Pollen Street Capital has invested around €193m (£166.2m) for a 10 per cent stake in Netherlands bank Bunq.
Bunq owner Ali Niknam said the challenger bank would use the funds from the deal, which values the challenger bank at €1.6bn, to acquire the privately-held Irish lending company Capitalflow Group for roughly $141m as part of its growth strategy.
Bunq’s acquisition of Capitalflow is pending regulatory approval.
Bunq, which was founded in 2012 and which offers online banking services in 30 markets, recently achieved its first ever profitable month and passed €1bn in user deposits earlier this year.
“Combining the small- and medium-sized enterprise lending expertise of Capitalflow, the digital execution capability of Bunq and the ‘customer above all’ approach of both Capitalflow and Bunq creates a really exciting, high growth and self-sustaining platform with a pan-European reach that will mark a new standard in European digital banking,” said James Scott, partner at Pollen Street Capital.
“Bunq was founded to challenge what banking is and can do,” said Ali Niknam, founder and chief executive of Bunq.
“By putting our users first we have created a bank that is super focused on making life easy in a sustainable way.
“We’re extremely excited to join forces with Pollen Street Capital to further expand the bank of the free throughout Europe.”