B2B financial service startup Finom — which provides online financial services for SMEs, freelancers and the self-employed in Europe — has raised an additional $ 12 million (€10.3 million) to add to its previous seed round of €6.5 million last April. The total funding raised in 2020 is now €16.8 million, and this is before the company has done a Series A round. Investors include Target Global (Germany), Cogito Capital (Poland), Entree Capital (Israel), Avala Capital (Germany), Tal Capital (India) and Adfirst Ventures FJ Labs (USA).
The additional investment round will allow Finom to extend its licensed activities, develop product and enter new European markets.
Founded in 2019, Finom is based out of the Netherlands and was founded by the team previously responsible to Modulbank, a B2B online bank in Russia. So far it is providing an e-invoicing service in Italy, and will launch in France this October.
Similar to other online challenger banks aimed at SMEs, the company is targeting countries where there is a relatively low penetration of online SME banking players, such as as Poland, Spain, Austria, Switzerland.
French startup Kard has added $ 3.5 million (€3 million) to its seed round. The company already raised the same amount last year, which means that Kard has raised $ 7 million (€6 million) in total for its seed round.
Kard is building a challenger bank specifically designed for teenagers. When you create an account, you receive your own IBAN and a Mastercard debit card. You can block and unblock the card, you receive instant transaction notifications and you can send and receive money with other Kard users.
For the past year, the service has been completely free and 50,000 teenagers signed up. Starting today, Kard is switching to paid subscriptions for new users. Each family has to pay €4.99 per month or €49.90 per year to create a family account. After that, you can create as many accounts as you want — if you have two, three or four children, it still costs €4.99 per month.
With today’s change, Kard is also adding some additional features. Parents can download the Kard app and manage allowances from the app. You can schedule weekly or monthly transfers, block your child’s card and send money instantly by pairing a card with the app.
As for teenagers, Kard users now get a virtual card for online payments. As a Kard user, your smartphone is insured against screen damage (up to €100). There are now three different card designs as well — black, silver or pink.
The startup says that Apple Pay and Google Pay are on the roadmap, as well as money pots. There will be some personalized discounts in the app as well, which could open up a new revenue stream.
Kard competes with PixPay, Xaalys, Vybe, but also Revolut Junior, Lydia and services from traditional banks. Let’s see how the new pricing strategy affects Kard’s growth going forward.
Meet Jefa, a startup that is building a challenger bank specifically designed for women in Latin America. The company is building a product that focuses on solving the problems that women face when opening a bank account and managing it. It is participating in the Startup Battlefield at TechCrunch Disrupt.
“There are 1.4 billion people in the world without a bank account. Out of those 1.4 billion, nearly 1.3 billion are women,” founder and CEO Emma Smith told me.
In many ways, bank accounts have been designed by men and for men. Even if you look at fintech startups, most of them have male founders. There is already a handful of challenger banks in Latin America, such as Nubank, Banco Inter, Banco Original and Ualá. But most challenger banks focus on mature markets, such as Europe and the U.S. Smith thinks that targeting women in emerging countries represents a huge market opportunity.
Jefa has carefully examined the reasons why women in Latin America often don’t have bank accounts or are unsatisfied with their bank accounts.
For instance, banks often ask you to hold a minimum balance even though women statistically earn less than men. Banks tell you to come to a branch to open an account even though many families only have one car and taking the bus can be a hassle. Banks have overly confusing products and don’t invest in marketing channels for women.
“It’s for all those reasons that we thought we need a fully digital solution that is branchless,” Smith said. “We have no minimum balance requirement; all you need is a government-issued ID and you can sign up in three or four minutes.”
Image Credits: Jefa
When Jefa launches in a few months, opening an account will be free. You get an account and a card a few days later. The service has a built-in savings feature that lets you round up purchases and set goals.
There will be a reward program called “It pays to be a woman.” Based on your purchases, you’ll earn points on hygiene products, going to the gynecologist, etc.
At first, you’ll be able to convert those points to cash back. Later, you could imagine redeeming your points at places that matter to women.
Jefa users will be able to send and receive free peer-to-peer payments within the app. And when it comes to withdrawing and topping up your account, Jefa is building a network of merchants to securely manage cash.
The company is also working on a credit building platform that should work a bit like Chime’s equivalent feature.
Jefa will be launching first in Central America, starting with Costa Rica and Guatemala. There are already 50,000 people on the waiting list. The company knows that it’ll be important to build a community around its product. So you can expect a community forum so that you can discuss finance with other Jefa users.
Banks tend to have a bad reputation because they are soulless entities that don’t necessarily understand your needs. It can be frustrating when they keep telling you that you don’t meet the criteria. Creating a digital-first bank represents an opportunity for vertical banks. And Jefa is a good example of that.
