Meet my financial friend — why we invested in AI assistant Cleo

Cleo screenshots

Cleo, the AI banking assistant we first invested in at seed in 2017, has just raised an additional $10m. We couldn’t be more delighted to welcome Balderton Capital, which is leading Cleo’s series A, as an investor.

Cleo is a banking chatbot, powered by Artificial Intelligence. It’s ridiculously engaging (with usage stats to match), and its tone of voice — wry, funny and full of personality — is something special. Cleo is your sensible, super-smart friend, who knows how things work and helps you manage your finances and spending habits through the Facebook Messenger channel. She can also tell you if you are paying more than the average customer for services like electricity and recommend providers to switch to for a better deal, help you save or give to charity, with other other services to come. Fundamentally, we fell in love with Cleo as a product. Try it here and let us know what you think.

Barney, Cleo’s dynamic CEO, is an ex data-scientist and is a graduate of Entrepreneur First. When we first started talking, the scale of his ambition was clear. The Cleo team are hugely hungry about where they want to take Cleo and rightly so since there is so much dissatisfaction with traditional banks and banking products, particularly amongst younger people.

Making sense of the financial picture

Personal debt is growing, according to official figures, and millennials in particular are more likely to go into their overdraft regularly, often without realising they have or what it costs them. More than a quarter of 24–35 year olds rely on credit cards and overdrafts for everyday spending, according to the Financial Conduct Authority.

Barney recognised that one cause of this problem was the inability to see exactly what was happening with your money, all in one place. He argues that if our finances are transparent, then managing spending will be, if not quite a cinch, easier.

Almost half of UK consumers have more than one bank account, the average number of credit cards per person is 1.7, and while individuals used look to their banks for all their financial needs, best in class providers for different financial services are emerging, e.g. Trussle or Habito for mortgages, TransferWise for FX. The regulatory backdrop is also changing. Open Banking is here and the Second Payments Directive Service (PSD2) is accelerating big industry shifts. There is a rising niche of products and technologies offering consumers very specific banking products or financial services.

This makes it even more likely that users will want to minimise the interfaces they use for dealing with their finances. By providing a platform aggregating your financial life, and allowing you to interrogate it, Cleo helps users make sense of their financial picture.

Rapid growth

Cleo has grown quickly in the UK and quietly launched in the US this spring, where it now has 350,000 users with 30,000 people a week signing up. Such brisk take-up suggests that Cleo has the potential to become the default banking interface for a generation. It’s really relevant to the “now” generation and we are so excited about their potential to become one of the world’s biggest fintech companies.

Banking has traditionally been a local, or at least national, business, because it relies on trust. But Cleo demonstrates that if you get the technology and tone right, then this is a model that is truly scalable. And because Cleo is not actually a bank, it is able to scale rapidly because it has no huge capital requirements or regulatory constraints.

The Cleo team are an exciting journey and we’re thrilled to be along for the next stage of their growth.