TreeCard provides users with a money management and spending platform tied to a wooden debit card.
TreeCard, a climate-conscious digital currency app, has raised $23 million from investors in a new funding round.
Founded by British entrepreneur Jamie Cox in October 2020, TreeCard is a novel concept in the fintech world. It provides users with a money management and spending platform tied to a wooden debit card.
The company uses 80% of profits earned from token exchange fees to plant trees through a partnership with green search engine Ecosia. TreeCard has so far planted more than 200,000 trees.
The agreement highlights the growing interest of venture capitalists in companies that tackle climate change. Funding for climate tech startups hits a record $111 billion by 2021, according to a report report from the UK startup network Tech Nation.
“There are hundreds of millions of people around the world who are changing their behavior based on the environment,” Cox told CNBC in an interview. “There isn’t a single super app for the environment yet.”
Super app works like all-in-one platform serves a variety of user needs including instant messaging, banking and travel. Cox envisions TreeCard as a climate-focused super app — his app, for example, includes a game that lets users visualize how many trees their activity has helped create.
Peter Thiel’s Valar Ventures was the largest investor in TreeCard’s funding round, while EQT, Seedcamp and climate-centric venture capital firm World Fund also participate. Valar is a major investor in fintech, having previously purchased shares in Wise and N26.
The platform, which is still in beta testing mode, plans to use the funding for a formal launch by the end of 2023. Additionally, TreeCard will use the cash to grow its team of around 30 people. , with the goal of nearly doubling the size .
TreeCard is currently only available in the US, with a waiting list of over 250,000 customers. It is currently gradually introducing users. TreeCard also plans to launch in the UK and Europe, “hoping to launch soon,” Cox said.
Despite being based in the UK, TreeCard chose the US as its launch market. The United States has been a difficult place for rival European fintechs. Monzo withdrew its application for a US banking license, while N26 shut down its operations in the US completely.
TreeCard itself is not a bank but offers its accounts through Sutton Bank, a regulated lending company.
The TreeCard app includes a game that allows users to visualize how many trees their activity has helped create.
The higher percentage of fees merchants pay each time a customer uses their card to spend makes the US a more lucrative opportunity than Europe, the TreeCard CEO said. Europe.
But according to Cox, what European fintechs often do in the US is not realizing “the kind of requirement for a financial product is very different from that of Europe.”
“When financial companies come from Europe, they don’t understand the American audience very well,” he told CNBC.
“Rewards are almost always front and center for products especially spending but a lot of financial products. It’s a rethink in Europe.”
TreeCard offers customers up to 3% annual interest on their deposits, a feature it offers through third-party providers.
“The pledge is that your money is not used for fossil fuel investments,” says Cox.
Banks have transferred large sums of money to support fossil fuel companies over the years. Analysis from campaign groups Urgewald, Reclaim Finance and more than two dozen other NGOs shows that commercial banks transfer $1.5 trillion to the coal industry from January 2019 to November last year.
TreeCard’s funding also defies some of the difficulties facing the financial technology sector, where companies are delaying listing plans and cutting costs in preparation for a possible recession. . Klarna, buy now, pay later for sure, saw its value 85% off in July, and laid off 10% of the workforce.
“We’re going to hire but we have to be careful,” Cox said. “The environment is different from last year.”
He added: “It’s important that businesses in the next year and a half, perhaps, consumer businesses will have to find a way to grow not just in the conventional way, ‘pour a lot of money into Facebook advertising and have get users’. That’s not going to be a sustainable growth model.”
While in college, Cox founded a company called Cashew, which he describes as “Venmo for the UK” He then joined Peter Thiel’s Thiel Fellowship, a two-year startup program where he founded cloud computing startup FluidStack.