Ireland: Challenger Digital Banks

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Ireland: Challenger Digital Banks

Revolut, N26, Holvi, and Monzo are the top challenger digital banks in Ireland. It is of note that Starling Bank of the UK will be expanding to Ireland.

HOLVI

  • Holvi was founded in 2011 as a private company, and launched in Germany in 2016. They operate in Germany, Finland, and Austria. From 2017 to 2018 they saw year-on-year growth of 60%.
  • Holvi has raised 4.3 million Euros over six funding rounds. Their last round was in 2015.
  • The majority, 85%, of their customers are freelancers.
  • Holvi has over 150,000 micro businesses across Europe as customers.
  • They describe themselves as "a simple one-stop-shop for small businesses to collect income, manage expense and get an understandable real-time view of their company finances. New Holvi accounts can be opened in minutes online and Holvi customers don’t need a separate bank account."
  • Holvi was voted the "Hottest Startup in Helsinki".
  • E-Residents may business bank with Holvi.
  • Their website may be viewed here.
  • REVOLUT

  • Revolut was founded in 2015 and is based in London. In 2017, they reported $15.67 million in revenue, and $17.31 in 2018. From 2016-2017, their revenue growth was 443%. They offer personal and business products. Revolut launched in Germany in 2017.
  • Their market valuation is currently $1.7 billion, with $336.5 million in total funding over 12 rounds, with the last being March 27, 2019. They are a private company and considered a tech unicorn.
  • Revolut has completed a total of 350 million transactions at a total value of $48.9 billion.
  • Revolut states they have 7,000 new accounts opened daily.
  • They have nearly 20,000 businesses as customers, along with 4.5 million customers total. In the UK, they have 1.6 million customers.
  • Businesses may hold, receive, and exchange 29 currencies without charge.
  • Revolut claims they are ten times cheaper than a bank.
  • They have had significant reported losses.
  • Their business customers have an Open API to integrate their Revolut account into their current workflow and stack.
  • Revolut operates in Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland and the United Kingdom.
  • Their website may be viewed here.
  • N26

  • N26 is a Berlin bank that operates in 20 countries in Europe. They have 2.5 million customers worldwide and were founded in 2013. They are a Late Stage Venture and have raised $682.2 million in funding over seven rounds. Their latest round was July 2019.
  • N26 has a current market valuation of $3.5 billion.
  • In 2017, they generated revenue of 11.24 million Euros which was a 2000% increase over 2016.
  • In late 2018 they had two million customers. They currently have over 3.5 million. Their monthly transaction volume exceeds 1.5 billion Euros.
  • N26 offers banking for freelancers and the self-employed.
  • They operate in Germany, Austria, France, Italy, Spain, Portugal, Ireland, Greece, the Netherlands, Belgium, Luxembourg, Finland, Latvia, Estonia, Lithuania, Slovakia, and Slovenia.
  • N26 is planning to expand to the US in 2019.
  • Their website may be viewed here.
  • MONZO

    • MOnzo is a London based digital bank that was founded in 2015, by Gary Dolman, Jason Bates, Jonas Huckestein, Paul Rippon, and Tom Blomfield. They are a private company with a Late Stage Venture funding status. They offer personal and business products.
    • The current market valuation is $2.45 billion.
    • Monzo has raised $397.56 million in funding over 14 rounds. Their latest funding round was on June 25, 2019.
    • They currently have 2,797,950 customers total.
    • Monzo launched business accounts for 100 sole traders this year. Currently there is a wait list with over 15,000 businesses.
    • They are adding help with taxes, international payments, payroll multiple payments, and payments by a link for business customers.
    • Their website may be viewed here.

    STARLING BANK

    • Starling Bank plans to open a subsidiary in Ireland later this year with a staff of 10-30 people. They have submitted their application to the Central Bank of Ireland.

    MARKET INFORMATION

    • At the end of 2017, there were 58 banks in Ireland.
    • Contactless accounts for over 28% of the volume.
    • New lending to SMEs rose by 10% during 2017-2018.

    Research Strategy

    To locate the top challenger digital banks, we first located industry articles that stated who the best digital challenger banks were. To be included in the next stage of our research, a bank had to be mentioned multiple times. Once we had our list, we then researched each bank separately to obtain an across the board metric. This proved difficult, as some banks did not list their annual revenue. We believe this happened because some banks are operating at a loss due to how new they are. Our next approach was to order them by their customer numbers. This again proved difficult, as the biggest bank we researched did not separate their customer base, and some banks only do business banking. Active users and monthly transactions also ran into the same issues. To combat this problem, we holistically looked at all the metrics we obtained to get our top listings.

