

Commenting on the funding, Modularbank CEO Vilve Vene said: “Increasingly, people are demanding more flexible and convenient services that fit around the way they work and live and in response, there is a wave of digitalisation and embedded finance on the horizon, beginning to build.

“To harness this momentum there is a real need for lean, yet sophisticated core banking technology and that’s where Modularbank comes in, as we do exactly that. Modularbank was set up to enable banks and other customer-facing businesses to devise and roll out personalised banking services quickly and easily.”