UK digital bank Kroo is approaching investors for a £70 million funding round with the goal of reaching profitably within two years of its launch in December 2022.
Since opening for business, Kroo is approaching three quarters of a billion pounds in deposits and 130,000 current account customers, with a target to reach a million customers by 2025.
Kroo has already raised £75M to build and grow the bank. As it enters its Series C funding round, it is looking to raise £55M - £70M to develop its product offer, grow its customer base and build its loan book. As the scale of the investment grows, Kroo is targeting family offices, institutional investors, venture capitalists and private equity in the UK, US and Europe.
Kroo currently offers a digital current account paying two percent interest, overdrafts and zero fees on debit card spending abroad. The latest product update, set to go live on 15 October, provides transparency on the interest rate offered to its customers - via a ‘tracker’ rate set at 0.9% below the Bank of England’s base rate - challenging the traditional profit extraction model that uses teaser deals to hook customers in without supporting them long-term.
Andrea De Gottardo, CEO of Kroo, says: "Despite rising interest rates, customers have become used to earning little or nothing on their cash, whilst banks have made record profits. Kroo is changing an outdated model by putting money in people’s pockets, not into bank profits.
“We have ambitions to show it's possible to create a successful bank that rewards loyalty and shares its success with customers. Whether rates go up or down, we’re committed to only earning 0.9% on the base rate. 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.”