On the left, Ignacio Sainz, Chief Operating Officer.
On the right, Nicolas Faucon, Chief Marketing Officer.

Don’t pull your hair out! Because we know that our clients come to us mainly from the perspective of “nonbanking”, we would like to reassure you right now: VeraCash® will not become a bank that is, by necessity, a “credit institution”, as we would call it! 

We will remain an “agent” for a payment institution so that we can:

  1. retain our independence linked to our management of precious metals, 
  2. preserve our flexibility by working with one or more strategic partners 
  3. develop payment methods but avoid the use of credit, which contributes to the creation of an “infinite economy in a finite world”.

Why “fundraise”?

In order to finance some ambitious developments that are much sought-after by our user community, we need to go through a phase of fundraising to allow us to move quickly whilst retaining the level of profit needed to keep our activity going. 

Self-financing is not possible when the investments amount to tens or hundreds of thousands of euros. This is where we are today: in order to accelerate our developments (and not to prop up any losses), we need external capital support! Many businesses with global ambition go through a number of successive funding initiatives: Series A, Series B, etc.

VeraCash® completed an initial crowdfunding pool in 2017. At the time, over 200 French clients invested €575,000 to finance the initial development phase.

What will the €2.5 million of funding be used to finance? 

  • €150,000 = Strengthening security and putting two-factor authentication in place
  • €250,000 = Adding virtual cards to your VeraCash account
  • €400,000 = Launching a new “small ads” application, exclusive to our VeraCash® community
  • €600,000 = Integrating a fifth material: the Gold Euro
  • €1,450,000 = Implementing a personal IBAN to allow direct debits and inbound payments from third party accounts
  • €1,900,000 = Adding wallets for euros and other currencies – USD, GBP, CHF – with associated personal IBANs
  • €2,500,000 = direct or partnership deployment with other European countries

At present, the company has 30,000 European users and stores over 2 tonnes of gold and 19 tonnes of silver in vaults for its customers.

2021 will be a landmark year of transformation for VeraCash®, moving towards neobanking services while remaining the agent of a payment institution, guaranteeing its independence at the same time as it reduces its overheads.

With its innovative approach, VeraCash® has been at the crossroads of different markets since its creation in 2015: precious metals (the heart of our business), electronic payment methods and neobanking. Today, we totally embrace this hybrid role and we can honestly say that our payment card is more attractive than most of the traditional bank cards, and even that peer-to-peer precious metal trading is as competitive as PayPal and cheaper than Western Union. Yes, VeraCash® brings together the best of all of these worlds!

Raising funds is great, being profitable already is even better

The neobanking sector is all too aware of the profitability challenge. In an ultra-competitive sector where the Freemium model is all-powerful – i.e. a model based on offering limited features free of charge with a view to encouraging you to upgrade to a paid subscription – many players find it hard to be profitable. This raises questions about their economic model, the cash burn linked to investments in mass-marketing to acquire new clients and ultimately the long term sustainability of the business.

Revolut is the perfect illustration of these challenges. The British neobank raised 250 million pounds sterling in 2018 and 500 million more recently. However, whilst the turnover trebled from 2017 to 2018, so did the net losses over the same period.

Revolut turnover and revenu 2016 to 2018
So while Revolut is multiplying its gains each year, it is also multiplying its losses

When entrusting our money to a financial institution, we need to have confidence in them. But can we trust a business that is not profitable? Unlike the majority of the neobanks, we don’t envisage that VeraCash® will only be used for travel.

VeraCash® is continuing its growth

VeraCash® financial statements are public and can be accessed on the internet. This has not escaped the notice of certain detractors, who accuse us of not being a profitable company. These people probably don’t understand anything about financing startups, because the quest to break even during the first few years of trading is the main challenge for all innovative companies. Similarly, the losses experienced in the early years of trading disprove the myth claiming that those who trade in precious metals are raking in the profits. Sorry to disappoint you, but we don’t drive around in Porsches! 

For all of you who understand how startups work or who have already invested in an SME, we are delighted to tell you that VeraCash® has been profitable since 2019. Why does that matter? Simply because it means that our economic business model is viable and ensures the sustainability of the business.