Somewhere in the warren of every major bank's IT department sits a chief technology officer staring at a budget that would make most startup founders weep with envy—and roughly 70% of it goes to keeping ancient code from catching fire.
That paradox has been the banking industry's open secret for years. Now a Tallinn-based platform called Tuum thinks it's cracked the migration riddle that's stumped institutions for decades, promising to swap out legacy core banking systems in as little as eight weeks. The company just raised €25 million (about $26.9 million) in Series B funding to prove it at scale.
CommerzVentures, the fintech arm of Germany's Commerzbank, led the February 6, 2024 round. Speedinvest joined, alongside existing backers Karma Ventures, BlackFin Capital Partners, and Portage Ventures. Five weeks later, Citi Ventures quietly added a strategic follow-on investment—the kind of vote of confidence that matters when you're promising to rip and replace the beating heart of a financial institution.
The Maintenance Trap
Industry data, frequently cited by Citi Ventures and others, pegs that 70% figure as gospel: banks burn seven of every ten technology dollars maintaining systems built when COBOL was cutting-edge. What's left—call it 30% on a good day—funds the digital channels, AI experiments, and embedded finance plays that customers now expect as table stakes.
It's a budget death spiral. Legacy infrastructure grows more brittle with age, demanding more care and feeding, which leaves even less room for the innovation that might generate new revenue. Repeat until a cloud-native challenger eats your lunch.
Tuum's answer is what it calls "progressive migration," a modular approach that targets specific banking functions—accounts, payments, lending, cards—and replaces them piecemeal rather than in one catastrophic switchover. The platform is API-first and cloud-agnostic, designed to slot into environments running on AWS, Google Cloud, or Microsoft Azure without requiring customers to pick a side.
The company says complex implementations can finish in two months. Seven months is more typical, though still a fraction of the multi-year timelines that have historically defined core banking overhauls. Whether that holds up under real-world pressure remains an open question—banks aren't known for moving fast, and migrating live customer data is the kind of high-stakes operation that turns CTOs gray.
A Market Sized Several Ways
CommerzVentures, announcing the investment, pointed to a core banking software market exceeding $15 billion in annual spend. Citi Ventures, in its own analysis, estimated 2023 market value at roughly $10 billion, with projections hitting $50 billion by 2032. Fortune Business Insights splits the difference, pegging 2024 at $16.8 billion and forecasting $65 billion by 2032—an 18.6% compound annual growth rate if the numbers hold.
The variance matters less than the direction: legacy replacement is no longer a nice-to-have. Regulatory pressure for operational resilience is mounting. Customer expectations, shaped by apps that update weekly and fintech interfaces that don't look like they were designed during the Clinton administration, are forcing the issue.
Tuum's revenue grew at a compound annual rate exceeding 250% over the three years leading up to the Series B, according to materials released with the funding announcement. For a company selling into notoriously cautious financial institutions, that's either a sign the pain point is acute or early adopters are exceptionally desperate.
One Bank's Leap
LHV Bank in the UK offers the closest thing to proof of concept at scale. In a case study published by Tuum and the bank, LHV migrated millions of customer accounts in under two months and processed 47.7 million transactions in the first year post-switch. Andreas Kitter, an LHV UK executive, said the migration freed up 75% of the bank's IT budget for innovation work—exactly the promise that makes Tuum's pitch resonate.
The implementation won both companies an IBSi Global FinTech Innovation Award for Best Core Banking Implementation in December 2024. Awards are marketing gold in the enterprise software world, but they also signal that competitors and analysts are paying attention.
Still, one successful migration doesn't make a repeatable playbook. LHV is not JPMorgan Chase, and the complexity curve gets steep fast once you're dealing with sprawling product lines, regulatory jurisdictions, and decades of technical debt layered like sedimentary rock.
Where the Money Goes
Tuum plans to expand direct sales and partner channels across DACH markets—Germany, Austria, Switzerland—plus Southern Europe and the Middle East. Some of that capital will fund deeper development of the company's Business Builder configuration tool, a low-code interface that's supposed to let banks customize products without calling in developers every time someone wants to tweak a fee structure.
The company, which rebranded from Modularbank in September 2021, already operates offices in London, Barcelona, Dubai, and Abu Dhabi. It formalized the Middle East push with a regional headquarters at Abu Dhabi Global Market in April 2024, following through on expansion plans flagged when the Series B closed.
Other clients include Multitude Bank, which extended its partnership with Tuum in November 2024 to cover operations across 13 European markets, and Kazakhstan's Bank CenterCredit, which selected the platform in September 2024 for a new banking-as-a-service offering. The roster skews toward midsize and digital-first institutions—the early adopters who can move faster than legacy giants but still provide reference-worthy scale.
Leadership and What Comes Next
Myles Bertrand, who joined as CEO in May 2023 after leading Asia-Pacific operations for Mambu, a German core banking competitor, said at the time of the Series B that the funding would help Tuum "redefine the essence of core banking for a digital-first future." It's the kind of statement CEOs make when they close big rounds.
By 2026, co-founder Ove Kreison had returned to the role of Interim CEO while also serving as chief product and technology officer—a leadership shuffle that's either a planned rotation or a sign of strategic recalibration, depending on whom you ask.
Tuum's total funding now stands at approximately €46 million across seed, Series A, convertible notes, Series B, and the undisclosed Citi Ventures follow-on. The company ranks #17 on Estonia's 2025 TopTech list, a respectable showing for a nation that's produced Skype, Wise, and Bolt. It also maintains partnerships with Deloitte, KPMG, Accenture, and the big three cloud providers—the kind of alliances that matter when you're selling into enterprises that want to see familiar names on the integration plan.
Whether Tuum's promise of rapid migration holds up at scale is the real test. Banks have been burned before by vendors promising to modernize their infrastructure in record time, and the graveyard of failed core banking replacements is littered with companies that underestimated the complexity.
But the 70% problem isn't going away. And as more institutions watch their IT budgets vanish into maintenance blackholes, something has to give.
