Holvi, the Finnish digital banking service for businesses owned by Banco Bilbao Vizcaya Argentaria (BBVA), has pulled out of the UK, Sifted reports.
Less than six months after its launch in the market, Holvi has followed in the footsteps of other fintech start-ups which have abandoned their UK expansion plans.
In February, German neobank N26 pulled out of the UK citing Brexit after struggling to drive customer numbers since 2018. Then in July, US trading app Robinhood scrapped its UK launch after putting off activating its trade licence which it secured back in August 2019.
Why is Holvi following suit?
The Finnish start-up has reasoned its departure is down to both COVID-19 and Brexit.
“Uncertainty is increasing to a point where we have to make an adult decision,” says Holvi’s CEO, Antti-Jussi Suominen. “In January we were confident about entering this new market, even with Brexit ahead, but then the world changed. We never imagined what would happen with COVID-19 and it looks like we are headed for a no-deal Brexit.”
UK customers have until 31 October 2020 to move their money and close their accounts.
Suominen insists Holvi’s departure is not down to “performance issue”, instead having made good headway customers sign-ups. The start-up has not revealed its UK customer numbers but did say the UK market was “very competitive”.
The UK is Europe’s largest small and medium-sized enterprise (SME) market. And with that comes a lot of different players – ANNA Money, CountingUp, Pockit, and Starling Bank, to name a few.
What does Holvi do?
Headquartered in Helsinki, Holvi had around 200,000 customers when it entered the UK, largely spread across Finland and Germany. Its customer base consists of the self-employed, sole traders, freelancers and small business owners.
It offers these users a business payment account powered with Mastercard, invoicing tools and bookkeeping capabilities. It promises to save them “up to ten hours a month on time spent managing business finances”.
The start-up was acquired by the Spanish banking group BBVA in 2016. It will focus on its core markets where it has an “established presence” in Germany and Finland.
At the moment, Holvi can operate in the European Economic Area (EEA) under a licence issued by the Finnish Financial Supervisory Authority (FSA).
But in the UK, it is still unclear whether competitors like Holvi need a separate banking licence to serve Brits.
Holvi ran its UK operations largely out of Germany, suggesting minimal job losses as a result of its retreat from the market.