The last thing you want is to be starting over from scratch after an investment in your company goes belly up. Fortunately, you can avoid that fate with a deal financing program.

In mid-June, challenger bank Bunq raised a $1.9 billion Series C investment round from investors including New York Stock Exchange-listed Japanese telecommunications company Softbank Corp. and Investment Fund Norway, which is owned by the Norwegian government. The round valued Bunq at $3 billion pre-money, a significant increase from the roughly $350 million it had raised in previous rounds.

Challenger Bank Bunq Lands First Outside Investment at $1.9B Evaluation

In its first external investment round, Dutch challenger bank bunq announced today that it has raised €179 million ($228 million) in funding, bringing its valuation to €1.6 billion ($1.9 billion). The financing was led by Pollen Street Capital, which provided €168 million for a roughly 10% stake in the company. In addition to Pollen Street Capital, Ali Niknam, the founder of bunq, has also contributed an additional €25 million.  So far, Niknam has self-funded the company since bunq was founded in 2013. Prior to today’s announcement, Niknam had already invested $116.6 million of his own money in the company. As the sole investor in the company, Niknam carefully selected a strategic partner with common goals. Nicknamed about his decision to partner with Pollen Street Capital, said: bunq was founded to challenge what banking is and can be. By putting our users first, we have created a bank that aims to make life easier in a sustainable way. We are delighted to join forces with Pollen Street Capital to further expand The Free Bank in Europe. Given its multi-year growth, the $228 million raised by bunq is the largest Series A funding for a European fintech.

Bank of the future

As a non-bank, bunq prides itself on the absence of office visits, queues and paperwork, which is the way of the future. Thanks to the Easy Bank feature, accounts can be opened via the mobile application in just five minutes. Once set up, users have access to a digital banking platform where they can send and receive money, share a payment link with others, and split payments between different accounts. The concept of neo-banking has gained tremendous popularity recently, with several fintech companies vying for market share in Europe. Bunq has become one of the most successful companies and has expanded its services to over 30 countries in Europe. Earlier this year, the bank also announced that it had reached the EUR 1 billion mark in deposits.

Besides the appeal of easy and convenient mobile banking, bunq also prides itself on its sustainability initiatives. For example, bunq plants a tree for every 100 euros spent with the loyalty card. In addition, bunq users can decide for themselves how to invest their money in their accounts. Users can select green or socially responsible companies, or simply turn off the option if they don’t want to invest their money.

Start of mergers and acquisitions ?

This was not only bunq’s first private financing round, but also its first entry into the M&A market. As part of the capital injection, bunq also acquired Capitalflow Group, a credit company previously owned by Pollen Street Capital. The company provides loans to small and medium-sized enterprises in its home country of Ireland. To date, it has provided a total of EUR 650 million in aid in the country. In addition to expanding the credit space, this initiative could indicate that raising additional capital could facilitate more mergers and acquisitions in the near future.