Lunar is a Scandinavian digital bank, described as an industry leader in the Nordic region. Unlike many other neobanks, it is a fully-regulated and licensed bank in Sweden, Denmark and Norway with a client base of 500,000 and deposits exceeding Euro 1.3 billion. Among its offerings are checking and deposit accounts, loans and other credit services like buy now, pay later, and stocks, fund and ETF investing. It also has business accounts, loans and financial management for small and medium businesses. Significantly, its account holders get a physical and digital debit card, an investment platform, and a portal to apply for loans. The other features that makes the disruptor organization different are fund transfer abroad with no transaction fees, ATM facility with no withdrawal fees, and comparatively high 1.05% interest on savings.
Lunar claims that it is designed with the customer in mind. It is 100% digital, always accessible and provides everything a customer needs to make the most of his money.
The neobank has a powerful app on offer with budgeting, savings pots and pay later features. Customers can do instant domestic bank transfers with no fees and one does not have to change banks to use the app. Customers can control their finances with the app. It operates only in Swedish Krona and charges 20% interest rates on overdrafts. It is in fact, a smarter digital bank to which customers can move their accounts from a traditional bank for efficiency, better interest rates and waiver of fees on several things.
Lunar recently raised $77 million and announced that it is launching a crypto trading platform and B2B payments for its small and medium business customers. The neobank has already got a Series D investment of Euro 210 million in July 2021. The round is now closed out at Euro 280 million.
The Nordic region is known for high level of digital adoption in the banking industry. That makes the task of Lunar a bit tougher, for it has to show the difference to a discerning customer base. The crypto trading platform is a move in this direction. Of course, the bank has plans to move beyond its Nordic borders and at the same time build newer services that makes it different from traditional or even digital banks.
Crypto Trading a Gainer
In this context, crypto trading could be an interesting factor for the Nordic customers. At present, Nordic banks do not transact with international crypto platforms as there is no regulation for tracking those transactions to ascertain where the money is coming from or where it will be going, and no way to insure the banks against fraud or other illegal activity in those transactions. Lunar sees an opportunity here. It believes it can bring people to the platform to trade, and get them to cash out with Lunar itself, making money off the exchange or service fees associated with the transactions. The bank has said initially users can trade and cash out Bitcoin, Ethereum, Cardano, Polkadot and Doge.
Lunar has some 450 employees in the Nordics, who work from the bank’s headquarters in Aarhus and offices in Copenhagen, Stockholm and Oslo. And these employees have designed a bank where the customer virtually owns the money and it is up to him to do what he wants. This is facilitated by the unique app the bank has designed and developed, which ensures that the customers are in charge. The bank only provides what the customers need to manage their money in a smarter, easier and faster manner.
Lunar loudly announces that it does not use its or customers’ money on speculative trading. It does not invest in fossil fuel companies, weaponry or in countries and companies that violate human rights. It also does not support any political parties.
Lunar was founded in 2015 by a group of tech entrepreneurs who wanted to rethink banking, payments and investments. The management team comprises 4 senior executives, headed its founder Ken Villum Klausen, who is the Chief Executive Officer. The investors behind Lunar include HEARTLAND, Kinnevik, Tencent, Seed Capital, Augustinus Fabrikker, Greyhound Capital and Socii Capital.
In March 2022, Lunar has acquired Finland’s Instabank, thus getting the latter’s 60,000 customers and its technology, which Lunar has incorporated into its app. This has given neobank a key strategic foothold in Finland. On the technology front the neobank has acquired full-stack payments platform Paylike. The acquisition is expected to facilitate e-commerce payments for the bank’s customers without having to use an intermediary. It has also introduced a one-step checkout solution alongside the acquisition to make online payments simpler and faster. Paylike operates across Europe and accounts for a transaction volume of €100 million a year.
This article has been compiled based on publicly available information on the web, particularly the bank’s own website.