Prepaid payments platform Recharge raises €45M to go on M&A spree

With inflation still stubbornly higher than in previous years, and the siren call of subscription services like Netflix and Spotify continuing to beckon, consumers have understandably turned to alternative payments to manage their household bills. As a result, online prepaid payment platforms have benefited.

That bet is being laid by today RechargeA major European player in online prepaid payments, which secured a €45 million debt facility with ABN AMRO to roll up the market with M&A, as well as move into fintech-style services that could eventually compete with some. Major payment platforms.

With digital vouchers from brands including Apple, Google, Spotify, Xbox and PlayStation as well as cross-border remittances, Recharge is attacking the market from various consumer angles.

It said it already has strong cash reserves and claims annual revenue growth of 30% in 2024, with a target to reach more than €100 million in revenue in 2025.

With the new funding, there will be a substantial war chest for acquisitions.

In an interview with TechCrunch Recharge CEO, Günther Vogelpoel said: “We see an opportunity for rapid growth through M&A and many opportunities in other markets and segments that we can consolidate, especially since this industry is still very young.”

Prepaid card market in Europe to grow at a CAGR of 7.6% during 2019-2023. That is between 2024 and 2028 expected To record a CAGR of 9.1%, growing from $251 billion in 2023 to $395 billion by 2028.

More interestingly, Recharge’s application to Dutch authorities for an e-money license suggests it plans to build a more robust ‘fintech’ style platform.

Vogelpoel said that Recharge is “very keen” to develop into the financial services space: “We are in the process of applying for an e-money license in the Netherlands, which will give us a license for Europe. With this, we can launch our own financial services. .” He added that they would be in the market for a wallet-like or card-type company “that would fit with our current customer base.”

But what about the technical side of this next phase?: “We are a profitable company,” says Vogelpoel “We have over 30% growth in 2024 which has also boosted our profitability. So we have money in the bank to invest in our platform and technology.”

It also makes sense for consumers to hold larger funds, he said: “If you have a wallet as a central product, you can connect other services to that wallet as well as payments or cards that people can use to issue virtual cards… Neo Banks services There is a really good portfolio, but we, in particular, cater to the needs of our customers who like to budget, control and also have privacy and security.”

It’s those privacy and security aspects that he thinks could give Recharge an edge, going forward, as pre-payments often offer more privacy with some services.

In a statement, Bas Janssen, senior banker digital and consumer clients, ABN AMRO said: “We see great promise in Recharge’s growth trajectory as they expand their reach into the global prepaid payments space.”

2021 on recharge in the past Raised €10 million ($11.8 million) in debt funding led by London-based Creos Capital and €22 million from Prime Ventures in 2019.