London-based fintech startup Cleo has raised $10 million in a Series A funding round as it looks to expand outside the UK.
Balderton Capital led the round, joining existing investors, which include: Skype founder Niklas Zennstrom; TransferWise co-founder Taavet Hinrikus; and Simon Franks, co-founder of LoveFilm, which sold to Amazon in 2011.
Cleo is a Facebook Messenger-based chatbot to which users can connect their bank accounts and use to manage their finances. The company claims to have 600,000 users, of which 94% are under 35 years of age, clearly displaying that millennials want new, mobile-based ways of managing their money.
Cleo now plans to further expand internationally, after it launched in North America in April 2018. International expansion can be tricky for fintech startups, due to regulatory processes taking time to complete and the work of building integrations for hundreds, if not thousands, of foreign banks for each individual country or region.
The company also plans to introduce its own range of financial products, which it hopes to charge for as it starts to look toward a long-term revenue-generating future. The current Cleo product is a free offering, but if it wants to challenge the other fintech companies in the UK and Europe, including Monzo, Revolut, Starling and Atom, it will have to aggressively offer its own options which compare well to its rivals. (See Revolut Signs Up 1 Million UK Customers & Eyes Global Expansion.)
Cleo CEO Barney Hussey-Yeo said: "From overdraft fees to credit cards, the traditional range of financial products doesn't work for this generation. The model of retail banking is not set up for the people it serves. Cleo's changing that. Cleo is designed to solve a global problem. There's an arms race going on to become the financial interface for this generation. A Google-size company will emerge in the next five years that achieves that."
Rob Moffat, partner at Balderton Capital, commented on why the venture capital firm chose to back the growing startup: "In the future, people may not use a traditional bank account as their primary financial interface. Cleo has managed to strike the perfect balance between education and entertainment, bringing a unique personality that keeps users coming back. We believe that Cleo has the team and product to become the leading global player in the coming years."