The neobank had been working on finalising a USD 433 million investment deal from Dubai’s World Investment Group. The fintech will give clients 7 days’ notice before closing high-interest accounts. Xinja also announced that accounts will not be earning any interest, effective immediately. The company also plans to suspend cards and payment facilities beginning 15 January 2021.
Xinja’s management stated that the COVID-19 pandemic has negatively affected its operations. It has been quite challenging for the bank to secure capital during these unprecedented times, the company claims. That is why Xinja’s management decided to exit the banking sector and confirmed that they will now focus on their US-based share trading platform.
The digital bank was mainly intended for Millennials or young investors. Xinja had planned to offer high-interest deposit accounts and it had also announced that it would provide glow-in-the-dark bank cards. However, the bank was not able to introduce any loan products to make up for its excessive cash burn.
Xinja had secured funding via several equity rounds in 2020 as well as crowdfunding in 2019. The funds had been raised to ensure that the bank didn’t have to lay off staff members while also safeguarding the fintech firm’s balance sheet.
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