Bunq: The Revolut challenger for digital nomads that’s taking Europe by storm – AltFi

Distant working and digital nomads have change into synonymous with the long run world of labor. Supercharged by the pandemic, these tendencies are reshaping the financial system, with tens of millions of individuals realising their dream of residing in a single nation while incomes their cash in one other.

In opposition to this backdrop of change, Amsterdam-based Bunq has change into the EU’s second-largest neobank after Revolut. Based in 2012 by serial entrepreneur Ali Niknam, the corporate’s chief govt officer, Bunq has grown in tandem with the rise of the digital nomad — the demographic it caters for solely.

A yr to recollect

It’s been a busy few years. In July 2023, Bunq introduced it had surpassed 9 million customers and greater than €4.5bn in deposits. In the identical month, it revealed it had secured a recent €44.5m in development capital, which means the previously bootstrapped financial institution has raised almost €100m this yr alone, regardless of a market downturn. After ending 2022 on a quarterly revenue of €2.3m, Bunq has predicted year-long profitability for 2023.

“We’ll at all times go the place our customers go,” Niknam advised AltFi. “Because the starting, we’ve been strongly user-focused. These development figures are a proof level in direction of how a lot our customers worth us, and the way a lot they respect our merchandise.”

This sentiment is shared amongst the broader trade. “Bunq has a powerful and daring narrative,” added Jan-Jaap Omvlee, a Dutch fintech commentator and technique director at Cognito Media. 

“It’s a narrative that sticks, and so the corporate is ready to develop its buyer base and enchantment to traders. The story is just not about expertise, and infrequently not even in regards to the product — it’s in regards to the folks Bunq desires to service and connect with. It’s a well-defined narrative that persons are keen to enroll to.”

Niknam and his staff pleasure themselves on assembly the wants of intrepid digital nomads. For instance, in response to consumer demand and buyer suggestions, Bunq lately launched what it claims is a singular function by European requirements: 2 per cent cashback on public transportation and 1 per cent on eating places and bars. The financial institution additionally now provides 3.71 per cent curiosity on US {Dollars} and British Kilos to additional assist its location-independent customers. 

Sustaining The Focus

Because it continues to develop, Bunq will keep away from spreading itself too skinny. “Our development will come from an ever-increasing market share in a market that’s rising itself, and by increasing the geographies we function in,” added Niknam. “It’s very troublesome to totally give attention to a number of consumer demographics with the depth and thoroughness it requires. And there isn’t a enterprise want so as to add the complexity of further consumer demographics.”

By listening fastidiously to its buyer base, Bunq is assured it is going to create long-term worth for its customers. Niknam rightfully prioritises this forward of short-term positive factors, which maybe explains the disagreement, about tempo of development and valuation, with minority shareholder Pollen Road Capital final yr. 

“We’re not constrained, or pushed, by short-term objectives,” defined Niknam. “Our set-up has at all times been about long-term worth creation for our customers — and that’s beginning to repay now.”

In addition to the cashback function and better rates of interest for savers, which Niknam hopes will assist present a “borderless expertise”, Bunq can also be rolling out CO2 insights, which permit customers to watch, and mitigate, the impression they’re having on the atmosphere. Clients can even have the ability to comply with the progress of Bunq’s appreciable reforestation efforts by a devoted dashboard. 

This sits properly in step with what customers now anticipate from their banks. In response to CRIF’s Banking on Banks 2023 report, two-thirds (66 per cent) of Europeans say they’re extra more likely to financial institution with an organization that’s clear about its operations, while almost half (45 per cent) need their financial institution to inform them how their spending impacts the atmosphere.

“Digital nomads are actually seeing the world altering as they journey throughout it,” defined Niknam. “Our intention is to supply them with instruments to make them extra conscious of their impression, and in addition instruments that assist them to simply offset a part of that impression.”

Heading West

The vast majority of Bunq’s prospects are in Europe, however Niknam now sees a substantial alternative within the US. 

In April 2023, Bunq started the method of acquiring a US banking license and plans to focus on expats from Europe who’ve crossed the Atlantic however nonetheless have roots again dwelling. 

“Our transfer into the US is absolutely impressed by the whereabouts of our customers, and so is our product improvement,” stated Niknam. “Our days begin and finish with our customers — we’re guided by them.”

Niknam is bullish about Bunq’s future. “There’s an outdated baby’s story in regards to the Tortoise and the Hare, and I believe it is going to be true for Bunq as properly,” he stated. “The fintech sector has been spoon-fed capital and liquidity, leading to many individuals having by no means skilled a downturn, and by no means being introduced up with the monetary self-discipline required in such a interval. I’m happy with our strategy, so let’s now see what the long run will carry!”

Omvlee agrees it’s a successful proposition. “Bigger, extra conventional banks attempt to keep forward of change by quantity,” he added. “They provide a ‘one-size-fits-all’ answer, and fail to supply bespoke options to smaller audiences.”

“The agile strategy of neobanks like Bunq, N26 and Revolut permits these digital-first suppliers the chance to cater to smaller teams, with out flipping their price base. For incumbent banks, it’s just about inconceivable to compete on this area — and possibly they need to not even strive.”