Germany-based Neobank Ruuky Files for Bankruptcy

The German neobank Ruuky announced it has filed for bankruptcy after less than three years in operation.

In a LinkedIn post Monday (Jan. 9), the Hamburg-based FinTech said the decision comes after the company experienced incredible growth, amassed a loyal customer base, and became the largest Neobank on social media in Europe.

"We are living in challenging times, and despite our best efforts, we were unable to overcome the market dynamics to raise additional funding," the notice said. "This decision to file for insolvency was not taken lightly and breaks our hearts."

The decision to file for insolvency came after Ruuky failed to secure fresh funding from either new or existing investors. According to Crunchbase, around 4 million euros in Venture Capital (VC) has been invested in the neobank by Cavalry Venture and Vorwerk Ventures.

While the company has said all customer funds are secured noting that users will still be able to access the app while the firm winds down.

Ruuky's basic proposition is a digital banking and savings app for teenagers. But while the firm stated in the LinkedIn post that it has "amassed a loyal customer base," that has not been enough to stave off trouble in a difficult funding environment.

"We have not been able to raise new capital in the current market environment," the startup's co-founder and CEO, Jes Hennig said to Business Insider. "We have to accept that the market conditions for capital-intensive startups have changed," he added.