Square Peg Capital has led Australia’s largest ever seed-round, $32 million for banking software developer Constantinople.
AirTree Ventures and Credit Union Australia business Great Southern Bank have supported the round.
While Square Peg has only just announced the investment, it is believed co-founder and partner Paul Bassat and principal Lucy Tan led the deal about 12 months ago.
Great Southern Bank will be the first client to use Constantinople’s platform, a software-as-a-service offering which provides all the back-office services required to support personal and business banking. The software, which is hosted in the Amazon Web Services (AWS) cloud, is currently in live pilot mode at the bank.
Constantinople’s product suite includes mobile and web apps, transaction and savings accounts, payments, debit and credit cards and a range of secured and unsecured lending products. The products embed essential know your customer (KYC) and anti-money laundering (AML) requirements to ensure legal compliance.
Major banks around the world have committed millions of dollars to transforming legacy manual systems to digital processes sponsoring the development of bespoke systems or committing to external providers but the founders of Constantinople are not aiming to break into that market. They recognise that there is a long tail of smaller regional banks and credit unions that cannot afford similar levels of investment and do not have the technological capabilities to manage the required change processes. At the same time, these institutions are on the front line in facing direct competition from new digital banking businesses. This means these businesses represent a highly motivated market for an off-the-shelf entire back-office digital banking product.
Constantinople’s founders, Dianne Challenor and Macgregor Duncan are both former Westpac executives so have deep domain experience. Challenor was Westpac’s managing director for global transaction services for five years up to 2021. Over the same period, Duncan was Westpac’s chief development officer responsible for strategic investments, partnerships and running Westpac’s digital banking operations. Both became board members of 10X Banking, a digital banking systems developer in which Westpac invested in late 2019.
Constantinople already has around 60 staff, mostly software engineers, and is continuing to build at an incredible pace, according to Square Peg.
Image: Constantinople founders Macgregor Duncan and Dianne Challenor.