Revolut, a challenger bank based in London, has raised $66m in funding from the likes Index Ventures to expand its services in the UK and around the world.
The startup launched its app in July 2015 with the purpose of offering free international money transfers and fee-free global spending to its customer base, made up of consumers and small businesses.
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This new funding will allow Revolut to go global, starting with Asia and North America, as it attempts to assert itself as the number one platform for consumers and businesses to manage their finances.
The recent investment round values the company at around $3.8m.
It takes foreign exchange business away from banks and enables its customers to exchange and transfer money without charges.
Customers can purchase a pre-paid Mastercard for small fee, which can be used to take money out in ATMs across the world for no fee.
It offers this through access to the interbank rate, at which banks provide finance to one another. Usually currency provides charge fees of around 3 percent above this interbank rate.
Co-founder Nikolay Storonsky, who used to work for Credit Suisse and Lehman Brothers, set up the company after wanting to find a solution to the expensive fees customers are charged for foreign exchange.
He has said he plans to obtain a banking license and add services such as travel insurance to Revolut’s roster.
As well as the $66m investor funding, Revolut also carries out regular crowdfunding rounds to allow its 700,000 European customers to own a slice of the company.
It will be running a new $5m crowdfunding scheme soon, which is giving its Premium members priority access to invest in the startup.
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TransferWise was launched by two friends Kristo Kaarmann and Taavet Hinrikus to eliminate the high bank fees from foreign exchanges.
Instead, it allows its customers to send money using the real exchange rate, eliminating fees with peer-to-peer exchanges.
As it’s been around since 2011, it has a wider share of the market than Revolut, supporting 300 currency routes.
Another challenger bank, Monzo has a glowing reputation across London and the UK. It’s fairly similar to Revolut because of its pre-paid Mastercard and it helps its users understand their spending with analytics accompanied with the occasional emoji.
One of the reasons for its popularity is that it shows purchases in real time on the easy-to-use app, instead of waiting two to three days later.
Earlier this year, Monzo raised $25m in funding, bringing its total valuation to around $83m. Not bad for a starter bank.
Circle is a peer-to-peer payments app. It lets you transfer money easily to friends and is backed by the likes of Barclay’s.
It recently announced that you can now send cross border payments for free, similar to Revolut and Transferwise, to make it easier for its users across the UK, US and Europe to send and receive money.