Investment fintech BUX raises $80m in latest round
BUX, Europe’s fastest growing mobile brokerage company, based in Amsterdam and London, has raised $80m in a funding round led by Tencent and Prosus Ventures.
Additional new investors included ABN Amro Ventures, Citius, Optiver, and Endeit Capital. Existing investors HV Capital and Velocity Capital Fintech Ventures.
The zero commission brokerage, which turned to Royal Park Partners to act as an exclusive financial advisor on the drive, recently welcomed its 500,000th customer, and will use the new capital to expand operations and enhance services on its popular investment app, BUX Zero
According to reports, BUX Zero has more than doubled its assets since January, and its active customer base increased six-fold over the past 12 months. With interest rates at all-time lows and struggling pension systems, there is an increased demand for investing especially amongst the younger generations.
Since March 2020, the fintech has launched in France, Austria, Germany and Belgium and planes to continue its international expansion throughout 2021.
Tencent executives said the technology giant had backed BUX because they are the leading neo-broker in Europe and have been able to build a platform that is sustainable and scalable.
“BUX is the only neo-broker in Europe that offers zero commission investing without being dependent on kickbacks or payments for order flow. This ensures that its interests are fully aligned with its customers,” said Alex Leung, Assistant GM at Tencent, Strategic Development.
Younger generation investors
Appealing to the next generation of long term investors has been central to BUX’s strategy and success, say its leaders, and one they will continue to pursue.
Speaking about the latest funding drive, Yorick Naeff, BUX’s new CEO, explained, “Younger generat ions in Europe now realise that investing is one of the few viable ways left to create a stable financial future.”
He went on to say that the new funding round would enable BUX to continue to “spearhead innovation” by implementing advanced features to further shape the future of how Europeans invest.
“We are extremely grateful to have top tier investors like Prosus Ventures and Tencent onboard to support us in our mission,” Naeff said.
Meanwhile, Sandeep Bakshi, Head of Europe Investments for Prosus Ventures, said, “Traditional financial market investing comes with a lot of friction and we firmly believe in the democratisation of access to financial services for the next generation of investors.”
Bakshi pointed out that the existing solutions are expensive, complex and not designed for younger generations.
He added, “BUX has built the next generation of investing services that are low cost, convenient and intuitive for even the newest investor, while covering the full spectrum of investment options, including cryptocurrencies. They have already experienced impressive growth and are the best-positioned neo-broker to scale across Europe and beyond.”
Stripe backs Step - the digital bank for teens
The Series C round raised US$100m in capital from a number of backers, including Coatue, TikTok star Charli D’Amelio, actor Jared Leto, and Will Smith’s Dreamers VC, for the enterprise.
Step provides a free FDIC-insured bank account and Visa card to teenagers. The accounts are backed by Evolve Bank and there is no subscription charge for its usage. Users don’t pay for their accounts and there are also no overdraft fees.
The mobile banking app enables parents to set controls and limits on spending and encourage responsible finances. According to data released by the company, 88% of the platform’s users say this is their first bank account.
To date, Step has seen great success in the marketplace. The company has raised more than $175m from investors and now has 1.5m users.
Stripe, which was founded by Irish brothers Patrick and John Collison, previously led Step’s $22.5m Series A round in 2019.
Step's Series B funding round also brought in $50m, and has a distinctly celeb-tinged reputation with investors including Justin Timberlake and the pop duo The Chainsmokers.
Users get access to a free, FDIC-backed bank account, a spending card and P2P payments platform to send and receive money instantly.
CJ MacDonald, chief executive of Step, said the company is aiming to improve the financial futures of the next generation. “Step is the only banking platform that enables teens to start building a positive credit history before they turn 18 and does not charge fees of any kind.
He has previously spoken about the importance of financial literacy for young people. “Money is just one of those things where I think the more educated and equipped you are early, the better decisions you can make down the road,” he told . “And you can also prevent yourself from making costly mistakes. I mean, the average American doesn't have $400 in emergency savings and pays $350 a year in banking fees. If we can help this next generation just ultimately be smarter and more educated as it pertains to money, I think we'll all be better off.”
Kyle Doherty, managing director at General Catalyst and Step board member, explained, “Gen Z is flocking to modern financial solutions that can be easily embedded within their digital lives and Step has a unique model for how to do this right.”
The news follows on from Stripe’s recent announcement that it plans to acquire TaxJar. The fintech, which builds software for online businesses that automates the reporting and filing of sales taxes, will most likely be integrated with Stripe’s billing services.
Currently, No terms have been disclosed but the Boston start-up had raised more than $60m from investors including Insight Partners.
Stripe chief financial officer Dhivya Suryadevara said of the move, “With TaxJar, we will help millions of internet businesses running on Stripe with their sales tax and make it easier for them to sell internationally.”