Dutch Banking Challenger Bunq to Acquire €160M in Capital at €1.65B Valuation, Deal Includes SME Lending Platform Purchase

Dutch banking challenger Bunq has reportedly committed to a €160 million round at a €1.65 billion valuation. Bunq will also be acquiring a small business lender as part of the transaction.

Bunq’s latest investment round was joined by an unnamed UK-based private equity company.

As reported by Dutch news outlet Het Financieele Dagblad, Bunq’s management recently agreed to the deal – which is a considerable increase from the Fintech’s previous €10 million round back in 2018, which was from company Chief Executive Ali Niknam.

Bunq managed to reach  €1 billion in user deposits, earlier this year, which is roughly double what the the digital banking platform reported in 2020. The company is now offering financial services in all EU nations as well as the United Kingdom.

Niknam had been hinting or suggesting for a fairly long time that the Fintech was focused on acquiring additional capital. Niknam has notably invested around €100 million of his own assets into the firm during the past 7 years.

The Het Financieele Dagblad confirmed that Bunq’s round is awaiting customary regulatory clearance as the financial regulator in the Netherlands will have to officially approve the transaction, which includes Bunq’s plans to purchase an SME lending platform from the private equity company.

It’s worth noting that Bunq has never provided clear details on the actual size of its European client base. The company has not offered detailed statements on its turnover or whether it has become a consistently profitable venture.

As covered last month, Mastercard announced that it named European challenger bank Bunq the first European issuer to launch Mastercard’s True Name feature across Europe to support transgender and non-binary communities. According to Mastercard, the feature enables cardholders to leverage their chosen name on their card offerings, removing a pain point for many in the LGBTQIA+ community.

As reported in December 2020, Bunq had managed to grow its mortgage portfolio by 400% within six months. Bunq began offering mortgages to Dutch clients in July 2020.

The digital bank had teamed up with third-party broker, asset manager NN IP, in order to provide these new investment options. NN IP would provide the loans via Bunq’s app, with the digital banking platform diverting approximately €100 million in customer deposits to assist with funding the initiative.

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