In recent years, two technologies have disrupted the financial sectors: neobanks and blockchain. Neobanks have been a popular alternative to traditional banks, as they offer advantages like lower fees and higher interest rates. Blockchain technology plays a key role in cryptocurrency, and many enjoy the decentralized nature of working with cryptocurrency.

As a neobank that uses blockchain technology and allows users to turn their fiat money into cryptocurrency, Unbanked is providing the best of both worlds. By partnering with Visa, the company is also able to let organizations white label Unbanked’s platform and offer their own custom debit cards and accounts. We reached out to co-founder and co-CEO Ian Kane to hear more about his approach toward regulations and how far he leapt while jumping into the company.

Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length. 

Funding Round Details

Unbanked (formerly Ternio BlockCard) logo
Company: Unbanked (formerly Ternio BlockCard)
Security Type: SAFE
Valuation: $115,000,000
Min Investment: $150
Platform: Republic
Deadline: Sep 3, 2022
View Deal

In your own words, how would you describe Unbanked?

At Unbanked, we believe financial access and control is a fundamental human right.  Think of us as a neobank built on blockchain. We’re looking to improve the way people send, save, or spend money utilizing blockchain technology. The “money” we use is changing as everything is digitized. Some people hold money in government currencies like the United States dollar (USD) while others hold it in cryptocurrency (crypto) like bitcoin (BTC) or ethereum (ETH). Finance is personal for people, so there are many different examples I could give as to how it could apply to you. However, I’ll share two that are typically popular everywhere: 

  1. Faster transfers — either across the street or across the world. A traditional bank wire takes a few days to settle and costs $30 to initiate. If it’s an international wire transfer, you can add in a foreign exchange fee for swapping from one currency to another. Compare that to using blockchain, where a stable coin (USD-backed) can be sent for fractions of a penny and settled in seconds. It’s a better, faster, cheaper experience for the customer – all made possible by blockchain. 
  2. Earning more on your savings. Banks make money by taking in a customer’s deposits and lending them out to borrowers for a fee. The banks keep the majority of the fees and pay the consumers very little in return (approximately 0.5% annual percentage yield). The blockchain creates efficiencies where that yield can be paid to consumers. In fact, that’s exactly what our upcoming Yield product will do. 

To summarize, we’re using new technology to improve people’s financial experience. It’s similar to how the internet revolutionized the newspaper industry in terms of speed and efficiency. Our goal is to build a platform that allows digital currencies on the blockchain to interact seamlessly with traditional financial products like bank accounts or debit cards.

What inspired you to take the leap and start this company?

Like most people, my crypto journey started with Bitcoin, and then I began learning more about the blockchain that powered it. As I learned more, I was convinced it would radically change the world in ways we were only starting to comprehend. I believe that where blockchain is currently is comparable to where the internet was in the mid-nineties. 

Starting a company is scary. Four years ago, I was living in New Jersey. My wife and I had just gotten engaged. We planned a small backyard wedding to save money, and I wasn’t taking a salary. To be honest, there wasn’t a single moment or point where I thought this was the time to jump. Progress is often two steps forward and one step back. 

We had been making enough early progress that I had some gut intuition that it was the time to go. That’s when I moved and went all in on the company. I sold my place to relocate to North Carolina. I knew it was a big risk, but I also felt the opportunity size justified the risk. It ended up being the right choice.

Who is on your team and how did you come together?

We have a team of almost 50 people that put their heart and soul into the business every single day and work relentlessly to make Unbanked what it is. I think we have the trifecta that all startups need for greatness — a talented team building a great product with the perfect market fit in a market that is rapidly expanding.

How is Unbanked transforming the blockchain banking industry?

At the core, we’re blending traditional financial products (like bank accounts and debit cards) with blockchain to give people everyday use of digital currencies. Unbanked’s bet is that customers who use traditional financial products like bank accounts and debit cards on a daily basis also want the benefits of blockchain technology to be seamlessly integrated. 

They want the cheap fees of using blockchain but may not be comfortable managing their own keys. Alternatively, they may want to invest in BTC as an inflation hedge but not have to worry about merchants accepting BTC as a form of currency for purchases. Seamless interoperability is the long-term goal.

