Australian neobank Volt will shutter its operations after failing to raise additional funding.
Volt Bank, which was Australia’s first neobank, will close its deposit-taking business, return all deposits to customers and surrender its banking licence, the company said in announcements on its website.
The move followed unsuccessful efforts to raise enough additional funding to support the business, Volt said. «Reuters» reported Volt had planned to raise 200 million Australian dollars, or around 138 million US dollars, in February. The neobank cited the pandemic and «the current challenging global economic climate,» without elaborating, for its inability to raise funds.
Volt had raised 90.1 million US dollars across three funding rounds, with Australian Finance Group and Collection House Group the lead investors, according to Crunchbase data. The bank will return more than 100 million Australian dollars in deposits to customers, according to the Australian Financial Review
Selling Mortgage Portfolio
«In reaching this difficult decision we have considered all options but ultimately, we have made this call in the best interest of our customers,» Volt CEO Steve Weston said in the statement.
Volt has entered a deal to sell its mortgage portfolio as well as returning deposits to customers, the company said, adding it has the necessary liquidity for the process. Volt said it is taking steps to reduce expenses and staff numbers, other than the people required to support returning deposits and monetizing remaining assets. The bank had 51-200 employees, according to its LinkedIn profile.
Volt said it has now set the interest rate on all its accounts to zero, and it will begin closing the accounts from 5 July.
The Australian Prudential Regulation Authority (APRA) said on its website that it is closely monitoring the process. APRA said Volt exiting the banking industry is the neobank’s «commercial decision.»
