Cleo, a UK-based financial assistant for Gen-Z, has raised $44 million in Series B funding “to continue fighting for the world’s financial health”, it says.
Luxembourg-based EQT Ventures, which describes itself as “a multi-stage VC fund that partners with the most ambitious and boldest founders in Europe and the US”, led Cleo’s Series B round. Existing investors Balderton Capital, LocalGlobe and SBI also took part. They join an existing roster of angel investors including Taavet Hinrikus, Matt Robinson, Errol Damelin, Niklas Zennstrom, Alex Chesterman and Ian Hogarth.
Cleo’s previous round – Series A – which took place in 2018, brought in $10 million (a follow-on from the $5 million investment at the start of its journey in 2016/17).
At the time of Series A, it claimed over 600,000 users, with 94% of those aged under-35. It also launched in North America in spring 2018, which saw 350,000 people sign up within four months.
Cleo says it has now grown to four million Gen-Z and millennial users, 96% of which are US-based. It also claims an impressive 400% revenue growth in the last year.
The app is yet to make a profit, but says it “continues to drive towards profitability” and that it is “incredibly well capitalised”.
The latest cash injection gives Cleo “resources to explore new ways to improve credit, build personalised spending plans to stabilise financial safety nets and stop the paycheque to paycheque cycle”.
It also perseveres with its US expansion, including new leadership hires in the Bay Area.
“We’re building Cleo to become the financial advisor that a billion people need. One that talks to you like a real person, able to build trust and relationships like a bank never could,” says Barney Hussey-Yeo, founder and CEO of Cleo.
“The work we do at Cleo has never been more urgent. This crisis has been devastating to the generation we serve. They’re facing true financial hardship with no one to turn to.”
Tom Mendoza, deal partner at EQT Ventures, says the start-up and its CEO are “truly disrupting consumer finance”. He explains: “They’ve taken a radically different approach to money management and created an AI financial advisor with a personality that proactively delivers personalised insights that help customers spend less and save more.
“In the current climate, Cleo is now more relevant than ever. Getting answers to financial questions is particularly important for the younger generation, many of whom are trying to navigate the economic consequences of coronavirus – from graduates entering a dwindling job market to young professionals struggling to pay rent.
“As Cleo is a horizontal platform sitting on top of banks, the company will be able to scale globally faster than most of its competitors.”