Icelandic challenger bank indó has raised EUR1 million in seed funding from angel investors and moved out of stealth mode as it applies for a banking licence from the country's central bank and Financial Services Authority.
The first app-based challenger to emerge in Iceland, indó is following the usual path of releasing a smart money management app tied to a debit card. Once approved for a banking licence, the firm intends to offer current accounts with an introductory market-beating interest rate.
Indó is backed by Icelandic Venture Studio, which raised EUR1 million in February towards a total fund of EUR5 million for investing in early-stage startups.
Bala Kamallakharan co-founder of Iceland Venture Studio, states: "Banks form the core of the economic engine. I think when things become complex, they also become fragile that is every shock breaks it and hopefully you want to believe that it makes it stronger but I am not sure. We need to rethink banks, Indo is the first commercial bank license that will be issued by the Icelandic authorities after the 2008 financial crisis.
"The mission of Indo is to do to banking what Amazon did to retail. The principles are the same and I think the timing could not be more perfect."