One of the big players out of the Nordics is announcing growth funding along with two new services to continue filling out its position as a force to be reckoned with in the world of financial services for consumers. A person close to the company says that it has raised 70 million dollars and is going to be a $2 billion company.
There are a lot of offerings for its users. It has a full banking license, which makes it different from other banks, and it offers checking and deposit accounts, loans, and other credit services.
This latest investment is an extension of the company's Series D, which had a first close of over 200 million dollars in July of last year. The round, which was led by Heartland, has closed out with a value of over $300 million. It has previous backers in it, but maybe more notably, it also has a superstar in it: Will Ferrell, who is also starring in a marketing campaign for the startup.
I asked Ken Villum Klausen, the founder and CEO, why Will Ferrell. He said that the comedian is massive in the Nordics, not just because of his star turn in the movie, but also because of his life ethos, which seems to marry up well with Nordic popular culture. It's random enough of an endorsement that it becomes funny in itself, the kind of vehicle you associate with Ferrell in his less marketing-focused endeavors.
Lunar is still in the middle of a funding process. It is raising its Series E, which is expected to close in May of this year, at an even higher valuation.
It has raised over 300 million dollars in total, with previous investors including Seed Capital and Greyhound Capital. Augustinus Fabrikker.
One reason for the rapid pace of funding is that it wants to strike while the iron is hot. It had 325,000 customers when it raised the first part of the Series D. It has grown to 500,000 across its footprint, which includes its home base in Copenhagen, Sweden and Norway. The plan is to double down on more services for the Nordics, which will include a launch into Finland, before spreading into more markets in Europe and further afield.
Villum Klausen points out that when Lunar launched in the Nordics, it was already an uphill battle to position it as a challenger. It's not easy to be a neo-bank in the region because you need to deeply integrate with the existing infrastructure and a specific approach that is based around ID numbers, he said. This has made it difficult for would-be competitors to enter the market.
He told me that if we could succeed as a challenger bank in the Nordics, we could succeed anywhere.
The startup is still focused on building out services that ferret out what the incumbents are still not providing, to build those services into the lunar platform, not
He told me that Lunar has over one billion dollars in deposits on its books, and that it is using that to run its loan product rather than taking out debt. He said that its loan products are the highest revenue generators.
Villum Klausen told me that there is a funny place in the Nordics for scurvy trading. It's popular, with 10 of the top 20 or so most popular apps in regional rankings being apps that enablecryptocurrencies. The process of buying and trading currency on those apps is somewhat limited, as people can't use local currency if they want to cash out.
The transactions will be rejected because Nordic banks don't want to transact with international platforms. There is no regulation for tracking those transactions to determine where the money is coming from or where it is going, and no way to protect the banks against fraud or other illegal activity in those transactions.
It was an opportunity for Lunar to take on the risk by bringing people to the platform to trade, and then getting them to cash out with the platform, making money off the exchange or service fees associated with the transactions. It will more than compensate for any risk it takes on by providing that service, without regulation or other rules, in the first place.
Users will be able to trade and cash out cryptocurrencies.
Villum Klausen believes that the complexity of offering services in what is essentially a total addressable market of just 27 million people is too small for most players to bother with, even if it is a great place to structure. The early approach that Klarna took is notable.
He said that they don't know why no one else entered the Nordics before.
It's a bet that investors believe is a sound one for now.
Lise Kaae, the CEO of Heartland, said in a statement that the investment builds on their strategy of backing best-in-class businesses and management teams.
All Rights Reserved © 2024
