Challenger bank Bunq has seen its valuation top €1 billion following a Series A funding round that raised €193 million.
UK private equity firm Pollen Street Capital and Bunq founder Ali Niknam took part in the round, which Bunq said marked the largest ever Series A round secured by a European fintech and values it at €1.6 billion.
As part of the deal, Bunq has acquired Capitalflow Group, a privately-held Irish lending company, which has “strong ties” to the Irish business community.
The bank said it will incorporate M&A as a business growth strategy.
It is the first time that Bunq has raised capital externally, having been founded in 2021 by Niknam, who invested €98.7 million of his own capital.
James Scott, partner at Pollen Street Capital, said: “Combining the SME lending expertise of Capitalflow, the digital execution capability of bunq and the ‘customers first’ approach of both Capitalflow and bunq creates a really exciting, high-growth and self-sustaining platform with a pan-European reach that will mark a new standard in European digital banking.”
Bunq also announced it has become profitable, attributing its first profitable month to its sustainable growth strategy.
Niknam added: “By putting our users first we have created a bank that is super focussed to make life easy in a sustainable way. We’re extremely excited to join forces with Pollen Street Capital to further expand the bank of The Free throughout Europe.”