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With inflation still stubbornly high compared to previous years, and the siren voices of subscription services like Netflix and Spotify continuing to attract, consumers have understandably turned to alternative forms of payment to manage their bills of the family. As a result, online prepaid payment platforms have benefited.
That’s the bet that’s being made today Rechargea key European player in online prepaid payments, which has secured a €45 million debt facility with ABN AMRO to look at strengthening the market with a round of M&A, as well as moving into Fintech-style services that could in order to compete with some. of the largest payment platforms.
Through a range of digital vouchers from brands such as Apple, Google, Spotify, Xbox and PlayStation, as well as cross-border remittances, Recharge attacks the market from many consumer angles.
It says it already has robust cash reserves and claims revenue growth of 30% year-on-year in 2024, while aiming to reach more than 100 million euros in revenue by 2025.
With the new funding, there will be a considerable war chest for acquisitions.
In an interview with TechCrunch Recharge CEO Günther Vogelpoel said: “We see an opportunity for faster growth through M&A and there are a number of opportunities in other markets and segments that we can consolidate, especially since this industry is still so young “.
The prepaid card market in Europe grew at a CAGR of 7.6% during 2019-2023. Between 2024 and 2028 it is expected to register a CAGR of 9.1%, increasing from more than $251 billion in 2023 to $395 billion by 2028.
More interestingly, Recharge’s application for an e-money license with the Dutch authorities suggests that it has plans to create a more robust “Fintech” style platform.
Vogelpoel said that Recharge is “very excited” to evolve in the area of financial services: “We are in the application process to apply for an E-money license in the Netherlands, which will give us a license for Europe. With this , we can launch our own financial services.” He added that they would be in the market for some type of card or card company “that would have a good fit with our current customer base.”
But what about the technological aspect of this next phase?: “We are a profitable company,” said Vogelpoel. “We have more than 30% growth in 2024 which has also increased our profitability. So we have money in the bank to invest in our platform and technology.”
He said that moving to holding larger funds for customers also makes sense: “If you have a wallet as a central product, you can connect other services to that wallet, as well as payments or cards that people could use to issue virtual cards … Neo banks. Have a really good portfolio of services, but we, above all, meet the needs of our customers who love the budget, have control, and like to have privacy and security.”
It is those aspects of privacy and security that he thinks could give Recharge an advantage, going forward, since prepaid often offers greater privacy with some services.
In a statement, Bas Janssen, senior digital customer and consumer banker, ABN AMRO, said: “We see great promise in Recharge’s growth trajectory as they expand their reach into the global prepaid payments space.”
In 2021 Recharge at first raised a 10 million euro ($11.8 million) debt financing round led by London-based Kreos Capital, a $35 million series B led by new investor SmartFin, and 22 million euros from Prime Ventures in 2019.
