Its raining investments in the financial sector as the ‘social’ and neobank, Kroo, has announced that it has raised $24.5 million in its Series A funding round that was led by the tech entrepreneur Rudy Karsan.
The bank currently distributes digital prepaid cards and it hopes to utilize these funds to expand its operations with a plan to apply for a digital banking license in 2022. It calls itself a social bank as it wants to take care of its users and also the environment in which it operates by planting trees and doing other environment-friendly activities. The company was started in 2019 and what is surprising is the fact that so far, it has not had any institutional investors. Of course, this helps to give it a lot of freedom in the way it wants to operate.
CEO Andrea de Gottardo, said: “We want to build the world’s greatest social bank: a bank dedicated to its customers and to the world we live in. We’re going to do more than just work with Kroo customers to improve their relationship with money and provide them with access to fair loans. We’re going to offer them ways to actively take part in making our world a better place, like carbon offsetting and a tree-planting referral program.”
The company has raised over $30 million so far from various individual investors and this banking and payments space is hotting up over the last year or so and it is likely to face a lot of challenges and increased competition from other major banks as it jostles for a space for itself in this growing market. It is clear that digital banks are the way forward in the banking industry and we may also see that bank branches may become obsolete in due course of time. But other major banks and other startups with heft money bags have also entered into the digital banking space and they are all competing for the attention of the same set of customers which means that the space is beginning to get pretty crowded.
We have to wait and see how Kroo is going to set itself apart from the other digital banks that are already in operations or the horizon and only then we will know the full scope of their plans and future growth.