Chip, an AI-powered automatic savings account mobile app, completed its equity crowdfunding round on Crowdcube with nearly £1.1 Million secured from more than 3200 investors. The campaign was launched last month, originally seeking £600,000.
As previously reported, Chip is described as a savings app that is designed to help users save money and feel good about it. It’s an automatic savings app which does all the hard work to make saving money as easy as spending it. Since launch earlier this year, the app has already processed £6.7 million, analyzed more than 10 million transactions and had 25,000 customers open accounts. It is aiming to become a challenger bank for savings:
“We’ve built an intelligent savings account that helps you save more of your money and spend less of it on overdraft and credit card fees. Chip’s proprietary AI connects to your current account and analyses transactions. Then every few days, calculates what you can afford to save based on recent spending. Saves are automatically transferred to Chip where they are put towards goals, withdrawn, or used to reduce borrowing. In just 10 months we’ve processed £6.7m of savings, had 25,000 people open accounts with Chip, analysed approximately 10 million transactions, have £2.4m on deposit and approximately £40m of consumer credit to optimise.”
Chip is currently making plans to apply for a banking license in 2018. According to TechCrunch, the Crowdcube funding round was part of a larger £2.4 million funding round. The banking license will notably permit the app to be lending out portions of customer deposits in order to power a future alternative to banking over drafting that offers a potentially lower and more flexible interest rate. Founder and CEO of Chip, Simon Rabin, shared with the media outlet:
“In order to offer the customer a 10x better product experience, you can’t just resell them the existing market. All that makes you is a slightly better money supermarket! We learnt this summer that customers love the smart credit functionality but we can’t make it viable within the existing wholesale funding market.”
Rabin then added that he believes that Chip’s banking license plans will form part of a wider trend with the second wave of challenger banks in the UK that is not seeking to own customer relationships through current accounts and build out their own niche value proposition.
Update: The funding on the campaign’s site has been reduced and the round finished with a grand total of £968,540 from 2873 investors.
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