When the fintech startup Lunar Way launched one and a half years ago their ambition was to have 270,000 Nordic customers by the end of 2017. Today, they have 12,000. The CEO admits that the start has been more difficult than expected, but they think the startup now has finally found the product which can lead to world domination.

When Lunar Way launched their banking app in May of last year, they weren’t lacking in grand ambitions. They sought to challenge the established industry.

They predicted to land 85,000 users by the end of the year. By the end of 2017 that number should have been more than tripled to 270,000 across the Nordics. But it didn’t go that fast.

Today, the neo-banking app has 12,000 users. And is only available in Denmark.

”You’re enthusiastic when you start. But we’ve had to downgrade our ambitions a bit, and we are nine months behind on our Swedish roll-out. Creating a financial service with financial authorities, partner banks and so on across borders – it’s a bit harder than you’d expect,” says Ken Villum Klausen, founder and CEO of Lunar Way.

The startup from Aarhus spent more than 13 months getting everything in place in Denmark before the launch. And before they can penetrate the rest of the Nordic, they must team up with partner banks and get synced with financial authorities all over again. After all it’s their users’ money they handle.

”You have to respect that authorities are for protecting the consumers. In defence of the authorities, it feels like 1000 new fintech startups have launched in one day, and they have to relate to them all. So overall, it hasn’t been an obstruction. Our plan holds long term, we’re still reaching 100 new customers every day, so it’s moving in the right direction, but we must get the wheels spinning faster,” he says.

Out of ”The trough of sorrow”

Lunar Way was close to bankruptcy before they landed the investment in May this year. But Ken Villum believes that the startup has now left the trough of sorrow and is closing in on to the product their young customers want – a product/market fit.

”In the preliminary phase, we appeal to the young segment because our offering is relatively simple. You can’t buy a house by having multiple accounts with us, but we fulfil the simple needs,” Villum Klausen says.

The solution is simple, but with a combination of cool marketing and continuous deployment of new, transparent and user-friendly features, they’ve reached a userbase with an average age of just 24 years. And a solid share of the users is using Lunar Way as their main way of banking.

”Through our partner bank Nykredit, which is our license holder, we offer our users an account that is synced with all your money streams; from paychecks to tax – in Denmark known as a “Nemkonto”-account. And we see about a third of our users have this Nemkonto. At the same time, we see, that users start using LunarWay more and more, and we have the best rating in our category on Trustpilot in Denmark,” Villum Klausen says.

Still wants to challenge the established industry

The user experience is the first area where Lunar Way wants to challenge the established industry.

”The customer experience provided by the regular banks is horrible, and customer satisfaction is decreasing drastically. Transactions are transactions, but the experience is a big difference. Across everything we do from onboarding to unboxing the customer experience must be different from what we know from the regular banks,” Villum Klausen says.

Even though the well-established bank Nykredit is lending their banking license to Lunar Way, Ken Villum Klausen sees Lunar Way in opposition to the established industry. Even if they haven’t delivered any revolutions yet.

“It takes a lot of time to get the fundamentals in place, so for now there isn’t any disruption in our features. But the user experience is better. When the foundation is in place we must start showing some serious innovation. The Travelcard is one of the first proofs,” he says.

The Travelcard is a credit card for travelling that Lunar Way is offering in cooperation with a British supplier, which makes a withdrawal and paying around the world free of charge for 299 DKK a year.

While the card isn’t disrupting the way we pay, it’s an example of the different thinking Lunar Way is doing: The startups don’t want to own its infrastructure like the traditional banks but it is instead cooperation with the suppliers they want. They want to tie together the best solutions from different suppliers and wrap it into a nice user experience.

No exit planed

Creating a nice piece of software on top of the bank’s infrastructure and pushing it through sleek marketing – the entire construction sounds like something we’ve seen in the Telecommunications industry – most recently with Plenti. That is if the grand exit follows in a couple of years when Lunar Way has gathered enough users.

With Ken Villum Klausen’s background in Wallmob, which he sold for a couple hundred million Danish kroner after a few years in the market, one is tempted to think that this is exactly Lunar Ways plan. But he assures that is not the case.

”It’s obvious how some might think exit when they compare us to telecommunications companies – but that’s where the similarities stop. It’s speculation to think that banks just want to buy us – unlike the telecommunications industry there’s no law stating, that the banks have to give us access to their banking license,” Villum Klausen explains.

He says he doesn’t plan to leave the startup anytime soon and could see himself in charge of Lunar Way ten years from now. Because the ambition is to create a new way to run a large bank.

”The opportunities have rarely been bigger. We have the opportunities to create something that’s remarkably different. We don’t just want to be a niche for young people; we want to create a large, cross-border neo-bank in the Nordics – we want to become a factor. It takes time, but that’s the goal.”