Amsterdam-based bunq, Europe’s second-largest neobank, has secured a fresh capital injection of €29M from the company’s existing shareholders.
According to Bunq’s annual report, in March 2024 shareholders signed a capital commitment letter of €29M to provide the neobank with sufficient CET1 capital for its 2024 growth ambitions. The first €16.5 million has already been received before March 22 to comply with leverage ratio requirements.
The company’s shareholders, except Stak, expressed support for the company’s financial plans and growth.
Both capital ratios and liquidity ratios exceed the regulated thresholds in the forecast, the report said.
Produces a surplus throughout the year.
The announcement comes after the Dutch unicorn reported 2023 net profit of €53 million in its annual report and financial statements.
Ali Niknam, founder and CEO of Bunq, says: “I am so grateful to work with so many great people every day, and I am proud of what we have accomplished together. In other words, it became the first EU neobank to record profitability for an entire year. . Not because profit was our primary goal, but because it validated one of my core beliefs: if you build a product that people love, your business will thrive.”
Utilization of funds, resubmission of application, etc.
The funds will accelerate bunq’s development strategy and ensure compliance with Dutch Central Bank regulations, Finnovate reports.
Bunq has announced plans to expand further in the UK and enter the US market with the help of new capital.
The company plans to resubmit its application for a banking license to the U.S. Office of the Comptroller of the Currency (OCC) earlier this year after withdrawing it due to issues between Dutch regulators, the OCC and the Federal Deposit Insurance Corporation (FDIC).
In a statement, Bunq confirmed that it is committed to resolving any differences between the supervisory expectations of De Nederlandsche Bank, the FDIC and the OCC.
The move will allow the company to target a wider market, particularly the UK’s estimated 2.8 million digital nomads.
The Dutch neobank reported significant profits, including a three-fold increase in interest income in 2022 and 2023. Interest income increased from €41 million to €151.5 million in 2023.
In addition to the milestone profit, bunq said client assets had increased from €1.8 billion to €6.9 billion.
Finn
Last December, the Dutch neobank also launched its GenAI platform, Finn, in bunq update 24. Powered by LLM, Finn allows bunq users to plan their finances, improve their budgets, navigate apps, easily find deals, and more.
“Finn will surprise you,” says Ali Niknam, founder and CEO of bunq.
Like ChatGPT, Finn has a chat-style text box where users can ask questions or seek advice about their bank accounts, spending habits, savings, and anything money-related.
A brief description of bunq
Ali Niknam founded bunq in 2012 after receiving his first European banking license in 35 years. As of 2021, Niknam has personally raised €98.7 million in the company as the sole investor.
This approach has freed bunq to build a bank that prioritizes the needs of its users.
Neobanks claim that this gives them the freedom to establish banks rooted in the wants and needs of their users.
The fintech company was the only self-funded challenger bank to enter 30 European markets without a single penny of VC funding.