TreeCard Secures $5.1 Million Seed Funding for Wooden Spending Card and Reforestation Initiative

TreeCard, a fintech company based in the U.K. currently preparing for launch, has successfully raised $5.1 million in seed funding. The company is developing a unique spending card constructed from wood, coupled with a commitment to fund reforestation efforts through the interchange fees accumulated from transactions.

Investment Details and Backers

EQT Ventures spearheaded the funding round, with additional participation from Seedcamp and Episode 1. A number of angel investors have also contributed to this seed round.

Notable angel investors include Matt Robinson, the founder of GoCardless; Paul Forster, who founded Indeed; and Charlie Delingpole, founder of ComplyAdvantage. The newly acquired capital will be allocated towards expanding the team, facilitating the product’s rollout throughout the U.K., and initiating expansion into the U.S. and select “key European markets”.

Company Vision and Founding

TreeCard aspires to establish itself as a “leading green finance brand”. The company was founded in August 2020 by Jamie Cox, a Thiel fellow and previously a co-founder of Cashew, alongside Gary Wu and James Dugan.

The founding team conceived the idea of exchanging traditional loyalty points or cashback rewards for tree planting initiatives, aiming to create a fintech offering with a significant positive societal impact.

How TreeCard Works

Upon registration, users connect the TreeCard application to their existing bank accounts. This allows them to direct their spending through the TreeCard, which is powered by Mastercard.

A portion of the transaction fees generated by purchases made with the TreeCard is then dedicated to supporting tree planting projects managed by Ecosia, a green search engine that also served as a pre-seed investor in TreeCard.

CEO's Perspective on Climate Change and Finance

“At a high level, the climate crisis represents the most significant existential threat humanity has confronted in the last 200,000 years; we firmly believe that influencing the direction of consumer finances is the most effective means of driving change,” states CEO Jamie Cox.

“We are developing a financial institution that empowers consumers not only to minimize harm with their spending but also to actively contribute to improving the world. Our goal is to provide a free spending card that promotes more responsible financial habits.

“The card leverages interchange fees to fund reforestation as users spend, and employs sophisticated analytics to help them recognize both beneficial and detrimental spending patterns.”

Sustainability and Revenue Model

Interchange fees for consumer cards are notably lower in the U.K. and EU compared to the U.S. The costs associated with offering a spending card and associated account are considerable, raising questions about the long-term sustainability of TreeCard’s revenue model based solely on interchange fees.

Consequently, the U.S. market, with its higher generated fees, is identified as a crucial launch location for the startup.

Expansion Strategy and Partnerships

“Interchange fees in the U.S. are substantially higher than in the EU, providing a sufficient revenue stream to support our reforestation investments and cover marketing and administrative expenses,” Cox clarifies.

“Within the EU, we are establishing a partnership with an existing retail bank that will provide our complete banking infrastructure at no cost. This arrangement will ensure that, despite a lower percentage of interchange fees, we can adequately cover our operational costs in the EU. We will be announcing the bank’s name in the near future.”

Relationship with Ecosia

TreeCard’s founder describes early backer Ecosia as its “mother” company. “They are our closest partner, and we will collaborate closely with them as we grow,” Cox explains.

“They made the initial investment in the company and will be responsible for all of our tree planting activities. Ecosia’s marketing team possesses extensive experience and will assist us in utilizing their search engine as a primary channel for user acquisition over the coming years.”

EQT Ventures' Perspective

Tom Mendoza, deal partner at EQT Ventures, comments: “TreeCard possesses the potential to become a leading green finance brand, pioneering a new approach to impactful financial management. At EQT Ventures, we are increasingly focused on environmental considerations and the impact of our investments on the world.

“We are therefore very enthusiastic to support the TreeCard team, who are proactively working within the financial system to create a more sustainable future for the planet.”