Space for one more? The UK’s digital banking space might just be heating up once more.
Image source: Andrea de Gottardo /Kroo
Kroo, a UK fintech aiming to win a bank license, has raised £17.7m in its Series A funding round as it looks to secure a banking license.
Launched in February 2019, the firm is initially offering a prepaid debit card.
The funding will support its mobilisation phase, ahead of its launch in early 2022, and grow its team and working towards securing a full banking license.
Andrea de Gottardo, Kroo’s CEO, told AltFi that he doesn’t agree the UK neo banking space is a crowded market.
“There is a feeling that the digital banking market is really crowded but when you actually analyse the market dynamics, Monzo and Starling are the only two fully authorised digital banks that are offering a personal current account”
“There are a number of others that do not offer a personal current account but we really feel our competitors will be Monzo and Starling.”
Revolut, which bills itself increasingly more as a ‘super app’ is also pursuing a UK banking license
De Gottardo says he fintech will differentiate itself from the UK giants of digital banking by building a bank more focused on ‘social features’, prompting groups to act together on financial matters.
“Monzo has bits and pieces of that but we are going way deeper,” he said.
It is currently when a customer successfully refers a friend, Kroo plants 20 trees with the aim of creating a forest of 1 million trees.
“We’re helping each community of friends to build up their own forest but that is just the starting point with many other initiatives that will be leveraging the social good.
In addition, he adds that it will further look to draw a line in the competitive space by appealing to peoples’ “social conscience” and will eventually donate a percentage of profits to social causes.
In pursing monetisation, he also says that the firm has learnt several lessons from early firms in the sector and will be pursuing a more traditional route to revenue growth via growing lending volumes.
The round was led by Rudy Karsan, an entrepreneur who sold HR platform Kenexa to IBM in 2012 and runs founder of Karlani Capital.
Karsan says: “The reason I’m excited about Kroo is that it has a concrete opportunity to dramatically change the way people feel about their bank, for good. Kroo has an exceptionally talented management team and a nimble tech stack that will enable the continuous delivery of banking features customers really care about. I’m confident Kroo is building a sustainable bank and am excited to support them on the next stage of their growth journey.”