Bunq, a Dutch neobank startup, raises $111M at a $1.8 billion valuation to expand into the US market

In the first half of 2023, the fintech industry experienced a significant decline in venture funding, with investments dropping almost by half to just $23 billion. This funding drought was a result of the ongoing economic downturn that affected the overall investment landscape in the fintech sector.

However, amid this funding slowdown, some fintech startups have managed to secure substantial amounts of capital. The latest is Bunq, a Dutch neobank startup that offers a range of banking services, including savings, payments, and card services, with a focus on catering to consumers who require financial services across multiple countries throughout Europe.

On Monday, Bunq announced it has raised $111 (€100 million) in total funding of which €44.5 million just closed today, and a previously undisclosed €55.5 million earlier this year. The round, which was backed by existing investors including Pollen Street Capital, Raymond Kasiman, and the founder and CEO, Ali Niknam, brings the company valuation to €1.65 billion (equivalent to $1.8 billion at present, or $1.9 billion as of 2021).

Founded in 2012 by Dutch entrepreneur Ali Niknam, Bunq dubbed itself as a “bank of The Free” with a mission to provide a user-centric and transparent banking experience and help “break free from the status quo.” Bunq is based in the Netherlands and has quickly gained popularity for its forward-thinking approach to banking.

Bunq will use the fresh capital infusion to expand its global footprint, with the aim to initially target the various expats from Europe who have moved to the U.S. but still have roots in Europe.

“It’s been a truly magical year for bunq: We’re rapidly expanding and have seen massive deposit growth,” bunq founder and CEO Ali Niknam said in the release. “With more and more people entrusting their money to us, we’re convinced that we should double down on our momentum and cement the way forward for future growth.”

Bunq currently boasts an impressive customer base of 9 million, a significant increase from 5.4 million customers just one year ago. The company’s success is further evident in its customer deposits, which have soared to €4.5 billion, compared to €1 billion two years ago.

“I have experienced how complicated things are in the U.S.,” he said. “You can’t survive without a bank account, but getting one without a U.S. tax ID [or credit history there] can be mind-bogglingly difficult.”

While the majority of its customers are located in Europe, Bunq’s ambitious CEO, Niknam, envisions an equally promising opportunity in the United States.

Recognizing the potential in this vast market, Bunq initiated the process of obtaining a banking license in the U.S. in April of this year, signifying its dedication to expanding its presence and services in the American financial landscape. With such substantial growth and strategic initiatives, Bunq is making significant strides toward becoming a prominent player in both its home territory and the thriving U.S. market.