The trendy investment app Bux, boasting around half a million young users, has been navigating choppy waters and is now finding a new home with ABN Amro.
Bux is a user-friendly app modeled after the wildly popular Robin Hood in the US. Operating across multiple European countries including the Netherlands, Germany, Spain, France, and more, it has garnered a substantial customer base.
Rapid Growth
Bux experienced rapid growth, but revenue failed to keep pace. In 2022, Bux reported a loss of 16 million euros, compared to 17.7 million euros the year before. Due to challenging economic conditions, customer growth stalled, and trading activities diminished significantly.
Earlier this year, Bux revamped its business model. Previously, customers paid a nominal fee per order, but now Bux partly operates on a subscription basis. Despite these changes, revenue continued to lag, and losses deepened. In October, news broke that Bux had to undergo significant restructuring to stay afloat, resulting in nearly half of its staff being laid off.
Acquisition Battle
Given its turbulent performance, Bux became a target for various entities. Negotiations were ongoing for a while with the neobank N26, but those talks fell through at the last minute. Subsequently, ABN Amro entered the scene, seeing potential in Bux and extending a lifeline to the investment app. A complete acquisition is in the works pending approval from regulators, with no disclosed acquisition price.
For ABN Amro, the ability of Bux to attract young customers to start investing is a considerable asset. It’s a demographic that traditional banks find challenging to reach. However, as these customers mature, they’ll likely require more specialized advice. By acquiring Bux, ABN Amro hopes to cater to this demographic later with additional investment services. Moreover, Bux presents opportunities for ABN Amro to expand further across Europe.
Cryptocurrency
ABN Amro clarifies that the acquisition does not cover Bux’s cryptocurrency activities. On the Bux platform, customers can purchase cryptocurrencies, an area currently off-limits for major banks, which prefer to steer clear of it. The fate of Bux’s crypto division remains uncertain. There’s a possibility it might be transferred to a crypto exchange. Read more about buying cryptocurrency.
Approximately a quarter of Bux’s customers invest in cryptocurrencies. By divesting the crypto division, there might be an exodus of customers from the platform. Even at Bux, they acknowledge that cryptocurrencies are a draw for younger audiences. However, they believe discontinuing this service won’t significantly impact their customer base.