What does the competitive landscape look like, and how do you differentiate?

I don’t view this market as a zero-sum game. I’m also not concerned about competitors because of how we are approaching the market. Plus, the market opportunity is in the trillions, and it’s not just about technology but also geography and regulation to operate in this industry. 

If there was anyone with whom we would be competitive, it would be Revolut. Revolut raised $800 million last year at a valuation of $33 billion. Unbanked is bringing the benefit of blockchain and cryptocurrency to the masses by pairing it with the existing Visa, SWFT, and automated clearing house rails to provide a mobile-first digital banking solution of the future. 

In my opinion, Revolut is more focused on building a walled garden. I think we could go head-to-head with Revolut in the future, but I believe we have a better value proposition on the business-to-business side. Revolut does not white label, and they do not have a heavy crypto/blockchain focus like Unbanked. Our mission is to empower any company to be their own “Revolut” by building bank capabilities on the blockchain.

How do you think regulatory issues surrounding cryptocurrency could impact Unbanked?

Since our inception, we have always taken pride in being a US-centric company. Our bet at Unbanked has always been that regulation was coming and that to build a multibillion-dollar business requires adhering to all regulatory requirements — even if they haven’t been fully flushed out yet. 

Doing things in a compliant way doesn’t always allow us to be first to market, but it does allow us to build for the long term. I think a lot of other companies in this space have taken short cuts and decided to incorporate outside of the US or Western Europe as a means to evade regulators. What they are finding out now is that the US has a very long arm in terms of enforcement, and once you’re labeled as a “bad player” in this space, it’s very hard to get back on the “good” list.

Overall, I think regulation is a good thing. It protects consumers and gives clear-cut rules for businesses to engage and operate. 

How has Unbanked’s partnership with Visa helped grow the company? What potential partnerships do you see in the future?

Visa has been a fantastic partner. Unbanked is Visa’s only crypto-focused enablement partner for its Fast Track program. Unbanked and Visa have worked together to bring a lot of great crypto-companies to market with Visa products, and that list continues to grow.

Our mission now is to expand Visa products outside of the continental US and give even more access to people around the world. Visa is extremely bullish on the role that digital currencies and central bank digital currencies will play in the global landscape, so I only see great opportunities ahead for both of us!

How do you intend to use the money you raise this round to scale the business?

All of the money Unbanked makes is invested right back into the business for new hires, new products, marketing, etc. We have been cautious not to overdo it with spending to avoid a burn, but doing so also prevents us from growing as quickly as we could. That’s why we’re doing this capital raise. 

It affords us the ability to invest more into our business and accelerate our growth trajectory. In short, it saves time to expand faster. The goal is to put a lot of money into marketing to grow our customer base while also expanding our team size to push more products out, which will expand our geographic footprint.

What do you want potential investors to know about you and/or your company?

Democratization of everything has been a driving force at Unbanked since our inception. We democratize financial access with our products as well as democratize investment terms via our crowdfunding campaign. Everyone gets to participate on the same terms as everyone else – whether you’re a venture capitalist or a retail investor.

We have been very conservative with our spending at Unbanked and only invest into the business what we can afford to on a monthly basis. This is instilled in us from our roots. As mentioned above, I sold my place and didn’t take a salary for two years. That’s how much I believe in what we’re doing at Unbanked.   

Actions speak louder than words, and I believe we’re building a billion-dollar company. It’s not easy, but I think we have something really special here and only greatness ahead. 

As you think about the business 5-10 years down the road, what do you see exit opportunities looking like? Have you set any future goals for the company?

There are three options for an “exit” or liquidity event. We get acquired, we go public, or we build a great business that pays dividends to investors. To be frank, most people are never too excited about the last option. Most investors want to see an exit or liquidity event. 

I don’t want to put the cart before the horse, so right now I am focused on building a great business with growing revenues. This gives us a lot of options in the future. I believe we are building a billion-dollar business, so once we get there, we can evaluate what the exit plan may be. If I had to give an answer, I would think we have the potential to go public if a larger company does not try to acquire us first.  

We look forward to seeing where Ian and his team take the company. Unbanked is currently raising on Republic.