The Royal Bank of Scotland's new digital bank Bó has paid £5 million for a 25% stake in student-focused fintech startup Loot.
Bó, a digital-only bank being developed by RBS's NatWest division, has topped up a previously undisclosed £3 million investment in Loot with another £2 million.
Launched in 2014, with more than 175,000 sign-ups, Loot is a digital current account targeting students and young people. Customers get a prepaid debit card and personal insights into spending patterns, allowing them to set daily or weekly budgets.
The investment comes as Bó gears up for launch later this year, taking on digital challenger such as Monzo, Atom and Starling.
Led by former RBS COO Mark Bailie, the new bank is being built by a lean team of developers and bankers and is expected to operate a marketplace model, meaning partnerships with several fintech firms.
Says Bailie of the Loot investment: "Loot is a really exciting brand and one that we’re proud to be associated with. Through its innovative use of technology and intention to change the status quo, it’s quickly built a following of loyal customers, with potential for rapid future growth."