New Fintech startup Loot has gone into administration. They was a second multi-million pound investment from Royal Bank of Scotland (RBS) couple of months ago, but it was not enough for the struggling start up.
This London-based start up was forced to call in Smith & Williamson on Wednesday last week after having difficulties to manage their operating costs.
RBS recently injected £2m into the financial app aimed at helping students and young people to save money . However this deal also secured a 25 per cent stake in the business for the bank. Their investment was second time RBS has given money to Loot project, last July they made a £3m investment.
Loot account holders receive a pre-paid debit card and can view personal breakdowns of their spending patterns, therefore allowing them to set daily or weekly budgets.
Loot management did try to find cash through a crowdfunding rounds launched on Seers, encouraging its 200,000 existing customers to register interest. However this business move was not a success.
Smith & Williamson joint administrators Henry Shinners said: “While the Loot offering is one that has attracted a lot of interest and praise, the business wasn’t yet generating sufficient revenues to meet its ongoing costs and unfortunately the board could not secure the additional funding needed.”
The administrator have confirmed that customer deposits are safe, and account holders can continue to access their service as usual.
RBS practice of partnering up with Loot follows a general strategy of high street banks now days after the success of neobanks like Revolut and N26. Most high street banks are running a mixed strategy of setting up their own digital apps operations as well as buying, or investing in rivals or smaller fintech start ups to catch up with their rivals quickly.