Denmark’s neo-bank Lunar raises €70 million to launch crypto trading app

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Challenger banks have become, collectively, a force to be reckoned with in the world of financial services for consumers, and today one of the big players out of the Nordics Lunar is announcing growth funding along with two new services to continue filling out its ambition of providing a one-stop super app for its users. The startup has raised €70 million; and along with that news, it’s launching a crypto trading platform and B2B payments for its small and medium business customers.

The new services join a swelling list of offerings for its users. Lunar has a full banking license (setting it apart from a number of other neo-banks, which operate on other banks’ rails), and it offers checking and deposit accounts; loans and other credit services like buy now, pay later; stock, fund and ETF investing for consumers; plus business accounts, loans and financial management for SMBs.

Some more detail on this latest investment: it is actually an extension to the company’s Series D, which had a first close of €210 million in July of last year. The round — in total led by Heartland with Kinnevik, Tencent and IDC Ventures also participating — is now closed out €280 million. This latest tranche has previous backers in it (Lunar doesn’t spell out names), but maybe more notably (sorry VCs), it also has a superstar in it: Will Ferrell, who is also starring in a marketing campaign for the startup, also asked to get, and subsequently was, cut in on the deal.

One reason for Lunar’s quick pace of funding is the fact that it’s growing fast and it wants to strike while the iron is hot. When it raised the first tranche of the Series D, it had 325,000 customers. That number has now grown to 500,000 across a footprint that includes Denmark (its home base is in Copenhagen), Sweden and Norway. The plan is to double down on more services serving the Nordics, which will include a launch into Finland, before spreading into more markets in Europe and further afield.

The crypto trading product underscores how the company is going about its expansion strategy more widely: Villum Klausen points out that when Lunar launched in the Nordics, it was already an uphill battle to position it as a “challenger” bank because basic banking in the Nordics was already so ahead of the game globally, with some 95% of consumers already using digital banking services provided by incumbents when it launched. Conversely, it’s also not that easy to just wade in and be a neo-bank in the region, because to offer any services you need to deeply integrate with the existing infrastructure and a specific approach that is based around ID numbers, he said. This has proven to be a high barrier to entry for would-be competitors to move into the market.

The investment builds on our strategy of backing best-in-class businesses and management teams,” said Lise Kaae, the CEO of Heartland, in a statement when the first tranche was announced. “We look forward to supporting the team in developing next generation digital-first financial services in the Nordics and beyond.”

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