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European challenger bank Bunq raises $228 million at $1.9 billion valuation – TechCrunch

2 Mins read

 

Amsterdam-based challenger bank Bunq has been self-funded by its founder and CEO, Ali Niknam, for several years. But the company has decided to raise some external capital, leading to the most extensive Series A round for a European fintech company.

The startup is raising $228 million (€193 million) in a round led by Pollen Street Capital. Bunq founder Ali Niknam is also participating in the game — he’s investing $29.5 million (€25 million) while Pollen Street Capital is financing the rest of the round. Bunq is also acquiring Capitalflow Group, an Irish lending company previously owned by … Pollen Street Capital, as part of the deal.

Founded in 2012, Ali Niknam has already invested quite a bit of money into his own company. He poured $116.6 million (€98.7 million) of his capital into Bunq — that doesn’t even take into account today’s funding round.

But it has paid off as the company expects to break even every month in 2021. The company passed €1 billion in user deposits earlier this year. So why is the company raising external funding after turning down VC firms for so many years?

“Everything has a right time. At the beginning of Bunq, it was important to get a laser user focus in the company, and having to also focus on fundraisers and the needs of investors distracts. Bunq now is mature enough to start scaling up significantly, so more capital is welcome,” Niknam said.

In particular, the company expects to acquire smaller companies to fuel its growth strategy. Challenger banks have also represented a highly competitive market over the past years in Europe. There will be some consolidation at some point.

Bunq offers bank accounts and debit cards that you can control from a mobile app. It works particularly well if your friends and family are also using Bunq to instantly send money and share a bunq. Me payment link with other people, split payments, and more.

In particular, if you’re going on a weekend trip, you can start an activity with your friends, and it creates a shared pot that lets you share expenses with everyone. If you live with roommates, you can also develop subaccounts to pay for bills from that account.

The company offers different plans that range from €2.99 per month to €17.99 per month — there’s also a free travel card with a limited feature set. By choosing a subscription-based business model, the startup has a clear path to profitability as most users are paid users.

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Tristan McCue is a 26-year-old junior programmer who enjoys reading, binge-watching boxed sets, and appearing in the background on TV. He is smart and friendly, but can also be very evil and a bit lazy.He is an Australian Christian. He has a post-graduate degree in computing.
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