    To assess the market penetration, we began by locating industry reports and market studies. This did not give us enough information to triangulate a market share, as most of the information was global. Consulting business press releases from Globe Newswire, PR Newswire and from each business’ website gave us the bulk of our information. To finish our research, we researched available banking information from the government. Again, this gave us a few facts. Ultimately, we were able to put together a snapshot of the market, but not exact figures.
    Sources
    Sources

    Quotes
    • ""Challenger business banks include: • 01 | Revolut • 02 | Starling Bank • 03 | Soldo • 04 | Mettle • 05 | Countingup • 06 | Cashplus • 07 | Tide • 08 | Monzo • 09 | CardOneMoney""
    Quotes
    • "According to the report, the global digital banking market was valued at approximately USD 6,620 million in 2018 and is expected to generate around USD 8,646 million by 2025, at a CAGR of around 3.8% between 2019 and 2025."
    Quotes
    • "The Online Banking Market size is expected to reach $29,976 million in 2023 from $7,305 million in 2016, growing at a CAGR of 22.6% from 2017 to 2023. Digital banking includes all kinds of online/internet transactions done for various purposes. It is the incorporation of new technologies, to deliver enhanced customer services."
    Quotes
    • "Current account switching rates in Ireland are incredibly low at less than 0.10% - and have been for quite some time. Unlike with other household services such as energy and broadband, we tend to harbour incredible inertia in Ireland when it comes to switching financial institutions and current accounts in particular."
    • "N26, formerly Number26, is such a weird entry to this list. N26 is a European bank which is allowed operate in Ireland which we’ve gone on about that in the past. Their app is fantastic. You can access with fingerprint, block and unblock a lost, stolen or found bank card and categorise all your spending; whether that’s good or bad. When you buy something, you get a notification to your linked smartphone straight away. Whether that’s useful or not, I don’t actually know."
    • "I really loved N26 when it launched, mainly because of the digital onboarding and the really cool app that tells you how your spending. After a while, I just fell out of love with N26 and went back to using my Irish bank account. Fast forward a few years and I started using Revolut. Revolut describes themselves as “your digital banking alternative” and they generally do deliver on that."
    Quotes
    • "BBVA-backed start-up Holvi will expand its offering to micro businesses in Ireland, Italy, Belgium, France and the Netherlands after reaching a 150,000-customer milestone, reports Jane Connolly."
    • "Holvi has been providing business banking in Germany, Austria and Finland for over three years and has seen year-on-year growth of 60% from 2017 to 2018."
    Quotes
    • "Starling Bank, the UK mobile-only challenger bank, has submitted an application for a full banking license with the Central Bank of Ireland as it readies a launch here later this year."
    • "Chief executive Anne Boden said the bank, which currently has some 460,000 personal current accounts and 30,000 SME accounts in the UK, will “definitely” set up a subsidiary in Ireland later this year to service the Irish market, with a staff of between 10 and 30 people."
    Quotes
    • "The two digital providers that have the most customers in Ireland are N26 and Revolut. There is also a newer arrival called Monese which has recently revised it’s pricing to compete with Revolut."
    • "N26 bank was launched in Germany in January 2015 and has been available to Irish residents since December 2015."
    • "N26 has more than 3.5million customers across Europe and they currently carry out transactions worth over €2billion a month."
    Quotes
    • "At the moment, businesses in Ireland have three main options for banking – Bank of Ireland, AIB and Ulster bank. "
    • "Revolut This challenger bank started with personal accounts, scooping up 40,000 customers in just their first year. Now they’ve expanded to business, with some of our clients using their business accounts. Our team have tested it out and what we like about it is that it handles currencies very well. Revolut promises a low cost per conversion by guaranteeing a conversion rate very close to the base conversion rate. This is completely the opposite to how the ‘pillar’ banking systems in Ireland work, as they seem to overcharge as a matter of course. "
