UK challenger Kroo looks to raise £70m Series C as it takes on banking transparency
London-headquartered Kroo is preparing to raise up to £70 million in a Series C funding round as it seeks to enhance and develop the transparency of its product offering and loan book, and grow its customer base.
Kroo seeks £70m Series C
Building upon the £75 million it has raised to date, the digital lender has confirmed that is it targeting family offices, institutional investors, venture capitalists and private equity in the UK, US and Europe in a bid to raise between £55 million and £70 million and achieve profitability.
Kroo was founded in 2016, and landed its full UK banking licence in June 2022, which enabled it to launch current accounts last December, accompanied by its personal loan and overdraft services.
The challenger also emphasises its take on transparency in banking. According to its latest research, only 22% of participants would describe their bank as transparent, with seven in ten doubting whether their bank has their best interest at heart.
These findings touch upon major current trends in UK banking. The Financial Conduct Authority (FCA) leveraged its recently introduced Consumer Duty to clamp down on banks offering interest rates to savers that are disproportionate to the Bank of England’s recent interest rate raises.
In response to these trends, Kroo has confirmed that it is to offer its customers a ‘tracker’ rate set at 0.9% below the Bank of England’s base rate, affording customers greater transparency on the rates they’re being offered.
Expected to go live from 15 October, Kroo says its latest product update supports its commitment to passing on interest to customers in line with changing rates and challenges the traditional profit extraction model.
For De Gottardo, this model has been “unchallenged for too long”, where banks’ profits don’t translate to customer earnings.
“We have ambitions to show it’s possible to create a successful bank that rewards loyalty and shares its success with customers,” he continues.
“Whether rates go up or down, we’re committed to only earning 0.9% on the base rate. Our tracker rate is the first in the market and the latest in a range of products we’ve created to show customers we’ve got their backs.”
