The digital bank, Lunar, brings a new business bank to the market to ensure that entrepreneurs and small companies can get a bank account quickly and inexpensively.
In the Facebook group ‘Iværksætter Netværk’, meaning Entrepreneur Network, Danes with a passion for entrepreneurship and a dream about starting their own business meet. Almost daily, the entrepreneurs of the group face the same challenge in the startup phase: The small companies need to find a banking connection to start their new business.
The current banking solutions targeting entrepreneurs are either too expensive, take too long to establish – or the bank does not even want them as a business client because they consider the companies to be too small. But Lunar is here to challenge this existing scenario.
“It’s easy to start a business in Denmark, but as a small entrepreneur, it’s difficult to get a bank account. Not all banks find it attractive to work with small entrepreneurs, and, therefore, it takes several weeks to get a business account, and this account comes with significant connection fees. We’ve customised an account for small companies, and, therefore, this becomes good business for both partners,” says Jacob Faber, who was headhunted as Director at Lunar Business from a position as Head of Growth & Startup at Nordea.
Already, before the launch, Lunar received hints of the needs among entrepreneurs for better and cheaper banking solutions: In advance, 2,600 had signed up on a waiting list to Lunar Business.
The market is ready for competition
Regardless of the company size, a bank utilises the same resources to establish a business customer. Thus, larger companies are more attractive as customers simply because they are better business for the banks.
This means that merely a few banking solutions target the smallest companies, which accounts for 300,000 in Denmark and approximately 1.5 million in the Nordic region. And it is precisely these small companies that Lunar aims to target.
“Newly founded companies are driven by passionate people, who are in desperate need of a bank account so they can move on with their business – and then it is frustrating to wait for several weeks, which they do in the traditional banks. By automising the majority of the onboarding process, we make it quicker and cheaper to get going. By doing so, we can onboard approximately 100 companies a day – and they receive their virtual credit card and account number immediately,” Faber states.
Thanks to new technology, business customers become profitable more quickly for Lunar – and this is also without demanding for them to be private customers in the bank. Thereby, the small business owners become attractive customers for the bank, and their needs will not continue to be disregarded.
In the future, the bank is a marketplace
Lunar’s business account is targeted towards small entrepreneurs. And soon, Lunar will also introduce a solution targeted twoards scaleups, which have more needs. The standard product is quite simple: A mobile account with a linked Visa credit card, integrations into the accountant software programmes Billy, e-conomic, and Dinero, and payment-, supplier-, and transfer services, and loans through the Swedish Qred.
Our mindset is to simplify banking as much as possible, so the business owners do not need to spend time on it at all. Instead, they should focus on their business operations,” Faber says.
Lunar already plans to expand the offer. And because Lunar has developed its own banking platform, Lunar can quickly offer new solutions to the customers as well as integrate with the best third parties.
“In the future, I believe we have to view our bank as a marketplace. The customers pay a subscription fee to be a part of this, and then they can buy the extra services, which provide them extra value. This will not be in the traditional segment boxes – our customers should not pay for anything they do not need,” Faber states.