Xinja has raised in excess of AU$2 million in first-round funding to launch a pre-paid debit card as a precursor to establishing Australia’s first fully digital, independent “neobank” built for mobile.
Neobanks, or challenger banks, are already established in the United States and the United Kingdom where Monzo, Starling, Tandem and Atom Bank have raised over US$485 million (AU$655 million) in capital and built solid customer bases.
“It’s time Australians had access to a new type of bank that serves their interests,” said Eric Wilson, Xinja’s chief executive and a former National Australia Bank executive. “We are designing a bank in partnership with our customers; it will be built around their needs and with their input,” Mr Wilson said.
Jason Bates, a co-founder of Monzo, a leading UK digital challenger bank, has joined the Xinja board. Monzo was launched in 2015, raised AU$3.48 million in its first round and rapidly generated a wait-list of over 20,000 people for its first “alpha” product. Monzo now has more than 175,000 customers, has raised more than AU$60 million – AU$6 million of which was raised through crowdfunding – and is now authorised and regulated as a bank in the UK.
“Xinja carries none of the legacy costs or system limitations of traditional banking: there will be no bricks and mortar branches, no paperwork and no cumbersome legacy technology. So it can deliver innovative, mobile-first experiences at highly competitive rates, and low or no fees for customers,” Mr Wilson said.
Xinja raised over AU$2 million from Australian and international investors as seed capital for the launch of a pre-paid debit card designed to improve how people engage with their money. Xinja expects to expand its offering to deposit accounts and mortgages within 18 months, subject to regulatory approval.
Like its European and US peers, Xinja will provide a highly intuitive and interactive banking experience for customers who want to be able to do everything on their mobiles, with as little effort as possible. For example, the Xinja app will allow customers to:
- start using a new account within seconds
- see their payments in real time with instant balance updates
- understand their current position compared to their financial goals
- follow their money using simple visual tools
- start saving with a single swipe
The app will prompt them into action to optimise their finances.
“Neobanks begin life with few limits around how the business and products develop and how they meet their customers’ needs,” said Mr Bates, from Monzo.
“That alone gives Xinja a head start when it comes to disruption within the Australian banking sector. But it also means Xinja can offer something that truly reflects the needs of its customers,” he said.
“Neobanks start with the customer in mind. They deliver intelligent services that improve people’s lives, rather than trying to sell traditional products,” said Mr Bates, who led proposition and product development at Monzo.
“Big banks don’t get that. They are organised, built, incentivised, and operated around a product and distribution model, not getting back to what banking is all about… delivering real value to customers through financial services.
“That not only gives Xinja a headstart when it comes to disrupting the Australian banking sector, it also means Xinja will drive to offer something that truly reflects the needs of its customers,” he said.
Mr Wilson said Australians are early adopters of technology, especially mobile technology.
“Xinja is a smart, simple, and very appealing proposition for Australians,” he said. “It will provide an intuitive experience and allow rapid and better money decisions without the angst.”
“Xinja has the potential to inject much needed competition into the sector,” Mr Wilson said.
“If you’re trying to hit financial goals or simply manage your money better, your bank should be making it simpler and easier for you to achieve this, and that is what Xinja will do.”
Xinja’s capital raising was completed just after the release on May 9 of the Federal Budget, which included measures that are expected to bring greater competition into the banking sector by making it easier for startups to enter the market.
Xinja has had initial discussions with the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission on licensing. It expects to pursue an application for a restricted banking licence shortly.
People can sign up now to become founding customers, help shape the future of Xinja and receive access to priority waitlists for products and future crowdfunding opportunities. Pre-register at www.xinja.com.au
For further information, please contact:
P&L Corporate Communications
61-2 9231 5411 / 61-414 999 693