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Bunq closes first external fundraise as it cements unicorn status

The digital bank also made its first acquisition as part of the fundraise, buying Irish alternative lender Capitalflow Group to help it tap into the SME lending market.

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Ali Niknam/Bunq

Unlike most other fintechs, Dutch challenger bank Bunq has never raised capital from external investors—until now.

The digital bank has closed a €193m Series A funding round led by fintech-friendly Pollen Street Capital and has solidified its position as a unicorn, hitting a valuation of €1.6bn.

Rumours first swirled about Bunq’s first-ever external fundraise earlier on this year from an undisclosed British private equity firm, which we now know to be Pollen Street Capital.

Having put €98.7m of his own money into Bunq since 2012, CEO and founder Ali Niknam certainly took his time finding a compatible investor for his bank.

“Given my experience with these things it was really important to find an investor that, on the one hand, had the right set of values that matched ours. And, on the other hand, someone that brought more to the table than just a bag of money,” Niknam told AltFi.

“Pollen has the same drive for sustainability that we have and they also had Capitalflow in their portfolio, which would help us to become more profitable.”

As part of the funding round, Bunq also made its first acquisition in Capitalflow Group, an Ireland-based lender to help the digital bank branch out into SME lending, although Bunq will stay in Capitalflow’s native market, Ireland, for now.

The acquisition of Capitalflow will also help Bunq continue on its profitability path, first reaching profitability in April 2021 on its own accord, with Niknam expecting Bunq to “become consistently profitable.”

“Being profitable comes back to sustainability. To us being sustainable also means having healthy business practices and, this might sound old fashioned, but as a business, you need to make a profit and ultimately you need to have a business model that is able to generate that,” Niknam added.

Reaching profitability was not the only milestone Bunq hit in April 2021. The digital bank also saw its user deposits top €1bn, more than doubling on the year before.

Bunq has also put down roots outside its native Amsterdam, opening offices in Rotterdam and Cologne, Germany in the last six months.

Earlier this year, Bunq became the first fintech to join the TARGET Instant Payment Settlement network developed by the European Central Bank.

The move will give Bunq’s users access to instant payments with banks both in its native Netherlands, but also across Europe too. 

Bunq is also still helping its customers to go carbon neutral, having planted 3.7m trees on their behalf in partnership with the Eden Reforestation Project.

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Ali Niknam

CEO and founder


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