• Dutch-based digital bank bunq has secured $31 million (€29 million) in new funding.
• The funding announcement came after the company reported a profit of $57 million (€53 million) for 2023.
• bunq added that it will re-submit its application for a banking license in the U.S. as part of its expansion plans.

European digital bank bunq has raised $31 million (€29 million) in new funding. The capital infusion from the company’s shareholders came in the wake of bunq’s announcement that it has achieved a net profit of $57 million (€53 million) in 2023. The funds will accelerate bunq’s development strategy, as well as ensure that the company satisfies Dutch Central Bank capital requirements.

The digital bank has credited interest income for its profitability, not just in 2023, but in 2022, as well. The company reported that interest income tripled in 2023, growing from more than €41 million to more than €127 million. In addition to its profit milestone in 2023, bunq also announced that customer assets climbed from $1.9 billion (€1.8 billion) to $7.4 billion (€6.9 billion).

Bunq plans to leverage the new capital to expand more in the U.K., as well as move into the U.S. market. To this end, the institution noted that it plans to resubmit its application for a banking license with the U.S. Office of the Comptroller of the Currency (OCC). Bunq withdrew its application earlier this year citing issues between Dutch regulators, the OCC, and the Federal Deposit Insurance Corporation (FDIC). In a statement, bunq noted that it was “fully committed to resolving all the differences between De Nederlandsche Bank’s, and the FDIC’s, and OCC’s supervisory expectations.”

That said, it has not been easy for financial institutions outside the U.S. to secure approval to operate within the U.S. For example, Monzo, a U.K.-based challenger bank, tried and walked away from the process in 2021 when approval seemed unlikely. Unfortunately, new U.S.-based firms looking for bank charters have only fared a little better. For every Savi Financial, there is a New Canaan Bank.

Bunq raised $111 million last July, boosting the firm’s valuation to $1.8 billion. The company ended 2023 with the launch of its generative AI financial copilot Finn. Fundamentally, Finn will help replace the search function on the bunq app. But the technology will also assist users as they plan their finances, build budgets, review transactions, and more.

“Finn will wow you,” bunq founder and CEO Ali Niknam said when the product was launched. “Years of AI innovation, coupled with a laser focus on our users, allowed us to completely transform banking as you know it. Seeing Generative AI make life so much easier for our users is incredibly exciting.”

Photo by Chait Goli

• Griffin was granted approval from the U.K.’s Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) to offer banking services in the region.
• Along with announcing the banking approval, Griffin also unveiled it has secured a $24 million (£19 million) Series A extension round to fuel the launch of banking services.
• Initially, Griffin does not plan to offer direct-to-consumer banking accounts, but will offer business bank accounts to help organizations manage their own finances and hold client funds.

U.K.-based BaaS fintech Griffin has been granted approval to launch as a fully operational bank. The company announced yesterday that the U.K.’s Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) granted Griffin approval to offer bank services in the U.K.

Fueling the launch is a $24 million (£19 million) Series A extension round. Crunchbase reports that the investment will boost Griffin’s total funding to $66.7 million (£52.1 million), while TechCrunch stated the total as $52 million (£40.6). The new round was led by MassMutual Ventures, NordicNinja, and Breega. Existing investors Notion Capital and EQT Ventures also participated. Griffin will use the funds to scale the bank and enhance its infrastructure.

With the proper approvals in place, Griffin can now offer banking, payments, and wealth management accounts to third party organizations. Interestingly, Griffin is not launching direct-to-consumer bank accounts, but will offer business bank accounts to help organizations manage their own finances and hold client funds.

The authorization comes after Griffin’s year-long mobilization period during which it was allowed to test and refine its products, build banking integrations, and develop its systems in preparation for the debut as a full bank.

“Today’s announcement is a culmination of years of hard work by the incredible team at Griffin,” said company CEO David Jarvis. “I’m particularly grateful to our pilot customers for placing their trust in us, and look forward to helping them continue to scale innovative products at the intersection of technology and finance.”