Once known for its affordable smartphones, Xiaomi has in recent years been transforming itself into an online mall for consumer electronics by making deals and building relationships with hundreds of hardware and lifestyle startups. And some of its allies are now going after the Western market with their high-end, China-made products.
Beijing-based Dreame, which produces premium hairdryers and vacuums in the style of Dyson but at lower prices, is one of Xiaomi’s latest bets. The startup announced this week the completion of a Series B+ round led by IDG Capital. The financing of nearly 100 million yuan ($ 14.6 million) also saw the participation of existing investors Xiaomi and Xiaomi founder Lei Jun’s Shunwei Capital, as well as Peak Valley Capital and Edge Ventures.
Dreame makes Xiaomi-branded vacuums and operates its own label, a common setup between Xiaomi and its suppliers, which get to enjoy the security of Xiaomi distribution and build their names at the same time.
The startup has emerged as a cheaper vacuum brand than the area’s pioneer Dyson, whose inventor James Dyson topped the U.K.’s rich list this year. Dreame’s latest handheld cordless broom V11, for example, costs €350 ($ 413) whereas Dyson’s new model asks for $ 600.
“If we compare Dyson to Apple, then there must be a Huawei in the [home cleaning] area, and we believe this company will come from China,” co-founder and vice president of marketing and sales Roc Woo told TechCrunch. Domestic businesses are poised to tap China’s rich manufacturing resources, cheaper labor and longer work hours compared to Western counterparts, he asserted.
“There are more and more success stories of Chinese brands going global, from small players like us through to behemoths like Huawei, Xiaomi, Oppo and Vivo.”
The fresh proceeds will fuel Dreame’s marketing and sales efforts in Europe and North America and allow it to spend more on research and development, which tackles the likes of high-speed motors, fluid mechanics, robot dynamics and visual simultaneous localization and mapping (VSLAM), all essential technologies for Dreame’s family of home cleaners and personal care electronics.
The five-year-old startup likes to talk up its robust engineering background. The founding team consists of friends from Tsinghua University, and chief executive Yu Hao made a dent on campus by launchingSkyworks, now the prestigious university’s largest hackerspace with sponsorship from industry giants like Boeing and Megvii. A number of its key staff were involved in China’s national spaceship program Shenzhou.
In addition, the startup boasts spending 12% of its annual sales revenue on R&D and operating a 20,000-sqm factory in eastern China’s Suzhou city, where it works to improve its proprietary designs, a growing trend among Chinese startups as Beijing calls for more tech self-reliance.
Xiaomi doesn’t put all its eggs in one basket when it comes to picking suppliers. In the realm of home cleaning, it has also backed robot cleaner Roborock, which raised about 4.4 billion yuan ($ 640 million) from an initial public listing on China’s new tech board in February. Xiaomi first bankrolled Roborock back in 2014, four years before its first investment in Dreame.
Woo believed Dreame and Roborock can co-exist, for his company targets a wider product spectrum while Roborock is more focused and akin to iRobot. The startup doesn’t consider Tyson, of which Woo spoke highly, a direct competitor either, for it’s venturing beyond cleaning into areas like smart mobility.
When asked whether Xiaomi picks winners, Woo said “Xiaomi is more of a platform and doesn’t allocate resources.” While it tended to work closely with startups in its early years, Xiaomi’s empire of consumer products runs on the basis of market competition these days.
“Our collaboration with Xiaomi is no different from the way we work with Amazon or eBay. The investment means not much more than having a capital tie-up and a foundation for trust,” he said. Being in the Xiaomi family does provide a practical perk: it’s a guarantee for sales and offers a bargaining chip for Dreame in its negotiation with production partners.
What Xiaomi gets in return is millions of global consumers signed onto its Mi Home app, a central platform for managing Xiaomi-branded Internet of Things. In Europe, its biggest market, Dreame said it strictly follows the GDPR’s rules on data protection.
Boosted with new capital, Dreame is ready to foray into the U.S. by the end of this year. It already derives 70-80% of its sales outside of China, with a concentration in Europe where it saw a spike in orders since the COVID-19 outbreak for its products were sold mainly online.
For the current year, it aims to generate 3 billion yuan ($ 440 million) in sales, which doesn’t seem far off, given it had shipped more than 1 million vacuums by May since the category’s debut two years ago.
Meet Fondeadora, a fintech startup based in Mexico City that wants to build a full-stack neobank. The company just raised a $ 14 million Series A round led by Gradient Ventures, Google’s AI-focused venture fund. Founded in 2018, the company already manages 150,000 accounts and is adding $ 20 million in deposits every month.
