December 8, 2023

Remote work and digital nomadism have become two very prominent aspects of the working world during the pandemic, shedding light on the millions of people who live in one country but make money in another. Now, a startup that is building financial services catering to this demographic has announced some growth funding to expand its business.

Bunker A Dutch start-up that provides banking, savings, payments, cards and other services to consumers, with a focus on people in various European countries who may need such services. The company has raised €100 million in equity funding ($111 million at today’s exchange rates), having just closed a €44.5 million funding round today and a previously undisclosed €55.5 million raised earlier this year.

The investment was “internal financing” by previous backers, notably Pollen Street Capital, Raymond Kasiman, and founder and CEO Ali Niknam. The round is valued at €1.65 billion (currently $1.8 billion; $1.9 billion in 2021), exactly the same valuation as when Neobank raised $228 million in 2021 from the same investors.

This funding round is the first and last outside investment by Bunq, and therefore the last valuation review. Previously, the startup was backed by Niknam himself, who invested millions after his third venture — he described Bunq to me in an interview earlier today as “my third unicorn” — and said he still owns about 90 percent of the company today.

The plan will use the funds to continue expanding Bunq’s business. The company now has 9 million customers, up from 5.4 million a year ago, and customer deposits of €4.5 billion (up from €1 billion two years ago). Most of the company’s clients are in Europe, but Nickenen said he sees the opportunity in the U.S. as huge as it is at home. In April, it began processing a banking license there.

Its initial target was the European diaspora who had immigrated to the United States but remained firmly rooted in Europe.

“I’ve experienced how complicated things are in America,” he said. “You can’t survive without a bank account, but getting one without a US tax ID number (or credit history) can be very difficult.” Likewise, he believes, serving US residents moving to Europe presents another opportunity that is much easier than opening a local bank account.

The company’s flat valuation and internal funding illustrate the pressure we continue to see in the venture capital market, with companies raising larger growth funds finding it particularly challenging to raise capital and do so at strong valuations.

“Our first round of funding was at the top of the market, so while we’ve grown substantially, the market has declined,” Nicknan said. “But we are very happy to maintain the current valuation.”

He describes the company as “healthy and sustainable”: bunq has been operating profitably in the past couple It’s largely based on a model where users pay less for cross-border money transfers and other transactions, but instead pay monthly subscription fees for their accounts, he said. several layers – their business plans and forecasts are for the entire company to be “profitable, profitable, with money in the bank, Everything” by the end of the year.

Health and sustainability are key words at Bunq. Niknam, founded in the aftermath of the financial crisis, saw an opportunity in 2012 to build a new bank that he said was more “durable” and aimed at providing services consumers really wanted. With more and more trends pointing towards people traveling and working across borders — “digital nomads” certainly predated Covid-19 — and traditional banks not really taking on the challenge of addressing this in a cost-effective way, it was a signal for him to try and build something that could do that.

The name Bunq has no particular meaning as slang, but from what I understand Niknam likes it because when it has a lowercase “b” in its logo (bunq), it reads the same way upside down as upside down, a metaphor for the bank’s goal of being accessible to people wherever they are. “bunk” sounds a bit like “bank”.

Notably, he said about 65% of all checking accounts at Bunq are primary accounts, meaning these accounts are the primary deposit accounts for these customers.Having a healthy number of major accounts as part of the campaign is still a Elusive territory for many neobanksNot only are these accounts still a minority of all current accounts globally, but they are often used as “secondary” accounts, where people deposit money after they have deposited it into existing accounts.