Founded in 2017, Griffin offers BaaS tools that include client onboarding, regulatory compliance safeguards, client money accounts, and payments. The company plans to launch branded debit, prepaid, and digital cards soon. Griffin’s direct banking tools, launched this week, include operational accounts, credit, and lending.

“As the UK’s first full-stack BaaS platform with a banking license, Griffin is the partner of choice for fintechs and brands to build innovative financial products with a seamless client experience,” said MassMutual Ventures Managing Partner Ryan Collins.

Photo by Asim Raza Khan

• U.K.-based digital bank Monzo has raised $430 million (£340 million) in a round led by Alphabet-owned CapitalG.
• The funds come about a year after Monzo achieved profitability, having reached nine million customers.
• Monzo’s post-money valuation is now $5 billion, up from $4.5 billion in 2022.

U.K.-based digital banking platform Monzo has raised $430 million (£340 million) in a round led by Alphabet-owned CapitalG.

Also participating in the round, which was first rumored last week,  were new investors, Google Ventures and HongShan Capital, along with existing contributors Passion Capital and Tencent. The new round boosts Monzo’s post-money valuation to $5 billion (£4 billion), which is up from the $4.5 billion valuation it received in 2022. According to Crunchbase, Monzo’s total investment amount now stands at $1.5 billion.

“With backing from global investors, we have the rocket fuel to go after our ambitions harder and faster, building Monzo into the one app that sits at the centre of our customers’ financial lives,” said company CEO TS Anil. “Each milestone we’ve reached to this point has given us more strength and speed to make strides towards our mission – now we’ll scale to even greater heights and seize the huge opportunity ahead.”

Monzo plans to use the funds to fuel expansion and to help the company improve its product roadmap. The timing of the funds, combined with the company’s expansion ambitions, come at a good time. That’s because, since it was founded in 2015, Monzo has acquired nine million users– two million of which were brought on just last year. This growth, combined with higher interest rates, pushed Monzo to achieve profitability in March of last year.

Monzo originally launched in 2015, the early days of digital challenger banks. In the U.K., the company offers both personal and business accounts that feature current and savings accounts, unsecured personal loans, and investment funds powered by BlackRock. U.S. users are limited to personal and joint checking accounts, but have the option to aggregate data from other financial services providers in order to get a holistic picture of their overall financial standing.

According to Monzo’s public roadmap, the company is currently working on budgeting improvements, paying interest on savings balances, and a faster onboarding experience. For the future, the company plans to develop digital billpay, capabilities and the ability to send checks, and also has stretch goals to launch a check depositing feature, subscription management, and merchant spending rules.

Photo by Mikhail Nilov

• Zūm Rails landed $7.78 million (CAD $10.5 million) in a Series A funding round led by Arthur Ventures.
• The company will use the funds to scale its U.S. growth and to further expand its payments offerings, including the launch of new banking-as-a-service features.
• Zūm Rails currently processes more than $1 billion in payments through its platform every month.

Canadian fintech Zūm Rails (pronounced zoom rails) brought in $7.78 million (CAD $10.5 million) in funding this week. The Series A round, which was led by U.S.-based Arthur Ventures, marks the company’s first VC funding round.

Founded in 2019, Zūm Rails seeks to make the payments experience less disjointed by integrating open banking and instant payments into a single gateway. This removes the need to stack technologies on top of one another and ultimately creates a better and more secure customer experience. The company launched in the U.S. market late last year, leveraging partnerships with Visa Direct, Mastercard, and MX.

Zūm Rails will use today’s funds to scale its U.S. growth and to further expand its payments offerings. Specifically, the company plans to launch new banking-as-a-service features for merchants and has plans to unveil a FedNow offering in the U.S. that will enable businesses to send and receive FDIC-insured payments in near-real-time. FedNow, the U.S. government’s real time payment service, launched last July.

