Crypto Friendly Digital Bank Arival Accepting Investment Reservations on SeedInvest for Upcoming Crowdfunding Round
Digital challenger bank Arival is now accepting reservations for preferred stock on SeedInvest.
Arival will be a crypto-friendly bank – unlike most traditional banks in the United States which tend to be crypto-averse.
The bank was founded on the notion that banks in many places around the world are closing accounts of crypto-related businesses as they are fearful of any collateral ramifications to holding these types of accounts. Arival says they surveyed “hundreds” of Fintech and blockchain startups in their network and 90% indicated they have encountered problems in some capacity.
But it is not only the crypto-sector that Arival wants to service. The digital-only bank wants to provide banking services to all SMEs and GIG economy companies seeking an alternative to the high cost, low service, experience of traditional brick and mortar banks.
Based in Puerto Rico, Arival has applied for banking license under the International Financial Services Act (IFE Act) and expects approval soon.
The IFE license will provide Arival with access to the US Federal Reserve system while still being an offshore bank which makes the license unique. Even better, an IFE license means the bank is subjected to just a 4% tax rate. The relatively new law has become fairly popular due to the advantageous structure and access to the US market.
Arival also states it has commenced the process for a license in Europe too.
Jeremy Berger, co-founder and COO of Arival, wrote a great blog post on the banking license odyssey. As one would expect, receiving a banking license is not easy and it takes a lot of time.
As for its tech stack, Arival is working with Mbanq to “integrate cloud-based core banking technology.” Regulatory compliance will be core to Arival’s operations.
The actual bank plans to launch in October 2019.
Arival Bank was founded in 2017 by Slava Solodkiy & Igor Pesin. The duo had found some success by backing some well known challenger banks like Fidor or Moven. The experience in the challenger bank world and the challenge crypto businesses were experiencing in getting access to simple bank accounts were enough to propel the entrepreneurs to launch their own bank.
Having previously raised $1 million in seed capital, it appears that Arival is ready for the next step. Crowdfunding capital is a well-trodden path for digital banks as it guarantees a boost in name recognition while driving bank customers as your shareholders will definitely want the bank to succeed.
So what do you get when you invest in Arival?
For the moment, SeedInvest is only taking non-binding reservations. There will be a minimum investment of $10,000 per investor. The round seeks $3 million at a pre-money valuation of $15 million for preferred equity. Few other details of the security are available as of yet.
It has been reported that SeedInvest partner platform Crowdcube will also be co-listing the offer which makes a lot of sense. Banking is regulated at the national level but services are provided globally. Geographic boundaries are becoming less important for digital natives. Consumers and SMEs just want great banking services at a low cost, all available on a smartphone. And that’s what Arival hopes to provide.