Family current account provider Ffrees raises £2m
Banking start-up claims its product helps families ‘save as they spend’
A new banking start-up that claims to help families manage their finances more efficiently has raised £2m from a group of leading UK investors.
Founded by Alex Letts in 2012, Sheffield-based Ffrees offers a current account targeted at UK families, which rewards users with automatic savings each time they spend with a partnered retailer.
Opening an account is free regardless of social or financial status, and account holders gain access to promotions and deals with around 1,000 Ffrees commercial partners.
Since launching in January last year, the company has seen a rapid growth in uptake and now receives around 100 new applications per day, with just under £1m a month being deposited.
The £2m funding round, which Ffrees said was ‘significantly oversubscribed’, included input from tech investor London Bridge Software’s Technology & Innovation Fund, former Merrill Lynch Europe head of investment banking Justin Dowley and Kevin Parry, former group finance director of asset manager Schroders.
The investment follows Ffrees’ addition to 2013’s Accelerate 250 index, a list of 250 fast-growth companies set to drive job creation and economic prosperity.
Alex Letts, founder and chief executive of Ffrees, said: “Ffrees is the ‘new kid on the block’ in the basic current account sector, which is the slave of a centuries old banking business model. Millions of families today are not good business for the banks unless they can be charged fees and penalties. Not surprisingly families are unhappy. So we are rewriting the equation.
“These experienced investors bring us additional firepower and commercial expertise. We have lots of innovations for 2014 and it gives us the opportunity to create an even better, more differentiated service.”
Gordon Crawford, founder of the Technology & Innovation Fund, added: “Ffrees’ business model is a springboard for innovation in the banking sector, allowing under-banked, under-served families to access what they need. Ffrees is already addressing the savings crisis in the UK, and allows families to manage their money better.
“The truth is that the High Street banks’ Rolls Royce offerings are just not relevant to millions of UK families today. Most people simply need a free on-line facility, which helps them manage their money and save up. Modern technology allows this but legacy bank business models and infrastructure get in the way”.