“We’ve brought open banking and instant payments together in an omni-rail solution that enables companies to check off all of their payments needs from a single gateway,” said Zūm Rails Co-founder and CEO Marc Milewski. “With Arthur Ventures’ investment, we’re positioned for further expansion of our solution through the addition of banking-as-a-service and other new capabilities.”

As part of building out its U.S. operations, Zūm Rails has been working with financial service providers such as Fiserv to democratize access to open banking capabilities and real-time, FDIC-insured payments for businesses. “Having already transformed the Canadian payments landscape, the company is well-positioned to increase this growth with the investments it’s making in its product and scaling its presence across all of North America,” said Arthur Ventures Vice President Jake Olson.

As for what’s next, company Co-founder and Chief Sales Officer Miles Schwartz said that the company’s long-term vision transcends its individual capabilities. “Integrating these capabilities into a single solution that makes businesses’ lives easier will continue to be our focus as we double down on our expansion in the U.S.,” explained.

Zūm Rails, which up until now has been self-funded, currently processes more than $1 billion in payments through its platform every month. Among the company’s clients are Questrade, Coinsquare, and Desjardins.

Photo by Jonathan Petersson

• Fordefi has raised $10 million, bringing its total funding to $28 million.
• The company will use the funds to launch a crypto Wallet-as-a-Service offering.
• Fordefi leverages Multi-Party Computation (MPC), a technology that performs cryptographic operations across multiple devices without offering any single device access to the complete information.

After last year’s regulatory missteps in the crypto world froze activity in the decentralized finance space for months, the crypto winter is slowly beginning to thaw. In today’s move toward a crypto spring, Multi-Party Computation (MPC) digital wallet company Fordefi has raised $10 million in a Seed Extension round.

When added to the $18 million Fordefi raised in 2022, today’s round boosts the company’s total funding to $28 million. The round was led by Electric Capital and saw participation from both new and existing investors, including Paxos and Alchemy.

“Our mission at Fordefi has always been to facilitate secure management of digital assets,” said Fordefi CEO and Cofounder Josh Schwartz. “We’re proud to continue building on this mission and provide both web3 and web2 businesses with a crucial tool to enable safe crypto adoption for all participants. We are committed to strengthening the Web3 ecosystem and ensuring its accessibility while maintaining a strong focus on security and transparency.”

Founded in 2021, Fordefi’s MPC wallet platform is a cryptocurrency wallet that boasts higher security by leveraging MPC, a technology that performs cryptographic operations across multiple devices without offering any single device access to the complete information. When compared with single-key wallets, which risk a single point of compromise, MPC wallets offer relatively high security.

The New York-based company plans to use today’s funds to facilitate their launch of its wallet-as-a-service (WaaS) offering. Fordefi’s WaaS enables exchanges, fintechs, and web3 businesses to embed a user-owned wallet within their existing applications.

Electric Capital Cofounder and General Partner Curtis Spencer said that the WaaS offering “extends [Fordefi’s] industry leading technology to any business wanting their customers to have the best mix of security and user experience to get on-chain.”

By using the “as-a-Service” model, Fordefi is helping organizations take advantage of increased consumer interest in digital assets and decentralized finance while maintaining a high level of security.

As interest in decentralized finance grows, so has increased regulatory scrutiny in the space. In many cases, however, the promise of cost savings and increase efficiencies from decentralized finance and blockchain technology has surpassed the fear of repercussions. Because of this, we’ve seen a flurry of news activity in the Web3 finance so far this year. Some of the top news headlines in 2024 include cryptocurrency payments app Oobit raising $25 million, digital asset embedded finance solution Mesh raising an undisclosed amount from PayPal Ventures, Franklin Templeton launching its Bitcoin ETF, and Circle filing for an IPO.

Over the course of the next 11 months, movement in the crypto world will continue to be slow and adoption will still be cautious. However, we can expect to see the fear of decentralized finance begin to melt away as organizations begin to realize the cost savings and efficiencies in the space.

Photo by pratik prasad