Skype billionaire Niklas Zennstrom and LocalGlobe back UK fintech startup Cleo and its Facebook AI chatbot for finance
The billionaire co-founder of Skype and one of the UK’s top startup venture capital investors are backing a UK fintech behind a chatbot helping people with their finances that could kill off banking apps.
Niklas Zennström along with Robin and Saul Klein’s LocalGlobe have invested £2m in a seed stage funding round of Cleo.
Cleo’s Facebook Messenger bot connects with bank accounts and credit cards and users can ask questions such as “what’s my balance?” and “how much have I spent in Tesco?” in the same way as chatting with friends.
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Since launching in January, more than 50,000 people are managing £400m of their cash with Cleo and it has answered more than one million queries
And the startup said more than three quarters of users stop using their bank’s app within three months of signing up with Cleo.
The fresh cash follows hot on the heels of a £700,000 angel investment late last year from Zennstrom and a host of other well-known investors, who also participated in the latest round. That includes Zoopla co-founder Alex Chesterman, Wonga co-founder Errol Damelin and Jason Goodman, founder of ad agency Albion, who will also become a non-executive chairman.
Cleo co-founder Barney Hussey-Yeo, a former data scientist at Wonga, told City PM the startup will use the cash to pursue “aggressive” scaling, including launching in the US and Australia, develop its product and grow the team.
On expansion to the often hard to crack US, he said “You want to play in the best league – it’s where the competition is and we’re ahead of them. We want to win the market.”
It is adding new functionality such as energy switching and loan and credit card comparisons, while the assistant will launch on WhatsApp in the next 6 months.
Between them Facebook Messenger and WhatsApp have more than 2bn monthly users each month.
Hussey-Ye said it has also tested out the assistant on Amazon Echo and Google Home smart home speakers, However, security is not yet up to scratch when it comes to using the device for banking as anyone is able to use it.
The year-old startup will grow staff from eight to 12 by the end of the year and plans to spend between £500,000 and £1m on marketing campaigns. So far it has picked up those 50,000 users “very much” by word of mouth.
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The startup was formed at Entrepreneur First, the tech accelerator which also backed Magic Pony, the AI company bought by Twitter. EF also holds a stake in the company.
“We were very impressed with the application of AI to engage a community of digital natives frustrated with the difficulties of communicating with traditional banks,” said new backer Robin Klein, general partner at LocalGlobe.
“In a short time, the Cleo team has already demonstrated product execution for growth and retention of its target demographic. People using the service really understand where their money is going and can find ways to save and replace with better financial products.”