Israel’s first new bank in more than 40 years, the First Digital Bank (FDB), has raised a $ 120 million Series A funding round led by a group of leading investors such as the tech conglomerate Chinese Tencent, Japanese financial firm SBI Holdings and Swiss wealth management firm Julius Baer, ​​one of Switzerland’s oldest banking institutions, the bank said on Tuesday.

The investment values ​​First Digital Bank at $ 320 million, according to the announcement.

The all-digital bank, founded by tech entrepreneur Amnon Shashua, also founder of autonomous driving systems company Mobileye (a subsidiary of Intel), was approved by the Bank of Israel in 2019 and is currently operating in pilot mode , offering banking services to employees and their families. The bank said it expects a soft launch, or limited launch, to the Israeli public early next year and future expansion into other international markets.

The bank has around 60,000 people on its waiting list and currently employs more than 200 mission-driven people, CEO Gal Bar Dea told The Times of Israel on Tuesday.

The First Digital Bank is an independent bank that hopes to compete with the five largest banking groups in the country, which today hold some 98% of the market. In 2019, she was the first to receive a banking license in Israel for over 43 years.

The bank will not have a branch and will operate by integrating human bankers – who provide 24-hour customer service through online chat and a call center – with advanced artificial intelligence-based technology that aims to create personalized service experiences for customers. It will offer all existing banking services, including personal accounts, joint accounts, loans, deposits, credit cards, stocks, guarantees, standing orders and foreign currencies. Mortgages will be added to the list of offers in the future.

First Digital Bank said it hopes to “lead the autonomous banking transformation” by using “proprietary AI tools and technologies” to provide households “with a private banking service experience designed to proactively support their financial challenges. everyday – from cash flow to budgeting, to credit, to savings. , investments and more, saving them time, money and financial stress.

From left to right: Gal Bar Dea, CEO of First Digital Bank, Founder Amnon Shashua and Chairman Shuki Oren. (Yanai Yechiel and Yonatan Hefner)

“Netflix killed Blockbuster, Spotify disrupted the music industry and Tesla left Ford and Mitsubishi behind in a trail of dust,” Bar Dea said in May. The banking sector is one of the few that has yet to experience a major revolution, he said, and the new bank is offering a “new model” of banking.

Bar Dea is one of the founders of Pepper, the digital banking company of the Leumi Group. The president of the new bank is Shouky Oren, who was the general accountant of the Ministry of Finance in 2007-2011. Oren was also previously CEO of Bank Leumi Suisse and CEO of real estate company Kardan NV.

“FDB is now partnering with very reputable and financially sound global investors. Our new investors will strengthen FDB’s resilience, allowing us to offer consumers a real alternative to traditional banks in the market. We are excited about the immense impact this could have on Israeli households and look forward to working with our new investors to reach additional markets, ”Bar Dea said in a statement Tuesday.

Shashua said the new investment was a “vote of confidence in our vision by world leaders in technology and finance, [and] feeds into our long-term strategic plans to transform the banking world, first in Israel, then globally.

Professor Amnon Shashua, senior vice president of Intel and president and CEO of Mobileye, stands with an autonomous vehicle from Mobileye’s autonomous test fleet, during an event at the Nasdaq in New York in 2021 (Mobileye, an Intel company)

“I firmly believe that AI technology, which is transforming important parts of our lives today, can be the key to solving the financial difficulties facing so many families around the world,” he added.

Shashua had invested $ 65 million of his own capital in the initiative. Tech entrepreneur Marius Nacht, co-founder of cybersecurity firm Check Point Software Technologies and founder of aMoon Fund, which invests in healthcare technology, was also co-founder of the bank but left the company l ‘last year.

Shashua also participated in the bank’s Series A investment, announced on Tuesday, and will remain the bank’s majority shareholder.

Other investors in the current round included US private equity firm West Coast Equity Partners, the Hebrew University of Jerusalem Provident Fund, and Far East Ventures, the venture capital arm of Singapore’s Far East Organization. .

The Israeli banking sector is undergoing a major reform that will pave the way for new financial services for clients at more competitive rates.

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