- Investors have just backed Volt to the tune of $70 million, after the Australian neobank closed a Series C funding round.
- The latest injection, $10 million over target, brings the digital bank’s total equity to $100 million.
- It’s a mark of the enthusiasm for digital banking, all despite the fact Volt’s products won’t open to the public until February.
- Visit Business Insider Australia’s homepage for more stories.
One of Australia’s first neobanks is amassing a war chest.
Volt, the first digital bank to be granted a full licence in the country, has just received an additional $70 million cash injection from investors.
“The high levels of interest we are receiving from potential banking partners validates our platform-based business model and the neobanking sector as a whole,” Volt CEO and co-founder Steve Weston said in a statement.
The Series C funding brings the bank’s total equity to a formidable $100 million. Not bad for a bank, which is still rolling out to its 41,000 customer waitlist, and which only released details of its saving account last week, with transaction accounts not coming until April.
“The fintech scene in Australia is growing extremely quickly right now. We’ve seen a number of large private capital raises and IPOs, and the neobanks are on track to grab a decent chunk of the big four banks’ market share so there will be a lot of value created for investors,” Weston told Business Insider Australia separately.
It’s not stopping at $70 million either. It’ll now open up a Series D funding round targetting investors from the UK and the Middle East.
“Key to our ultimate global scale is the development of our platform strategy. We are now raising more capital to invest in the development, integration and onboarding of partners that will open up new customer bases with both Volt-branded and white-labelled banking products,” Weston said.
In other words, Volt is kicking into gear the strategy it believes will propel it into being “a much bigger bank” — namely by partnering with existing companies and businesses and offering its service to potentially millions of customers.
“We are also seeing banking partners and institutions showing both interest and confidence in our platform-based banking strategy. Platform-based businesses, such as Amazon and Alibaba, have generated massively outsized returns for investors and we are the only Australian neobank blazing a similar trail.”
However, if the bank is to capitalise on its chance to disrupt the billion-dollar big banks — Weston and other co-founders maintain digital banks only need a very small piece of the pie to be profitable — it may need even more dosh. Particularly if it wants to keep expanding before it launches mortgages — the most profitable part of a bank’s business — in the second half of 2020.
Volt has also revealed it is eyeing a float on the Australian Securities Exchange (ASX), opening up the business to average investors. As previously revealed by Business Insider Australia, Volt ranked as the third-best startup to work for in Australia last year — its North Sydney workforce has swollen to 160 employees with a view to recruit 200 people by the end of the year.
It’s not the only road neobanks have been going down for funding. Fellow digital bank Xinja went the equity crowdfunding route, raising more than $5 million in two record-breaking rounds.
86 400 meanwhile is wholly-owned by UK payment service company Cuscal — a dependence which has rubbed some of its competitors the wrong way.
While those figures may pale in comparison to the Commonwealth Bank, which sports a market cap of $142 billion, the investment shows that people are buying into the neobank narrative.
The next 12 months will show whether or not the bet pays off.
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