Fintech Insights - Australia’s First Neobank, Volt, Shuts Down After Failing to Raise Funds

Australian Neobank, Volt, has announced that it is shutting down amid troubles raising appropriate funds to survive. The closure of Volt, Australia’s first neobank, comes after a prolonged effort to raise funds in order to fuel further growth failed to attract significant investment. Following the announcement of Volt’s closure, all customers of the neobank will have until July 5th to transfer their funds out of their Volt accounts.

The combination of rising inflation and interest rates has made it harder for neobanks to compete with established banks; hampering their ability to attract investors in a time where investors seek out lower risk investments. This comes at a time when many fintechs are struggling to gain sufficient investment; resulting in companies such as Klarna raising funds at less than half of its peak $46 billion valuation to attract investors.