Savings app Chip raises £4m in crowdfunding record

Savings app Chip has raised £4m in its series A funding round on crowdfunding platform Crowdcube.

The company aims to be the leading savings account in the world following the recent success of challenger banks Monzo and Revolut.

The latest round of funding included over 7,000 investors, a UK crowdfunding record according to Chip, beating the previous record held by Monzo by nearly 600 investors.

In the UK the average adult saves less than 2 per cent of their income and receives less than 1 per cent interest, according to Chip. The app automatically transfers money in to a savings account, the value of which is determined by an AI-powered algorithm.

The algorithm calculates how much the account holder can afford to save each month and transfers it in to the account which offers up to 5 per cent interest.

The raised capital will go towards launching the company’s latest products in 2019, including ChipX.

Competing with the UK’s credit market, ChipX will enable its users to gain a return by lending to other users attempting to reduce their overdrafts.

Alex Latham, Chip CMO, said in the announcement: “We are becoming the challenger bank for savings and the enthusiasm of our savers to invest in the company is a fantastic endorsement.”