Mexico represents a massive opportunity for a challenger bank as many people still rely on cash for most of their transactions. Given that all countries are progressively switching to card and digital payments, it seems like the right time to launch Fondeadora .
Y Combinator, Scott Belsky, Sound Ventures, Fintech Collective and Ignia are also participating in the funding round.
“We launched the first crowdfunding platform in Mexico about 10 years ago,” co-founder and co-CEO Norman Müller told me. “About 50% of card transactions failed in the system.”
That platform was also called Fondeadora. After a deal with Kickstarter, Müller and Fondeadora co-founder René Serrano went back to the drawing board and thought about the problems they had while operating the crowdfunding platform. It became Fondeadora as we know it today, a challenger bank that wants to improve the banking experience in Mexico.
The team traveled across Mexico to find a bank charter that they could use. “We acquired the charter, it was owned by a group of tomato farmers in Mexico. Twenty years ago, the government gave about 10 charters to create financial inclusion,” Müller told me.
The company launched its banking service after that. You can open an account without visiting a branch. You then receive a Mastercard debit card. You can choose to receive notifications after each purchase, lock and unlock your card, send instant transfers to other users and more. There are no monthly subscription fee and no foreign transaction fee.
Up next, Fondeadora wants to democratize savings accounts. “Cash has a great UX and UI. You can touch it, you can store it in your drawer. But as a medium to generate income, it’s terrible,” Müller told me.
In the coming months, you’ll earn interest on your deposits in your Fondeadora account. “We’re investing in government bonds, it’s a very secure type of instruments. In Mexico, you can get 5% or 6% interest rate,” Müller said. The startup could allocate a small portion of deposits to medium-risk investments as well.
One of the first independent Swiss challenger banks neon has completed a financing round in parallel to its rapid growth in customers. A wide range of supporters from the existing investors Backbone Ventures, TX Group, the Schwyzer Kantonalbank innovation foundation and the “Höhle der Löwen” investors Roland Brack and Bettina Hein and new investors Helvetia Venture Fund, QoQa Services SA and other private investors participated in the round.
Founded in 2017, neon offers a simple, user-friendly and secure account solution as an app for all smartphones. One year after the solution went live, the 30,000 customer mark has already been exceeded. neon positions itself as the Swiss solution for a mobile, inexpensive and easy-to-use smartphone account.
For Jörg Sandrock, CEO of neon, the new financing is both a success and an incentive: “The financing round confirms the path and goal. Existing and new investors are convinced of our potential. We are of course proud of that. It’s also a great incentive to keep working hard on our development in order to continue our growth and change the market. ”
With Helvetia, one of the leading Swiss insurers joins neon. At the beginning of summer, Smile, the Swiss digital insurance from Helvetia, and neon launched the first Swiss mobile bancassurance solution. Neon has also already worked with the Lausanne-based company QoQa. “The deep expertise and experience of QoQa will accelerate our growth in the eCommerce sector and also in French-speaking Switzerland”.
Samuel Hügli, Head of Technology Services & Ventures at TX Group, notes what makes neon particularly interesting for investors: “It’s impressive how neon, as an uncomplicated and secure mobile banking solution, stirs up the Swiss market. We are convinced of this development and want to make our contribution to the continued success of neon by expanding our financial support and our expertise in the development and marketing of digital platforms.”
Miklos Stanek, Founding Partner and Chairman of BackBone Ventures, is convinced: “neon is enthusiastic about its product. We firmly believe that neon will visibly change the banking behavior of the Swiss in the next 2-3 years. We look forward to accompanying neon on this path. ”
Danish challenger bank Lunar today opens a new business bank and paid-for account catering for small businesses and freelancers and taps Nordea’s former head of startup and growth to spearhead the offering.
Lunar is a Danish challenger bank established in 2015 and on a mission to change banking for the better. Using its neat tools and sleek card, users can save, spend, invest, get loans and insurance under its roof. Earlier this year, they launched their offering for teenagers. So far, the fintech has more than 175,000 users in the Nordics, offices in Aarhus, Copenhagen, Stockholm and Oslo and has built it team to a comfortable +150 employees. In August 2019 it obtained a banking license and in April this year, during the pandemic lockdown, it raised an €20 million additional Series B funding, bringing the round as a whole to €46 million.
Today they are launching a business bank account, which include a paid-for business account. A Premium business tier will be added in the coming months.
In a comment founder and CEO Ken Villum Klausen said: “There is a huge appetite for business accounts, and our ambition is to move up in segments fast. Charging an annual fee will give us the opportunity to invest in more power features, explore own business loans and cater for larger companies as well.