    • "N26, or Number 26 as it was formerly called, is a German challenger bank that is fully licensed by the European Central Bank and locally regulated by the Central Bank of Ireland. They have only recently added business accounts to their service offering and it is aimed at sole traders. They too boast of low conversion rates for foreign currencies, claiming to be 6X cheaper than regular banks. N26 has the prestige of being Europe’s most valuable start-up with a $2.7 billion valuation. "
    • "Monzo is a tech unicorn being one of the fastest-growing digital only banks with offices in London, Cardiff and Las Vegas. With just four years in business, Monzo now has over 1.3 million customers and a valuation of £1 billion. With investors such as Stripe backing them, we only expect continued growth for the startup in the coming year. "
    Quotes
    • " Revenue£12.8 MFY, 2017 • Market Valuation$1.7 B2018-04-26 • Total Funding$336.5 M "
    Quotes
    • "Revolut is a digital banking alternative for instant payment notifications: free international money transfers and global fee-free spending."
    • "Founded Date Jul 1, 2015Founders "
    • "IPO Status PrivateCompany "
    • "Revolut currently supports spending and ATM withdrawals in 120 currencies and sending in 26 currencies directly from the mobile app. The company is based in Wharf, London and was founded in July 2015."
    • "Revolut has raised a total of $336.4M in funding over 12 rounds. Their latest funding was raised on Mar 27, 2019 from a Venture - Series Unknown round."
    Quotes
    • "A global business current account for easy international payments, with prepaid business cards and an Open API."
    • "Hold, receive and exchange 29 fiat currencies without any hidden fees"
    • "Transfer money to any other Revolut account (business or personal) instantly and for free. Save on transfer fees when you make payments to businesses around the world."
    • "Our Open API allows you to seamlessly integrate your Revolut business account into your workflow. Use it to automate cross-border business payments, send payouts to clients or employees and monitor transactions according to your business’ needs."
    Quotes
    • "Revolut for Business is currently available for companies registered and with a physical presence within the European Economic Area (EEA) and Switzerland. This includes the following countries: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland and the United Kingdom "
    Quotes
    • ""SPEND IN OVER 150 CURRENCIES AT THE INTERBANK EXCHANGE RATE INSTANT SETTLEMENTS CROSS-BORDER PAYMENTS MULTICURRENCY CARDS INTEGRATIONS BUSINESS OPEN API""
    Quotes
    • "It has already attained the status of a tech "unicorn" - a term used to describe private start-ups valued at more than $1bn (£740m)."
    • "As of March, Revolut says it reached 4.5 million customers - 1.6 million customers are located in the UK alone."
    • "Revolut is currently valued at $1.7bn (£1.3bn) from its most recent fundraising. The three-year-old firm's growth has been impressive - its customer numbers trebled to 1.2 million in 2017, while revenues increased five fold to £12.8m. In September, Revolut said 7,000 new accounts were being opened a day, and that it was processing $3bn in transactions a month "
    Quotes
    • "On 22.2.2019, Revolut achieved 4,000,000 customers. It is signing up over 10,000 new customers every day, compared to around 7,000 day just six months ago. Revolut has boosted its Weekly Active Users (WAU) from 500,000 in July 2018 to over 1.2M in February 2019. Monthly Active Users (MAU) have increased from 900,000 to 1.9M in the same time frame. Revolut’s monthly transaction volume has also increased from $2.4B in July 2018 to over $4.6B per month."
    Quotes
    • "Feb. 2019 3.9 million $4 billion 1.8 million Oct. 2018 2.8 million $3 billion 1.2 million "
    Quotes
    • "Challenger banking service Revolut has reported its annual results for the year 2017, with some stark figures: the revenue has increased fivefold to £12.8 million ($16.8 million) from £2.4 million ($3.2 million) and the customer base has trebled to 1.3 million (from 450,000)."
    • "Monthly transactions volumes in 2017 grew from $200 million to $1.5 billion."
    Quotes
    • "$1.7 B Revolut Mkt valuation £12.8 M Revolut Revenue FY, 2017 Revolut Revenue growth (FY, 2016 - FY, 2017), %443% "
    Quotes
    • "PRIVATESTATUS 701-800EMPLOYEES LATER STAGE VCLATEST DEAL TYPE(Upcoming) $500MLATEST DEAL AMOUNT 21INVESTORS "
    Quotes
    • "Monzo is a London-based digital-only bank platform. London, England, United Kingdom"
    • "Founded Date Feb 2015 Founders Gary Dolman, Jason Bates, Jonas Huckestein, Paul Rippon, Tom Blomfield"
    • "Funding Status Late Stage Venture"
    • "IPO Status Private Company "
