Another Attack On The Banking Industry: uBank Raised $8 Million From Runa Capital

It seems that a lot of companies in our region are setting their sights onto the banking industry. After all, according to Gartner the worldwide mobile payment market will be worth $617 billion with 448 million users by 2016. That is just the mobile part of it. So if you grab just a small piece of this market, you are definitely doing something right. Today, uBank of Russia announced an $8 Million Series A funding round from Runa Capital, helping them to accelerate their growth in the region.

The main concept behind uBank allows to make all sorts of payments and transfers directly from mobile devices or PC's. This includes paying for bills and transferring funds. To source the money, users can attach multiple credit cards of different banks, thus basically uniting them all under one account. There is a 0% commission for topping up the account as uBank monetizes through making partnerships where they charge a commission fee and also by providing banks with a mobile banking solutions for their customers.

Banking is one of the most lucrative and at the same time one of the most difficult industries to disrupt with a lot of rules and regulations in place that are just way too fixed to easily change. You would expect this to be even harder in Russia, however we reported earlier that Rocketbank, also from Russia, was able to get passed the bureaucracies and difficulties of the industry faster than an analogous Simple in USA.

This is further demonstrated by the fact that uBank was able to secure a deal through which it comes preinstalled on all Samsung and Fly smartphones selling in Russia, this would definitely be a difficult deal to make in USA.

“With investments, which we received from Runa Capital, our company is going to develop more co-operations with regular payment receivers to accept uBank. Therefore, we will out-compete current players on payment transaction quantity using mobile application. Using the mobile app development experience, which we have, we are changing the way how people will be paying in future,” – says Laura Ashizheva, CEO of uBank.

However, from our point of view, this is still a risky path to tread. The company has received 250,000 downloads of their app since launch 2 months ago, however most banks are already developing their own mobile payment solutions and there are many more players entering the banking space such as Holvi from Finland, Simple in USA and RocketBank in Russia. In its current implementation, uBank basically acts as a developer that was able to introduce true mobile banking before anybody else was able to do so, since the functionality is not particularly unique.

To stay ahead of the competition, uBank is working on other features such as the ability to pay at cafes, restaurants and to provide peer-to-peer loans.

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