First the Netherlands came for British share trading, now Dutch neobank bunq is challenging Revolut for its European customers on the back of a $228m Series A round. The raise is hailed as the biggest European Series A round ever.

The funding round marks an end to founder and CEO Ali Niknam bootstrapping the challenger bank himself, having poured $116.6m into the venture since the launch in 2012. That being said, he did top up bunq’s coffers in the bank’s first funding round too. It is not clear by how much he contributed to the latest cash injection, though.

Alternative investment management firm Pollen Street Capital provided the remaining capital for the Series A, which brought bunq’s valuation to $1.9bn, officially putting it into the unicorn club.

“Everything has a right time,” Niknam told TechCrunch about the decision to seek outside capital. “In the beginning of bunq, it was important to get a laser user focus in the company. Having to also focus on fundraises and the needs of investors distracts. bunq now is mature enough to start scaling up significantly, so more capital is welcome.”

The neobank will use the money to acquire smaller firms, having already announced the acquisition of Capitalflow Group, which Pollen Street Capital used to own.

The strategy hints that the neobanking segment of the fintech industry is consolidating. Revolut’s founder Nik Storonsky told the Financial Times early on in the pandemic that Covid-19 presented the challenger bank with ample opportunities to buy startups on the cheap as he expected many to struggle because of the health crisis. Maybe Niknam was listening.

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The new funding round has been celebrated as the biggest European fintech Series A raise ever. It is certainly bigger than ones raised by bunq’s direct competitors. Revolut, for instance, raised a $14.15m and a $8.73m Series A round in 2016, according to GlobalData’s Technology Intelligence Centre. The same year, Monzo raised $7.25m in its Series A round. German rival N26 raised €10m in its Series A in 2015.

That being said, bunq still has a long way to go before it can truly topple Revolut as the leading European challenger bank. Not only did the the British banking business ensure a $5.5bn valuation at the start of 2020 after a $500m raise, but Revolut is also rumoured to be on the cusp of securing a $1bn funding round that could see its valuation skyrocket to between $30bn and $40bn.

Another sign that bunq is not on even footing against its British competitors is that it currently doesn’t have a UK banking licence. This forced the Dutch fintech to pause sign-ups of new Blighty-based users in May, despite having teased N26 in January 2020 for pulling out of the UK because of Brexit.

“Fear not: bunq is here to stay,” Niknam said at the time.

Existing customers in the UK can still use the app.

bunq is not profitable yet, but plans to start breaking even on a monthly basis this year. Both Starling and Revolut broke even in the months leading up to the start of 2021. However, Revolut’s losses had grown from £106.5m in 2019 to over £200m in 2020.

bunq is part of the wave of digital lenders to have emerged across Europe over the last decade. These challenger banks aim to capitalise on incumbent banks’ struggles to balance their books since the 2008 financial meltdown, as described in GlobalData’s Beyond the Hype: Insight into Digital Challenger Banks thematic research report.

Consequently, customers have been faced with higher costs, which has prompted them to embrace digital alternatives like bunq, Revolut and N26 with open arms.

bunq’s Series A funding round comes as the Netherlands is increasingly capitalising on Brexit. In February, it was revealed that Amsterdam had displaced London as Europe’s biggest share trading centre.