Gen Z finance advisor Cleo raises £66m in Series C funding

Cleo, a digital assistant that provides personalised financial support for Generation Z, has raised $80m (£65.8m) at a $500m valuation to “double-down” on its US expansion.

Founded in 2016, Cleo says that millions of young people have used its chatbot to manage their finances.

The London-based fintech said it will use the capital to expand its headcount from 140 to over 220 – bucking the trend of recent tech layoffs by companies including Klarna, Coinbase and others.

The round also bucks the trend of slowing later-stage investment amid rising inflation and a gloomy macroeconomic outlook that has made investors more cautious when writing larger cheques.

When Cleo raised its Series B funding in December 2020, it said the US had become its largest market. It now says it has annual recurring revenue of $30m and 3x year-on-year growth across the Atlantic.

The fintech offers a subscription tier and says that over half of users opt for this model within a year.

“The vast majority of Gen Zers in the US are living from paycheque to paycheque,” said Barnaby Hussey-Yeo, Founder and CEO of Cleo. “It’s harder than ever for them to get ahead – particularly as the price of everything continues to increase – and yet this audience continues to be neglected, or worse, exploited, by the traditional financial services industry.”

Hussey-Yeo added: “Our latest raise enables us to double-down on our US presence and focus on delivering deeper engagement so that we can better support our customers through the difficult days ahead.”

The Series C funding round was led by Belgium-based investment company Sofina. Additional capital from existing investors, including EQT Ventures & Balderton Capital.

Harold Boël, CEO at Sofina, said: “Cleo‘s mission of bringing fintech-enabled personal financial empowerment to many people worldwide resonates with our own. We were impressed by the drive and the talent of the team and look forward to our partnership.”