Consumers have to manage their household bills as inflation remains stubbornly high compared to previous years and the siren call of subscription services such as Netflix and Spotify continues to beckon. They turn to other forms of payment. Online prepaid platforms have benefited as a result.
That's the bet today. Recharge.With ABN AMRO, a major European player in online prepayments, with €45 million in debt, the market is looking at M&A and eventually moving into Fintech-style services that can compete with some. Larger payment platforms.
Apple Google Spotify Xbox and through digital vouchers from brands including PlayStation. Recharge is attacking the market from several consumer angles.
It has strong cash reserves, claims 30% year-on-year revenue growth by 2024, and aims to reach more than 100 million euros in revenue by 2025, it said.
With the new fund there will be a considerable war chest for acquisitions.
In an interview with TechCrunch Recharge CEO Günther Vogelpoel said, “We see an opportunity to grow faster through M&A, and there are many opportunities in other markets and segments where we can consolidate, especially since this industry is still young.”
Prepaid card market in Europe to grow at a CAGR of 7.6% during 2019-2023. Between 2024 and 2028 Expected. Growing from over $251 billion by 2023 to $395 billion by 2028 to record a CAGR of 9.1%.
More interestingly, Recharge's application for an e-money license with the Dutch authorities suggests plans to create a more robust 'Fintech' style platform.
Vogelpoel said Recharge is very enthusiastic about moving into the financial services space: “We are still applying for an E-money license in the Netherlands, which will be licensed for Europe. So we can start our own financial services.” He said they would be in the market for a wallet-like or card-type company that would “fit with our existing customer base.”
But what about the technology aspect of this next step? “We're a profitable company,” Vogelpoel says. “We have more than 30% growth by 2024, which is boosting our profitability. So we have money in the bank to invest in our platform and technology.”
For customers, the move to holding larger funds makes sense: “If you have a wallet as a central product, you can connect that wallet to other services, as well as payments or cards that people can use to issue virtual cards… While Neo banks has a really good portfolio of services, we mainly meet the needs of our customers who like budget, control, privacy and security.”
It's those privacy and security aspects that he thinks will give him the edge to recharge, as prepayment often offers certain services and better privacy.
In a statement, Senior Banking Digital and Consumer clients ABN AMRO said, “We see great promise in Recharge's growth trajectory as they expand their reach within the global prepaid space.”
Recharge in 2021. Before 10 million euros ($11.8 million) in debt funding led by London-based Kreos Capital; Raised €22 million in 2019 from $35 million Series B led by new investor SmartFin and Prime Ventures.