Current, a challenger bank that aims to serve Americans “overlooked” by traditional banks, announced it has raised $131 million in Series C funding at a $750 million valuation.
[Current CEO and Founder Stuart So] … realized that traditional banks were not meeting the needs of the majority of Americans… So Sopp founded Current with the mission of helping “close the financial inequality gap.”
“We thought if you could reduce the servicing costs and operational costs through technology, and via a mobile distribution instead of branches, we could bank the majority…”
The company built its core technology, called Current Core, which serves as a middleway layer that connects to legacy infrastructure… Current Core is about 100 times cheaper in technology costs to maintain, according to Sopp.
“The technology cost for a regional or community bank is about $10 to $15 a month per open account,” he told FinLedger. “Our cost is 12 to 16 cents. That’s the pressure that banks face.”
Current makes money off of interchange fees and it also offers a subscription model for those members who want access to credit. Its method of marketing “is fundamentally different,” Sopp said.
It talks to influencers with a significant presence on YouTube, Tiktok and Snapchat that seem aligned with Current’s mission and values. Where there’s a fit, the influencers promote Current’s product and the bank aligns itself with them.
Looking ahead, the bank will focus more on cash management and building out features such as joint accounts and bill pay.