The Amsterdam online bank Bunq has made a profit for the first time since its foundation. In the last quarter of last year, the company of founder Ali Niknam recorded a positive result of 2.3 million euros. Niknam tells that in conversation with NRC.
Niknam founded Bunq over ten years ago – just after the financial crisis – with the aim of revolutionizing banking. A bank without branches, which approached banking purely digitally, was unprecedented at the time. Bunq (around four hundred employees) is currently the second largest fully digital bank in Europe. The company does not share sales figures and numbers of users.
Bunq has been part of the Dutch list since July 2021 unicorns: fast-growing tech companies with a value of more than 1 billion dollars. At the time, the British Pollen Street Capital invested 193 million euros in the bank in exchange for more than 10 percent of the shares. The rest of the shares are owned by Niknam, who has been covering Bunq’s losses with its own money for years.
:format(webp)/s3/static.nrc.nl/images/gn4/stripped/data92091655-6a39c8.jpg)
Read more about Bunq’s fight with DNB about money laundering screening: ‘Bunq wins case against DNB’
A new phase
Over the past ten years, Bunq kept the characteristics of a start-up, which grew but also suffered losses. Niknam says it can now make a profit because of rising subscription revenues and positive interest rates. Bunqs users currently have deposited 1.8 billion euros in credits with the bank. Bunq is still losing money over the entire past year.
With the quarterly profit, the company “enters a new phase,” Niknam said in a video call from his New York apartment overlooking the Manhattan skyline. Niknam currently spends “70 percent” of his time in New York, where he says he is fascinated by how Americans deal with entrepreneurship. “It’s so energetic here and so much is happening here.”
Customer screening
Niknam believes his company is ready for international expansion. Whether that will be in the United States, he does not want to say. “If those plans are already there, I will not tell a journalist. Although it seems very nice to experience what it is like to do business in a really different culture.” Bunq is now active throughout the European Union and Niknam previously founded two other European companies: TransIP and The Datacenter Group.
Which also helps the company: in October last year, Bunq won a protracted case against regulator De Nederlandsche Bank (DNB) about the use of technology to screen customers for money laundering. DNB stated that Bunq fell short in customer screening with its data analysis and use of artificial intelligence, but that judgment did not hold up in court.
With the victory, a weight has been lifted from Niknam’s shoulders, he says. “This was a very big case, which was a very stupid thing to do commercially. We’ve been working on it for four or five years,” he says. “We have to make products, we have to compete. We have to do this, we have to do that. And then also such a big case against an institution, which never has to worry that it can’t pay the bills or make a product that is no better than that of the neighbor. This win was vital for us.”
A version of this article also appeared in the newspaper of February 21, 2023