Fintech
Meet Cleo, the British fintech using artificial intelligence to get closer to unicorn status
Cleo founder and CEO Barney Hussey-Yeo
Nicola Arber
Suddenly, all eyes are on the UK’s AI activities. This week’s announcement that Wayve, the British self-driving car start-up, has raised $1 billion in Europe’s largest-ever AI deal has focused attention on who might be next . And a name on many people’s radars it is Cleothe financial consultancy firm founded by Barney Hussey-Yeo in 2017.
Ironically, the British themselves may not be familiar with Cleo: while he initially aimed to conquer the UK, Hussey-Yeo quickly realized that the US was a more promising market, at least in the short term. She discontinued service in the UK in 2020 and has since focused exclusively on the US, although a return to home shores is promised this year or in early 2025.
Cleo certainly has things in common with Wayve, including shared investor Balderton Capital, which was an early backer of Cleo and committed significant funds to the company. It is based in London and has implemented proven technology in a rapidly growing market.
In fact, if anything, Cleo is further along the road to commercialization, with around 600,000 paying customers already registered in the US – and more than 10 times as many using free versions of the app. This has seen it praised by analysts such as Sifted, the Financial Times-backed website, which described Cleo as “the only European fintech to make inroads into the US”. Even Forbes itself identified the company as one to watch: Cleo did ours The next billion dollar startup ranking last year.
Today, Hussey-Yeo is determined to build on these early successes. “We want to be the AI service for financial services,” says Hussey-Yeo. “Our ambition is to reach more than 1 billion customers.”
Cleo is essentially a digital assistant that provides users with advice and feedback on how they manage their finances. Using tools like ChatGPT, the assistant speaks to users in natural language. A “roast” feature, for example, mocks users for spending profligately; a “hype” feature encourages them as they make progress. The app can be used for better budget management, to support savings and for broader financial education. More recently, Cleo has also introduced credit products such as cash advances.
“Our view is that in the near future you will have these digital assistants in every part of your life,” Hussey-Yeo explains. “We will be the person you turn to for help with your finances.”
Cleo’s success in the United States paves the way for global expansion, he adds. “The US doesn’t have the same kind of social safety net as the UK, so people needed a lot more help during the Covid pandemic,” she explains. “And we are particularly focused on young people between the ages of 18 and 36, who in the United States are particularly tech-savvy and also more willing to provide access to their data if they feel they are getting something in return.”
In fact, Cleo actually builds on the open banking revolution, which has seen American banks provide access to customer account data – with their permission – to third parties who can then offer other advice and services. Nearly two-thirds of U.S. bank accounts are now connected to at least one fintech.
The rapid advancement of open banking across Europe in recent years, including in the UK, gives Cleo the opportunity to have great success in these markets too. “We have the opportunity to change the way a generation thinks about financial services,” says Hussey-Yeo, underlining the need to improve the low levels of financial literacy that characterize many European markets.
AI tools offer the potential to do this at scale, Cleo believes, particularly after the very rapid acceleration of generative AI and large language models over the past two years. “The technology really works for this application,” says Hussey-Yeo. “You can get great results from these models.”
To date, Cleo has raised just under $140 million, including an $80 million round that closed in July 2022, led by Sofina Capital. This helped increase the company’s workforce to over 200.
The most recent raise valued the company at around $500 million – not bad for a British company that most Britons will never have heard of. But the next relaunch could see Cleo achieve unicorn status. For now, however, Hussey-Yeo says he has no plans to return to investors: the company’s cash-generating business model clearly provides Cleo with extended runway. In fact, the company is one step away from profitability, he says.