Boosted by a $220 million Series D fundraise led by Andreessen Horowitz, challenger bank Current plans to use some of its new investment to launch cryptocurrency products for its nearly 3 million customers, many of whom have expressed an interest in the space, CEO Stuart Sopp said.
Sopp, a former Morgan Stanley trader, said he wants the neobank to become a place where users can participate and become educated in the cryptocurrency marketplace.
“There is a need and a demand for a company like Current to explain and shepherd people into this new world. There’s a bunch of things and a bunch of value happening in cryptocurrencies that is not easily explained,” he said.
An early version of the platform in 2015 originally had Bitcoin wallet addresses and Ripple gateways, according to TechCrunch.
But the technology that Sopp and Current Chief Technology Officer Trevor Marshall needed to build the products just wasn’t available at the time, so they pivoted to digital banking.
“We wanted to build it on new technology, which just wasn’t possible at the time,” Sopp said. “It is starting to be more possible now.”
Sopp said he hopes to tap Andreessen Horowitz’s expertise in the space as he explores the ways in which he can implement cryptocurrency products on Current’s platform. The investment firm has more than 30 portfolio companies that are linked to the space, including crypto exchange platforms Coinbase and Anchorage, as well as the Facebook-backed Diem project. Andreessen Horowitz General Partner David George will join Current’s board.
Around 40% of Current’s users have been asking for services such as crypto trading, Sopp said.
“That’s a significant percentage of our customer base who are asking for something we hadn’t yet delivered,” he said.
Delivering on cryptocurrency fits with Current’s overall goal to offer its users services that aren’t readily available at incumbent institutions, Sopp said.
“We want to make sure that we deliver that value to people who have traditionally been overlooked by the existing financial system, making sure that they are in priority place,” he said.
Sopp said he plans to use some of the new funding to hire experts in the cryptocurrency space.
By the numbers
Current’s latest funding round puts the company at a valuation of $2.2 billion, tripling the figure from five months ago, the company said. Its user numbers have also grown, from 1 million last summer to 3 million now.
Sopp believes the coronavirus pandemic had a large impact on the neobank’s growth over the last year.
“Going into March last year, we saw an unprecedented framework shift of analog to digital. We’ve seen it across all industries, and obviously, banking has not hidden from that. No one’s gone to branches and no one intends to go back to branches in many respects because we’ve rewritten behavior,” he said.
The multiple coronavirus relief packages also provided the platform with opportunities to stand out from traditional banks, Sopp said.
Current, along with other digital banks Green Dot, Chime and Varo, fronted the government stimulus checks using their own balance sheets, instead of waiting for the checks to settle days later.
“Banks could do that. But they didn’t. They waited four or five days,” Sopp said.
As Current’s numbers grow, Sopp said the platform is continuing to attract users who are opening bank accounts for the first time.
“Our primary goal at Current, our main company [key performance indicator], is to have a primary financial relationship with our customers,” Sopp said, adding more than half of Current’s customers say they’ve never had a bank account before.”It’s an extremely high percentage — one of which we’re very proud.”