Digital bank 86400 to be acquired by NAB in $220 million deal

On the 10th September 2019, Australians woke up to a smarter way to bank as neobank 86400 made its first public launch nationwide. Their app is built specifically to allow customers to bank directly from their smartphones, easily stay on top of their finances and feel in control every second of every day. 

 

Shortly after another large neobank Xinja handed back its banking license in late 2020 (after having failed to secure funding throughout the year), 86400 decided that they would be able to do a better job with the support of NAB. NAB, who already holds 18.4% shares of the company in a recent capital raising round, proposed to buy out the remaining shares at the cost of $220 million and take full ownership. 

What’s going to happen next?

The neobank is going to be merged with NAB’s own digital-only proposition U-Bank. This is seen as an important milestone for 86400 as they will be able to propel their business, numbers and balance sheet and at the same time keeping their unique set of values and clear purpose that are fundamental to their success. U-bank will receive great support on the technology side, in order to meet changing customer needs.

"We are looking forward to having the 86400 team join us to help deliver the next generation of simple, fast and mobile banking solutions," UBank CEO Philippa Watson said.

The deal is subject to certain conditions for regulatory approvals by  the Treasurer, the Australian Prudential Regulation Authority (APRA), the Australian Competition and Consumer Commission (ACCC) and The Federal Court. This is expected to be completed by mid-2021. Once the transaction is completed, NAB would combine UBank’s customer base and staff with 86400 team and technology platform. 

This all makes sense as developing a leading digital bank has always been central to NAB’s growth agenda. As part of NAB, they will receive full support and all the opportunity that entails to deliver a more enhanced banking experience for Australian customers. 

Broker or Direct Channel? Or both?

In our 2020: A Year in Review post, written by Dien, this newcomer 86400 will be on every aggregator panel and have an expanded BDM team in 2021. The question posed was “what would happ