Bunq, the new age bank that is based out of the Netherlands and looking to challenge the larger banks in the region, has announced that it has raised $228 million in the first round of external investments that it has sought since its inception in 2012.
The round of investment was led by Pollen Street Capital and the funds are expected to be used for growth and expansion in the region. It is interesting to note that the Bunq founder,Ali Niknam, also participated in this round of investment where he pumped in $29.5 million of his own funds. So far, he has invested $116.6 million into the company, apart from the current round of investment and that shows the conviction that he has in his company.
“Everything has a right time. At the beginning of Bunq, it was important to get a laser user focus in the company. Having to also focus on fundraises and the needs of investors distracts. Bunq now is mature enough to start scaling up significantly, so more capital is welcome,” Niknam said.
The investments are likely to bear fruit in the coming months as the current round of investment improves the valuation of the company to $1.9 billion and the company is expected to become profitable on a month-on-month basis in 2021 which represents good growth for the company so far. In the latest round of investment, the company is also acquiring Capitalflow Group, which is a lending company based in Ireland belonging to Pellenstreet Capital.
This shows that Bunq has moved to the growth stage from the startup stage as the company is likely to focus on growth and acquisitions using the funds that it has raised.The company currently provides savings accounts and credit cards that can be accessed and controlled by the user from a mobile app. With digital banking being the rage around the world at this time, Bunq is expected to ride this wave of interest and push strongly ahead in this region which has been seeing a lot of activity in the banking and payments sector of late.
We have been seeing the consolidation of payment companies and growth of digital banks as more and more transactions move online and many larger companies and investors begin to eye this space as the next industry where a lot of growth and returns can be seen.