Kroo, the digital banking startup based in the UK, is gearing up for its next significant investment endeavour.
The recent research commissioned by the bank sheds light on the palpable mistrust in the banking sector. The study showcases that a staggering 70% of survey participants believe their bank doesn’t prioritise their best interests. A mere 22% think of their bank as transparent.
Having made significant strides in the financial world, Kroo has consistently adjusted its interest rates, ensuring they align with every Bank of England rate increase. Pioneering a novel approach, their recent product introduction promises customers a ‘tracker’ interest rate, 0.9% less than the current Bank of England rate.
The forthcoming product update, due to be launched on 15 October, champions transparency. It aims to challenge the conventional profit-driven models that utilise tempting offers without ensuring long-term customer support. Given that a sizeable 42% of the participants found it challenging to decipher interest calculations, Kroo’s ‘tracker’ rate simplifies this aspect, reinforcing their pledge to adjust customer interest rates according to fluctuations.
Kroo has made remarkable progress in the banking landscape since its inception. With a previous investment of £75m fuelling its growth, the bank is on the cusp of its Series C funding round. This round aspires to secure between £55m and £70m. These funds will drive product development, expand the customer base, and refine its loan offerings. For this endeavour, the bank has set its sights on a diverse investor range, spanning family offices, institutional investors, venture capitalists, and private equity firms, not just in the UK but also in the US and Europe.
The ambition is clear: Kroo aims for profitability upon concluding the Series C funding. Since the rollout of its current account in December 2022, Kroo has been a formidable contender in the challenger bank sector. Their rapid ascent is evident in their recognitions, with mentions in Sifted’s list of the top 10 fastest-growing fintechs in Europe in August and OTTA’s 2022 fastest-growing companies.
In terms of numbers, since its December 2022 launch, Kroo has accumulated nearly three quarters of a billion pounds in deposits, boasting 130,000 current account customers. The aspiration doesn’t stop here; they aim to captivate a million customers by 2025, supported by their robust team of 250 personnel spread across their Manchester and London bases.
Kroo CEO Andrea De Gottardo said, “Our research shows people in the UK feel their banks lack transparency and don’t have their best interests at heart. This comes from the profit extraction model being unchallenged for too long. Kroo is changing an outdated model by putting money in people’s pockets, not into bank profits.
“Our growth in the last nine months shows there is an appetite for better banking. We want to challenge the traditional banking model for the better. Our tracker rate is the first in the market and the latest in a range of products we’ve created to show customers we’ve got their backs.”
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