Toss operator Viva Republica is planning to establish an internet bank based on the Global Challenger Bank model.
Challenger Bank emerged as a center in the UK in 2009. It was started with a sense of concern regarding the existing structure that just centered on large financial institutions. This type of bank is optimized for mobile and digital environments, specializing in niche areas not fully provided by existing banking services, with a focus on financial market innovation rather than short-term profitability.
“We have decided to go beyond the existing Internet banking model to implement the model that financial consumers need most now, while also working with the best shareholders who can actually join this goal to achieve success together,” an official from Viva Republica said. “We want to focus particularly on private customers and small business (SOHO) customers, who have been marginalized in the traditional financial sector with the aim of providing optimal financial services to those who are financially alienated.”
To realize this model of Toss Bank in Korea, Altos Ventures, a Silicon Valley-based VC and an investor in a number of unicorn corporate investors, Goodwater Capital, an investor of Challenger Bank Monzo, Nubank, which is making a splash in Brazil, and Ribbit Capital, a British FinTech company that recently acquired a banking license, will participate as shareholders. Other global certification services Cosmotown Korea and Korea’s largest online fashion platform MUSINSA have decided to participate as shareholders, while other participating companies are currently under discussion. Although the real estate information platform Zigbang directly does not participate as a shareholder, it has worked closely with Toss Bank through its business tie-up and signed an official MOU.
Toss will lead the Toss Bank consortium as a major shareholder by securing a 67 percent stake in the status of a financial player, while Altos Ventures, Goodwater Capital and Ribbit Capital will participate with 9 percent each, 4 percent for Cosmotown Korea, and 2 percent for MUSINSA. After applying for preliminary approval, Toss plans to strengthen its stake in the long term.
“The goal of Toss is not to create another internet bank, but to make a big impact on the market and make a difference,” said Lee Seung-gun, CEO of Toss. “As Toss has demonstrated over the past four years, we will approach the existing industry in a completely new light to create a bank that not only completely changes the financial market in the long run, but puts customer experience and trust first.”
