Yonder — one of the UK’s best-known credit card fintechs specialising in reward points — is today announcing that it’s closed a £23.4m funding round.
The investment was co-led by global VC firm RTP Global and Repeat (previously known as Jigsaw), a new fund that’s operated in stealth for the past four years. LocalGlobe’s sister fund Latitude also participated in the round.
CEO and cofounder Tim Chong tells Sifted Yonder’s valuation is now above £100m. That’s up from the £70m valuation it earned at its last funding round in April 2023, when it landed £12.5m in equity funding and £50m in debt financing.
It’s now raised just over £100m since launch — but this round should be its last before reaching profitability, says Chong.
The credit card app’s most recently available Companies House accounts say that it operated at a loss of just over £4m for the year ending in March 2023. Chong didn’t share exact figures with Sifted but says that Yonder’s revenues have tripled in the last 12 months.
“This will be the last funding round we have to do,” he says. “We will be able to operate independently after this.”
The “financial lifestyle platform”
Founded in 2021 to target young professionals and expats, Yonder is one of the rare credit fintechs in Europe to focus on rewards rather than credit building or novel borrowing instruments, such as buy now, pay later. To compete with established players — such as Amex or Avios cards — Yonder instead focuses on experiences, particularly with local restaurants and independent merchants.
“For us, it’s always been about how you can use credit cards to unlock what’s best in the city and also help you build a healthy relationship with credit,” says Chong.
Yonder also offers tools to encourage users to pay off balances weekly rather than at the end of the month.
It’s an approach that Chong says has seen some traction even in the tough market of credit card rewards — it currently counts over 20k users across the five cities where it’s available in the UK.
Yonder has likely also benefited from a change in tune towards credit cards among millennials and Gen Z. According to American Express’ most recent earnings call, this age cohort makes up 33% of total spending on its cards. That goes against some previous thinking that younger generations prefer BNPL over credit cards.
100k people have also applied for Yonder’s card, Chong says, but a vast majority are rejected as too risky for a smaller lender to take on.
“If you just want to take a credit card out to borrow, we’ve never really been about that,” he says, adding that interest revenue, along with payment interchange fees and a £15-a-month membership fee, still make up the large majority of its business model. Yonder also makes money from the businesses it partners with — “a minority” of its revenue but its fastest growing stream.
Yonder’s new chapter
Yonder, which has previously focused on discounts at bars and restaurants, is now ramping up its partnerships with larger brands, particularly in the airline industry. Most recently, Yonder partnered with Qatar Airlines so that users can earn and use points on flight purchases.
Partnerships with hotels, as well as offering an in-app restaurant booking service, are also in the pipeline, putting the fintech into closer competition with established credit card companies.
Future iterations of the product will guide you on where to stay, eat and go once you’ve booked a flight to your destination, Chong says. The company is looking at implementing AI tooling in these forthcoming curation tools so that, in the vein of Spotify or Netflix, its recommendations will be based on how you use the app.
Eyes on Europe
Yonder is also thinking about employing AI translation tooling to speed up localising its products in new markets as it gears up for European expansion.
Yonder’s move into the EU will be done without a huge hiring spree — it’s looking to grow its team of 45 to around 60 by the end of next year, some of whom will likely be based in its first launch country, which is yet to be decided. While the company is currently only available in the UK, Chong believes it can achieve similar adoption levels on the continent.
“We built the technology from day one to be international ready,” he says. “Harry [Jell], one of my cofounders and CTO, ran [credit score platform] ClearScore’s product and engineering team for about two years. And so we’re very well experienced in what it takes to internationalise a platform.”
Read the orginal article: https://sifted.eu/articles/yonder-raise-exclusive-news/
