Dutch challenger bank bunq has acquired Irish business specialist lender Capitalflow for an undisclosed sum.

The move comes after bunq raised a total of €193m in a deal with British private equity firm Pollen Street Capital.

The investment round increased the Dutch challenger’s valuation to €1.6bn.

Established in 2016, Capitalflow lends to SMEs operating across various industry verticals in Ireland. The company employs around 60 people and has lent more than €650m to date.

The completion of the Capitalflow acquisition is subject to Dutch National Bank approval.

In a blog posted on the company website, Capitalflow said: “Capitalflow has always been about offering choice to Irish Business Customers, and giving ease of access to finance, plus the freedom for customers to choose what best fits their business needs.

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“This acquisition is an extremely exciting step on the Capitalflow journey, as it will enable us to grow the competitiveness and value of our future Irish Business finance services and products.”

There will be no change or interruption to its services, the post added.

About bunq:

bunq was founded in 2012. Currently, it is available in 30 European markets. The challenger recently reported its first-ever profitable month as it aims to break even on a monthly basis before year end.

The acquisition of Capitalflow is part of its business growth strategy. It will use the fresh proceeds to further expand through Europe and fuel its M&A strategy.

Bunq founder and CEO Ali Niknam said: “bunq was founded to challenge what banking is and can do. By putting our users first we have created a bank that is super focussed to make life easy in a sustainable way.

“We’re extremely excited to join forces with Pollen Street Capital to further expand the bank of The Free throughout Europe.”

Last year, bunq launched joint banking services.