LOOT, the digital current account app for UK students, has called in administrators after the Royal Bank of Scotland (RBS) backed out of a potential deal to buy the entire company.
The app-only bank Loot – not to be confused with its namesake Loot.com, the UK's long-running original classified ads marketplace – went into administration on Wednesday after efforts to raise fresh investment failed last week, according to City A.M.
RBS owned a 25% stake in the British fintech firm via an investment by Bó, a digital-only retail bank being developed by RBS's subsidiary NatWest.
The state-owned bank had invested a total of £5 million into Loot since July 2018, but a deal to buy 100% of the company fell through earlier this month.
Loot has now been forced to appoint Smith & Williamson to oversee the administration process before fresh attempts to raise funds can go ahead.
The company was established in 2014 to help students manage their finances and had secured more than 175,000 sign-ups by the beginning of 2019. It is entirely unrelated to the classified advertising publisher Loot.com.
The digital banking start-up had not secured a full banking licence but was able to operate through a partnership with Wirecard, which is regulated by the Financial Conduct Authority under an electronic money licence.
Other investors included Speedinvest, Global Founders Capital and Portage.
Efforts by Loot's founder Ollie Purdue are currently underway to safe-land as many employees as possible, with around 30 job offers already in motion.
RBS declined to comment and Loot.io could not be reached for comment.