UK digital bank Kroo is seeking to raise £70 million in a funding round aimed at achieving profitability within two years of its launch in December 2022.
Since its inception, Kroo has amassed nearly £750 million in deposits and serves approximately 130,000 current account holders, with an ambitious goal of reaching one million customers by 2025.
The bank has already secured £75 million in funding for its development and is now entering its Series C funding round, targeting £55 million to £70 million to enhance its product offerings, expand its customer base, and build its loan portfolio. Kroo is looking to attract investments from family offices, institutional investors, venture capitalists, and private equity firms in the UK, US, and Europe.
Kroo offers a digital current account with a competitive interest rate of two percent, along with overdraft services and no fees for debit card spending abroad. A significant product update, set to launch on 15 October, will provide customers with greater transparency regarding interest rates through a ‘tracker’ rate that is 0.9% below the Bank of England’s base rate. This approach challenges the conventional profit model that often relies on teaser rates to attract customers without long-term support.
Andrea De Gottardo, CEO of Kroo, stated, “Despite rising interest rates, customers have grown accustomed to minimal earnings on their cash, while banks record substantial profits. Kroo is redefining this outdated model by prioritizing our customers’ financial well-being.”
He added, “We aim to demonstrate that it is feasible to create a thriving bank that rewards loyalty and shares its success with customers. Regardless of rate fluctuations, we are dedicated to earning only 0.9% above the base rate. Our tracker rate is a market first and is part of a broader range of products designed to support our customers.”