Moven, the mobile-first “neobank” founded by Brett King in 2011, is getting a multi-million dollar infusion from the Japanese company SBI Group. At the same time, Moven says it is pursuing the acquisition of a bank.
SBI Group will hold one of the six seats on Moven’s board, and the two companies will set up a joint venture in Japan.
At the same time, Moven is making major changes to its overall business, including splitting the company in two.
On one side will be the software provider that already develops digital banking software for TD Bank in Canada and Westpac in New Zealand. This half of the company, Moven Enterprise, will participate in the joint venture with SBI in Japan.
On the other side will be the neobank, which will be called MovenBank. Moven says it is in the process of acquiring a U.S. bank and becoming a full-fledged “challenger bank” in this country. Moven was not ready to say which bank it will acquire.
It is an unusual move. The only other fintech entrepreneur known to have done this is Suresh Ramamurthi, who bought CBW Bank in Weir, Kan., and maintains his tech company, Yantra Financial Technologies, separately. CBW is Moven’s U.S. bank partner.
“We think we can scale much faster with our own charter and can more aggressively pursue credit services for our customers, distribution partnerships and so forth,” King said.
Buying a bank, of course, comes with intense regulatory requirements.
“We’ve spoken with regulators about our intentions; this process will take a little longer,” King said.
Moven started out with a direct-to-consumer model. Its app provides basic mobile banking services with features like Safe to Spend, a calculator that shows users how much money they can safely squander and still pay his bills at the end of the month.
As the app attracted attention, the company began getting requests from banks like TD and Westpac and created a hybrid business model to work with them.
“We’ll now split those businesses into two entities proper,” King said.
The joint venture with SBI will have the Moven name, and its main office will be in Japan.
Of the funds SBI Group is giving Moven, much of it is earmarked for the joint venture, which will customize and sell Moven’s software to Asian banks.
The expectation is that this will bring a lot more opportunity for partners for Moven in Asia.
“SBI’s partnerships with more than 60 banks across Asia give us the opportunity to grow Moven Enterprise much faster,” King said. “This does allow us to give a lot more support in the time zone to our Asian customers, and the ability to do rapid deployment and localization. Some cash will go into re-engineering the core product, allowing it to be more plug-and-play, and hook into the typical core systems in Asia.”
The company expects to double its revenue expectations in Asia in the next 24 months, due to the investment and the local support.
Updated January 31, 2018 at 4:07PM: An earlier version of this story included a number for the deal that was not confirmed.