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Challenger Bank Bunq Lands First Outside Investment at $1.9B Valuation

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In the Dutch challenger bank’s first round of outside investment, bunq announced today that they have raised €179 million ($228 million) in funding, bringing their valuation to €1.6 billion ($1.9 billion). The funding was led by Pollen Street Capital, who contributed €168 million for a roughly 10 percent stake in the company, Alongside Pollen Street Capital, bunq founder Ali Niknam also contributed another €25 million.  Until today, Niknam has been self-funding the company since bunq’s inception in 2013. Prior to today’s announcement, Niknam had already invested $116.6 million of his own money into the firm. As the company’s sole investor, Niknam has been very careful in choosing a strategic partner with shared goals. Commenting on his decision to go with Pollen Street Capital, Niknam said “bunq was founded to challenge what banking is and can do. By putting our users first we have created a bank that is super focused to make life easy in a sustainable way. We’re extremely excited to join forces with Pollen Street Capital to further expand the bank of The Free throughout Europe,” With several years of growth already under its belt, this $228 million raised by bunq marks the highest amount ever in Series A funding for an European fintech.  

Bank of the Future

As a neobank, bunq boasts its “no branch visits, no queues, no paperwork” as the way of the future. Through their “Easy Bank” feature, accounts can be set up on the mobile application in as little as five minutes. Once set up, users have access to the digital banking platform where they can send and receive money, share a payment link with others, and split bill payments. The concept of neo banking has exploded in popularity as of late, with several fintech entrants battling for market share in Europe. Bunq has been one of the most successful, expanding their services to over 30 countries across Europe. Earlier this year, the bank also announced that it had reached a major milestone with €1 billion in deposits. 

Aside from the appeal of easy, convenient mobile banking, bunq also proudly promotes their sustainability initiatives. For example, bunq will plant one tree for every €100 spent on a customers card. In addition, the company gives users the option of deciding how the money in their accounts is invested by bunq. Users can choose from green companies, socially responsible companies, or just toggle the option off if they decide they don’t want their money to be invested. 

Beginning a Mergers and Acquisitions Spree?

Not only was this bunq’s first private funding round, but also their first foray into the mergers and acquisitions space. Alongside the capital infusion, the deal also saw bunq acquire lending company Capitalflow Group, previously owned by Pollen Street Capital. The company lends to small and medium sized enterprises in its home country of Ireland, with a total of €650m lent out to businesses in the country to date. In addition to expanding into the lending space, the move may be a signal that bringing in more capital may be a way to facilitate additional mergers and acquisitions sometime in the near future. 

 

Baggio has been an investor in the technology space for over half a decade. He uses the perspectives gained from his work experience in the private, public, and non-profit sectors to guide his investment strategy, with a specific interest in the potential of emerging disruptive technologies.

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