The management of the digital bank One Zero is holding meetings with potential new investors in an effort to raise tens of millions of dollars. Calcalist has learned that the bank, controlled by Amnon Shashua (63%), is targeting a $60-90 million fundraising round at a valuation of $360 million pre-money and $420-450 million post-money.

The bank’s last funding round took place in December 2021, when it raised $120 million at a valuation of $200 million pre-money and $320 million post-money. Leading investors in that round included Julius Baer, Chinese technology giant Tencent (owner of the WeChat payment app), Japanese financial services corporation SBI, U.S. investment fund West Coast, the Hebrew University Employees Provident Fund, and Singapore’s Far East Ventures.

In October last year, Shashua revealed plans to raise $100 million in new capital. That round did not materialize, and in discussions with institutional investors at the time, the bank’s management argued that the war had prevented foreign investors from making new commitments in Israel.

For the first time, Calcalist has learned, the bank is also meeting with major Israeli institutional investors, including all major insurance companies and investment houses. One insurer, Hachshara, is already invested in the bank, alongside the investment house Yelin Lapidot. This is significant because, under a planned reform expected to be included in the Arrangements Law, insurance companies will be permitted to hold more than 7.5% of a small bank, a threshold that currently applies to holdings in the major banks.

One Zero’s management says it chose to approach institutional investors now because they typically avoid early-stage companies, and the bank has reached what it considers “organizational maturity.”

Insurance companies and investment houses have expressed interest in investing, but at a substantially lower valuation, between $200 million and $250 million. They cite the bank’s accumulated losses and, for the first time, point to the SAFE mechanism granted to Shashua in previous rounds. The mechanism, according to presentations shown to investors, allows him to convert debt he provided to the bank into shares at a valuation 40% lower than the valuation of the next fundraising, a clause revealed here for the first time.

Presentations shared with potential investors show CEO Eyal Gafni projecting that the bank will reach operational breakeven, and even profitability, by the end of 2026. Management reports that the bank now serves 160,000 customers, with continuous revenue growth driven by the monthly addition of thousands of new users. They claim an annual customer growth rate of 50% and a 400% annual increase in securities-portfolio activity. The bank expects to launch several new financial products in the coming year.

One Zero ended 2024 with a loss of NIS 268 million, after losing NIS 357 million in 2023 and NIS 263 million in 2022. According to management presentations, the losses stem from the need to develop the bank’s technological platform, a process they say is now complete, and from the integration of artificial intelligence systems developed by Shashua’s AI21, which the bank claims provide it with significant competitive advantages.

Some customers pay subscription fees; others generate different types of income; some generate no income at all. The founding cohort, customers who joined at the very beginning, is exempt from subscription fees.

Founded in 2019, One Zero has raised $242 million to date, with Shashua personally investing $114 million. The bank’s initial investor was Marius Nacht, who later sold his holdings to Shashua.

The bank struggled under former CEO Gal Bar-Dea, who resigned a year ago, largely due to disagreements over One Zero’s planned expansion into Europe. In 2024, the bank announced a partnership with Generali Bank in Italy. The two sides signed a memorandum of understanding to establish a digital bank in Italy using One Zero’s technology. Under the plan, the joint venture was expected to hire more than 100 employees in Italy, with an initial investment of $40-50 million funded jointly by both companies.

However, in November, One Zero froze the initiative and, despite not publicly acknowledging it, effectively withdrew from the plan.