Swiss fintech nsave, which makes banking in Switzerland accessible to people in countries with unstable banking sectors or experiencing high inflation, has raised $4 million in funding. The round was co-led by Sequoia Capital and TQ Ventures with participation from Y Combinator, SV Angel and FONGIT: the Geneva State organization that supports tech startups.
Amer Barudi and Abdullah Abu Hashem co-founded nsave in 2021 from lived experiences. Baroudi told TechCrunch that he saw his family lose their savings due to currency devaluation and the inability to open bank accounts in foreign countries when he fled the war in Syria years ago, as they were considered too dangerous.
He said offshore banking has always been accessible to a small number of people, often the wealthy or those with large networks, adding that nsave wants to democratize that access to everyone else.
“It’s a very simple product so far: a reliable overseas account that you have where you can keep your savings in the hard currency of the dollar, euro or pound for now and you can access it when you need it,” Baroudi told TechCrunch, adding that the fintech has partnered with regulated financial institutions to offer the service.
To access, users must register with the app and go through an onboarding journey that Baroudi says includes a risk assessment based on the strict banking regulations they must adhere to.
“What’s really exciting is how we approach solving this. We want to rethink the way we do risk assessment and, in fact, we need to put the appropriate safeguards in place to assess the real risks because where you come from is not really the risk factor,” he said.
“And then, based on the risk scores, you might be prompted for different question streams or enhanced due diligence mechanisms. We may ask you for additional documents. A lot of it is automated and happens dynamically.”
After onboarding, the fintech uses its dedicated transaction monitoring tool to ensure it adheres to Swiss banking regulations, including anti-money laundering and anti-terrorist financing laws.
Barudi said the duo, previously Rhodes Scholars in the UK, chose Switzerland because of the steps the European country has taken to promote innovation, including a fintech licensing regime. The license allows fintechs to act as financial intermediaries as they work towards becoming fully regulated banks.
He says the fintech is in the early stages of product development, but will continue to double down on the savings and wealth side of retail banking as it listens and strives to meet the needs of its target customers while adhering to its mission to create secure banking for the economically excluded.
“We understand what it means to be financially excluded, the impact, the struggles and the challenges of this problem … that’s why we’re building a platform where people from distressed economies can protect their savings and grow their wealth,” he said.
The company is targeting millions of people in troubled economies, for example Lebanon where inflation is skyrocketing, the currency has been devalued by more than 90% and people only have access to limited savings as banks set draconian limits.
“Developing a global product that complies with strict financial regulations is no easy task, let alone building partnerships with banks – yet the nsave team has done just that,” said George Robson, Partner Sequoia Capital. “Now nsave is live, there is finally a reliable option to protect its users from the rampant inflation of distressed economies by providing safe, stable offshore accounts to people who need them most.”
It has been updated to indicate that fintech will only serve people from troubled economies.