    • "Monzo has raised a total of £324.7M in funding over 14 rounds. Their latest funding was raised on Jun 25, 2019 from a Series F round."
    Quotes
    • " Market Valuation£2 B2019-06-25 • Total Funding$417.7 M "
    Quotes
    • "Join our 2,797,950 customers today"
    Quotes
    • "The best of Monzo, for your business. A full UK bank account you can open in minutes"
    • "Here are the things we're adding because businesses asked for them. • Help with taxes Coming 2019 We'll put money aside for payments. One day, we'll pay HMRC for you too. • International payments Coming 2019 Pay and get paid by suppliers and customers all from in the Monzo app. • Categorised spending Coming 2019 Sort your payments into categories that suit your business. • Batch payments Coming 2019 Make multiple payments at the same time. Perfect for payroll. • Organised expenses Coming 2019 Mark business expenses with a tap and move them between accounts. • Payments with a link Coming 2019 Use Monzo.me to pay and get paid by simply sharing a link. "
    Quotes
    • "We’re starting to work through our waitlist, and offer more business accounts slowly. Thank you so much to all 15,000 of you on our waitlist for bearing with us so far! "
    Quotes
    • "2019 We launched a small test of business accounts to 100 sole traders and limited companies. We’re testing business banking We know that the needs of small or medium sized businesses are very different, but traditionally banks have put them all in one category. We’ve started testing business banking with a small number of businesses and we want to offer features that actually help them to achieve their goals"
    • "1,600,000 customers 2/19"
    • "We’ve grown revenue considerably: we’ve just crossed £40m of annual run-rate revenue (based on May 2019 revenue), but there’s still plenty of work to do to get to profitability. Around 30% of active users deposit at least £1,000 per month (our definition of ‘salaried’), up from 13% a year ago."
    Quotes
    • "N26 is a mobile bank helps customers manage their bank accounts through smartphones. Berlin, Berlin, Germany "
    • "Founded Date Feb 2013 Founders Maximilian Tayenthal, Valentin Stalf Funding Status Late Stage VentureLast "
    • "N26 offers mobile banking solutions to customers in the European Union through its subsidiary. It provides international money transfer, investment, overdraft, and cash withdrawal and deposit at stores."
    • "N26 has raised a total of $682.8M in funding over 7 rounds. Their latest funding was raised on Jul 17, 2019 from a Series D round."
    Quotes
    • " Market Valuation$3.5 B2019-07-17 • Total Funding$682.8 M "
    • "Customers: Dec, 2018 2 million "
    Quotes
    • "N26 Business banking for freelancers and the self-employed N26 Business is the free bank account for freelancers and the self-employed. Earn 0.1% cashback on all purchases you make, and enjoy free card payments worldwide "
    • "• You reside in a country where N26 operates: Germany, Austria, France, Italy, Spain, Portugal, Ireland, Greece, the Netherlands, Belgium, Luxembourg, Finland, Latvia, Estonia, Lithuania, Slovakia, Slovenia"
    • "• N26 Business is free to open online with no account management fees. It’s the easiest business bank account to open if you’re a freelancer or you’re self-employed."
    Quotes
    • "Since the initial product launch in 2015, over 3.5 million customers across 24 European markets have signed up for N26."
    Quotes
    • "N26 generated revenues of € 11.24 million in 2017, with the largest part being commissioned (€ 10.02 million). This seems puny at first, but compared to 2016, if you just capitulate to the commission income, corresponds to an increase of about 2000 percent. With this you can get income per customer somewhere between 20 and 25 euros. In our view, that’s not all that bad, even if some well-established banks alone make clear about the account fees 120 Euro per year for normal customers."
    • "According to our calculations, N26 won about 400,000 new customers in the year before last (2016)"
    Quotes
    • "In November, we launched N26 in the UK, our first non-Euro account and a major step forward in our global expansion. We followed this up by rolling out N26 in Denmark, Norway, Poland, Sweden, Liechtenstein and Iceland. And with new markets came new customers."
    • "In June we had 1 million customers, by December we counted more than 2 million customers across 24 countries, with monthly transaction volume exceeding €1.5 billion. We continue to be one of the fastest growing mobile banks in Europe and we’re not stopping there, with our sights set on the US in 2019."
    Quotes
    • "Helsinki, Southern Finland, Finland Founded Date 2011 Founders Kristoffer Lawson, Mikko Teerenhovi, Teemu Hukkanen, Tuomas Toivonen IPO Status PrivateCompany "
