Xinja

Xinja was an Australian fintech company that operated as a neobank, founded in 2017 by CEO Eric Wilson and co-founder Van Le. Wilson, with a career in traditional banking, was inspired by his father-in-law's experience as a community-focused bank manager and aimed to restore trust in banking. The company set out to challenge Australia's established banks by offering a mobile-only banking experience without physical branches or legacy IT systems.

Xinja's strategy was centered on attracting millennials by providing a superior customer experience and competitive rates. The company initially launched a prepaid card and a money management app to test its processes before obtaining a full, unrestricted banking license from the Australian Prudential Regulation Authority (APRA) in September 2019. In January 2020, Xinja launched its transaction and high-interest savings account called "Stash". The Stash account was highly successful, offering a market-leading 2.25% interest rate, which attracted over $200 million in deposits within the first month.

The business model relied on attracting a large deposit base first and then introducing revenue-generating loan products. However, this strategy proved to be its undoing. The company was rapidly burning through capital by paying high interest on deposits without any corresponding revenue from lending, as it failed to launch its credit products. An announced A$433 million investment from Dubai-based World Investments, which was crucial for its sustainability, ultimately fell through due to complications attributed to the COVID-19 pandemic and issues discovered with Xinja's technology architecture. Faced with mounting losses, high operating costs, and the inability to secure necessary capital, Xinja announced in December 2020 that it would return all customer deposits, surrender its banking license, and cease its banking operations. The company successfully returned all deposits to its 37,000 customers but planned to pivot back to a fintech focus, potentially on a US share trading platform.

Keywords: neobank, digital banking, fintech, deposit accounts, banking license, Australian banking, Eric Wilson, mobile banking, startup failure, capital raising