US challenger bank Current has raised new funding after recording a massive uptick in financially underserved customers during the pandemic.
Founded in 2015 by former Wall Street trader Stuart Sopp, Current has seen customer growth surge during the outbreak, adding more than 200,000 users in April and May.
The company recently exceeded 1 million active accounts and expects to double in size before the end of this year, Sopp says.
“Our rapid growth is a testament to just how many Americans need a more innovative banking solution,” he says. “Traditional banks can not adequately serve most Americans due to their legacy infrastructure. They charge exorbitant fees just to cover their costs to bank the over 130 million people in this country who live paycheck to paycheck. We solved this through dramatically lowering the cost of maintaining accounts and a business model that is not dependent on our members maintaining large deposits.”
Operating as the front-end to an FDIC-backed third party bank account, Current gives users access to their paychecks up to two days faster than traditional accounts, up to $100 in free overdrafts and free access to thousands of ATMs. The company makes its money from premium subscriptions and debit transactions.
The new funding - for an undisclosed amount - was provided by new investor Foundation Capital.
Angus Davis, partner at Foundation Capital, says: “With a third of the U.S. population living paycheck to paycheck, Current has a large opportunity in front of it and I am excited to partner with Stuart and the team as they continue to improve financial outcomes for millions more."
Sopp adds: “We feel we’re in the right place at the right time and anticipate reaching two million members by the end of 2020.”