    • "Holvi is banking for Makers and Doers - European entrepreneurs, sole traders and business owners. It’s a current account with its own IBAN number and it's designed to help you run your business in one place."
    • "Holvi is a Payment Institution, not an old-fashioned bank. We’re a modern money service for the new wave of Makers and Doers. They are building financial technology that has a purpose and makes a difference in your day-to-day life."
    • "Holvi has raised a total of €4.3M in funding over 6 rounds. Their latest funding was raised on Sep 1, 2015 from a Seed round."
    Quotes
    • "Holvi is a simple one-stop-shop for small businesses to collect income, manage expense and get an understandable real-time view of their company finances. New Holvi accounts can be opened in minutes online and Holvi customers don’t need a separate bank account. The company recently released Holvi Expenses iPhone app for managing expenses on the go. Holvi is regulated by the Finnish FSA. Holvi is has been featured in the Economist and Financial Times, voted as the hottest startup in Helsinki by Wired Magazine and chosen to be one of most innovative and disruptive brands in financial technology by FinTechCity London."
    Quotes
    • "https://www.holvi.com/product/"
    Quotes
    • "• 100% digital business current account • Easy to set up! No need to visit our office – easily verified with your e-Resident Card from anywhere in the world. • A diverse set of business management tools that save you time and make your life easier "
    Quotes
    • "Founded in 2011 and based in Helsinki, Finland, Holvi is the world’s premier digital banking service for freelancers and entrepreneurs. Combining powerful money management tools with an easy-to-use business current account, Holvi offers an innovative banking experience that actually helps you run your business."
    • "Holvi is the world’s first financial service operating with its own Payment Institution License. We’re authorised for operations across Europe by the Financial Supervisory Authority of Finland (FIN-FSA)."
    Quotes
    • "Over 150,000 micro businesses across Europe. 60% year on year growth 201-2018 40% of customer growth in 2018 came from Germany. "
    Quotes
    • "Micro-enterprises, though small in size, have come to be known as the growth engine of Europe, forming a significant share of our entrepreneurial landscape. According to OECD statistics (2016), between 82% to 95% of the European business population are micro-enterprises, with self-employed individuals (a segment of micro-enterprises) numbering a whopping 30.6 million in the European Union in 2016."
    Quotes
    • "BBVA-backed start-up Holvi will expand its offering to micro businesses in Ireland, Italy, Belgium, France and the Netherlands after reaching a 150,000-customer milestone, reports Jane Connolly. Holvi has been providing business banking in Germany, Austria and Finland for over three years and has seen year-on-year growth of 60% from 2017 to 2018."
    Quotes
    • "There were 58 banks operating in Ireland at the end of 2017. These included 24 credit institutions authorised in Ireland (of which five were covered bond banks) and 34 branches of foreign banks operating in Ireland. While the number of banks has been relatively stable in recent years, the number of credit unions – not-for-profit, member-owned financial cooperatives funded primarily by member deposits – fell from 292 to 269 during 2017 as credit unions consolidated."
    • "By the last quarter of 2017, contactless accounted for 28% of the volume and almost 7% of the value of card payments"
    • "New lending to non-financial small and medium-sized enterprises (SMEs) rose by almost 10% year-on-year. Gross new drawdowns to core SMEs (excluding financial intermediation and property-related sectors) rose by 14% year-on-year to €3.7 billion during 2017. A further €1.35 billion in gross new lending was drawn down by SMEs in property-related sectors. The government-owned Strategic Banking Corporation of Ireland provides wholesale funding to banks and non-bank financial institutions for on-lending to SMEs. During 2017, it supported some €0.9 billion in lending. "
    Quotes
    • "Chief executive Anne Boden said the bank, which currently has some 460,000 personal current accounts and 30,000 SME accounts in the UK, will “definitely” set up a subsidiary in Ireland later this year to service the Irish market, with a staff of between 10 and 30 people. "
    • "Starling Bank, the UK mobile-only challenger bank, has submitted an application for a full banking license with the Central Bank of Ireland as it readies a launch here later this year. "