French startup Green-Got is building an alternative to your traditional bank account with a focus on climate change. Essentially, Green-Got guarantees that your savings and the money in your bank account will not fund fossil fuel projects and other polluting industries.
The startup recently raised a $5.5 million (€5 million) funding round led by Light blue dot. The Green-Got customer community has contributed nearly €2 million to this funding round. Green-Got succeeded in implementing its equity crowdfunding campaign crowdcube with approximately 1,300 investors.
As a neobank, Green-Got doesn’t want to stand out when it comes to its feature set. Customers can create an account within minutes via the Green-Got mobile app. They receive a current account with a French account number. A few days later they get a debit card.
That card works with Apple Pay and Google Pay. And the startup doesn’t charge any foreign transaction fees on top of Mastercard’s exchange rate. Every time you make a purchase with your card, you will receive a push notification on your phone within seconds.
In other words, Green-Got ticks all the right boxes when it comes to providing the basic banking features. “We offer the best features of Revolut and N26 that have convinced many users, but at the same time you have the best impact funding,” co-founder and CMO Maud Caillaux told me.
What makes Green-Got different is that the startup wants to focus on one vertical in particular – and that is climate. In recent years, different studies have shown that major retail banks invest in multinational energy companies that finance invasive fossil fuel projects. And that’s just the tip of the iceberg, as there are many companies that don’t necessarily work in this industry, but still produce large greenhouse gas emissions.
With Green-Got, customers know for sure that their money will not finance these types of companies. Green-Got is technically not a bank, it is a payment institution that cooperates with a bank (Crédit Mutuel Arkéa). If customers have money in their account, that money is not invested in any way. It just sits there waiting for the next withdrawal.
When it comes to consumer-facing features, Green-Got shows the carbon dioxide equivalent (CO2e) of your ticket purchases, giving you an idea of your personal impact on the environment. For example, if you spend €500 on Air France’s website, it probably means you’ve made a purchase with a major impact on the climate, compared to €500 at a second-hand bike shop.
The startup generates revenue from subscriptions. An account costs €6 per month. There is no free tier as the company prioritizes sustainable growth over growth at all costs. There are currently 13,000 paying customers.
If you are familiar with neobanks, you may know that fintech startups also generate revenue from interchange fees. Each time you pay with your card, the card transaction fee is split between the merchant’s bank, the network provider (e.g. Mastercard) and the customer’s financial institution (in that case Green-Got).
Green-Got does not want to generate income from these fees. That is why the company has selected some non-profit organizations with its customers so that Green-Got can donate based on those interchange fees. “It represents hundreds of thousands of euros,” said Caillaux. The startup will soon also enable payment rounds for donations.
In the future, Green-Got also plans to launch savings accounts in the form of security-vie contracts. The company evaluates and selects all financial products that will contribute to the basket of investments, as certifications are not enough when it comes to funds.
Generali will manage the contracts on behalf of Green-Got. “It’s like we have the recipe for the pie and they have the factories to make the pies,” said Caillaux.
Neobanks have been around for a while and many people are familiar with the concept by now. A few years ago, many entrepreneurs wanted to start a ‘neobank for x’, but that trend ebbed away. Green-Got is a little later on the market, but could also avoid all the pitfalls that come with running a neobank.
In addition to more generalist challenger banks, Green-Got competes with traditional retail banks that try to include climate impact in their priorities, such as the Credit Cooperatif or La nef. It will be interesting to see how big Green-Got will become in the coming years.