The business product will be one of the big revenue streams in Lunar and we’ve given early access to 2,000 users and close to 90% has been monthly active users and willing to pay the subscription upfront.”
Lunar has staffed up for the new offering and hired Jacob Faber as Head of Lunar Business. He joins from Nordea Business banking where he served as Head of Startup and Growth. Lunar also made several new AML hires to cater for the new segment.
The Nordics has not seen the intense business banking competition known from larger markets. According to the European Commission’s SBA fact sheet there are 1.5 million SME’s across Denmark, Sweden, Norway and Finland.
Jacob Faber, Head of Lunar Business, said: “Compared to the larger European economies it is a small market, but the Nordics is also one of the world’s most profitable banking markets. There are high entry barriers to get a business account like sign-up fees, 6-10 weeks approval time to get an account and high costs related to the small entrepreneur segment.
No doubt we will see more competition, but for now the defensive Nordic infrastructure requires a Business account that can be easily connected to the public payments setup. That’s why offering national accounts is inevitable to get a strong presence in the local markets.”
Lunar’s business account will initially launch in Denmark and thereafter be adapted to all Nordic markets.
On August 5, blood-testing startup Sight Diagnostics raised another $ 71 million aimed at boosting its share of the $ 50 billion global market for complete blood count (CBC) testing — which doctors use to count a patient’s red and white blood cells and other blood components.
Aside from the race to dominate the global markets in terms of registered users, app downloads and huge funding and valuations, how do these digital banks really compare against each other? Which one offers the best options for managing your money digitally? Which one is the best for travelling? What are the fees involved and how easy (or difficult) is it to open and maintain an account?
Check-out our side by side comparison of N26 and Revolut standard plans and see for yourself:
The free plans of both N26 and Revolut are convenient and less expensive alternatives to traditional bank accounts. Both offer flexibility for overseas transactions and international money transfers, as well as options for freelancers and small businesses. The main differences are that as N26 has a German banking license, deposits are guaranteed up to €100K while a similar guarantee is not yet available for Revolut in the EU and N26 does not charge anything for card transactions in foreign currency. Unlike Revolut, N26 is no longer available in the UK but has been available in the US by 2019, while Revolut became available in the US only in March 2020. N26 is available in both the web and mobile app versions, while Revolut is only in mobile app. Revolut has features that are not available in N26 like access to cryptocurrencies.
N26 and Revolut both have premium/paid plans that offer travel insurance features like overseas travel, luggage, and trip insurances. N26 premium plans offer extra lifestyle features such as mobility insurance for shared vehicles as well as winter sports insurance.
N26 and Revolut’s stories
N26 was founded in 2013 in Berlin by Valentin Stalf and Maximilian Tayenthal, with the aim of making banking easier and more transparent for millions around the world. In 2015, it launched its first products with its free N26 bank accounts and N26 Mastercards in Germany and Austria. It secured a full European banking license from the European Central Bank in 2016 and in 2017 introduced its premium account with N26 Metal. As mentioned above, 2019 proved to be a banner year for N26 in terms of fundraising. This year, N26 has over 5 million customers across 25 markets, with a team of more than 1,500 employees across its main offices in Berlin, New York, Barcelona, Vienna, and São Paulo. In 2020, N26 closed their operations in the UK, citing Brexit as the cause.
Revolut was founded two years later than N26, in 2015 in London, by Nik Storonsky and Vlad Yatsenko. Its aim from day one was to become a global financial superapp. By 2016, Revolut registered 100,000 users and secured its Series A funding. In 2017, it launched crypto trading and Revolut for business as well as secured its Series B funding of around €55 million. Next up, 2018 saw the launch of its premium service Revolut Metal while in 2019, it launched donations (partnering with 20 charities) and trading which brought fractional trading to its customers. This year, it expanded to the US, secured a €460 million Series D funding, and enabled open banking that allowed customers to all their external accounts in one place. Revolut has surpassed over 12 million in customers across 35 countries with over 30 in-app currencies. It has over 2,000 employees across its 20 locations globally that include offices in London, New York, San Francisco, Paris, Berlin, Melbourne, São Paulo, and Tokyo.
From the beginning, N26 has positioned itself as a neobank, a digital and convenient alternative to traditional banking while Revolut on the other hand rather as peer-to-peer payments and currency exchange, more on alternative financial services not readily available with traditional banks. With its recent funding, N26 intends to double down on its most promising markets (EU, US, Brazil) while Revolut wants to double down on its core features, down to providing full bank accounts in Europe in the future, replicating the many services currently available in the UK. Revolut also intends to launch in the US and Japan.