New sofa, who doesn’t? Lifestyle-focused neobank Cogni turns to web3 – MovieUpdates

Digital banking startup Cogni joins the ranks of companies jumping on the crypto train. The mobile-based platform, founded in 2016 from the accelerator program of Barclays (which is operated by Techstars), launched with the intention of offering personalized banking products that fit the lifestyle of people aged 18 to 35, CEO and founder Archie Ravishankar told to MovieUpdates.

Now, Cogni has raised a $23 million funding round led by Hanwha Asset Management and CaplinFO with a new mandate — bringing web2 and web3 services together on one platform, Ravishankar said. Solana Ventures, FTX Ventures, Ship Capital, Thirty Five Ventures, ROK Capital, Bluewatch Ventures and Alsara Investment Group also participated in the fundraiser.

The company last raised a $1.7 million seed round in November 2018 before its official launch, and then raised a $5 million seed expansion round last year, according to Ravishankar.

“When we started, crypto was not on our agenda because we really wanted to build a financial platform that fit people’s lifestyles. When crypto and blockchain became the lifestyle of people in 2021, we decided that it is a lot more attractive to build on web3 than on web2,” said Ravishankar.

Cogni founder and CEO Archie Ravishankar

Cogni founder and CEO Archie Ravishankar

The company currently offers core banking services such as deposit accounts for free to its customers through a borrowed bank charter, much like many other neobanks, including Chime. It also offers two lifestyle-oriented products: discounted digital gift cards for popular brands like Adidas and Sephora that it buys through an aggregator and a feature that calculates a person’s carbon emissions based on their transactions. Ravishankar said the company serves “tens of thousands” of customers in the United States, though he declined to share a specific figure.

The first crypto-related product it plans to launch is a multi-chain wallet, which Ravishankar estimates will be released in about two to three months. The Cogni platform also provides its users with access to an exchange to trade their cryptocurrency through a partnership; Ravishankar said it has narrowed down the contenders for this offer to two major exchanges, but has not shared which one it is considering.

He noted that the company has not yet decided whether the wallet will be non-custodial, meaning users can hold their own cryptocurrencies and use them to transact directly. For reference, major crypto exchanges like Coinbase offer both types of wallets, although Coinbase’s default product is a custodial wallet in which users can trade crypto based on price movements, but not have direct access to the currency they hold.

After the launch of the wallet, Cogni plans to offer a DeFi savings account on the Solana blockchain with the aim of offering higher yields than traditional savings accounts, a typical feature of DeFi products in their current state. While the company has not officially chosen a partner for this product, Ravishankar said it is considering partnering with its DeFi-focused strategic investor Ship Capital.

According to Ravishankar, Cogni’s pivot to web3 still fits within the company’s original goal of building a bank that will accommodate the discretionary spending of young consumers. Cogni will use its basic banking services as a customer onboarding platform and then build more “social and lifestyle services” related to crypto and web3 in the long run, he noted.

Both the neobank market and the web3 focused banking services area are highly competitive. Cogni’s pivot to web3 is likely an attempt to stand out from the ranks of digital banking competitors, each offering their own interface and set of niche products tailored to specific demographics, while ultimately fulfilling the same core functions as traditional banks.

Neobank Cogni crypto-focused UI

Lifestyle-focused neobank Cogni’s mobile interface Image Credits: cognition

On the crypto side, there are plenty of independent providers of DeFi savings accounts, standalone crypto exchanges, and custodial and non-custodial wallets on the market today. Ravishankar believes Cogni will be able to differentiate itself by offering all of the above on one platform that also offers traditional banking services. He also pointed to Cogni’s easy-to-use interface and focus on customer service as potential benefits in this crowded field.

Most Americans “look for a plug-and-play solution from the existing system to web3,” Ravishankar said. “They don’t want to download multiple applications or learn the jargon,” he continued, explaining that a simple, easy-to-use solution is likely to be more appealing to users.

Cogni today has 24 employees in New York and San Francisco, with another eight across Europe, according to Ravishankar. The company had about 18 employees when it picked up its seed round in 2018 and then downsized during the pandemic before growing back to its current size, Ravishankar said. It aims to attract new hires with a background in web3, both in the product and technical teams, and also strengthens the compliance team to prepare for new product launches, he added.

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