Intel Report Digital Banking - Flipbook - Page 5
The digital banks of the past focused on products and services,
like high-interest savings accounts or budgeting advice. Banks
and financial technology companies founded in the last few
U.S. Digital Banking and Lending
Venture Funding
years focus more on building digital communities based on cus-
300
tomer affinities and ensuring their products and services fit the
250
unique needs of the communities they serve.
200
284
263
$4.0B
$3.8B
$3.8B
2019
2020
140
150
100
Digital Banks and Their Offerings
The influx of investor cash into the space is truly phenomenal.
50
0
Fintech has become a hot sector: One out of five venture dollars
Deal Count
globally went to financial technology companies in the second
2021 YTD
Amount Invested
quarter of 2021, according to the research firm CB Insights.
Dollars raised in the first half of 2021 totaled $58.7 billion,
exceeding the total dollars raised in all of 2020.
In the United States, venture capitalists love banking platforms,
Top U.S. Venture-Backed Banking
and Lending Companies, by Overall
Funds Raised
Name
City
Total Venture
Funding Raised
1 Chime
San Francisco
$1,542,603,117
2 Brex
San Francisco
$857,120,000
3 Circle
Boston
$711,000,000
4 Avant
Chicago
$657,900,814
5 GreenSky
Atlanta
$610,000,000
according to Crunchbase.
6 BlockFi
Jersey City, NJ $508,681,673
More often, venture capital-funded banking platforms aren’t
7 Kabbage
Atlanta
banks at all, but financial technology companies that pay fees to
8 Varo Money San Francisco
$477,400,000
9 MX
Lehi, UT
Technologies
$450,000,000
10 Stash
$426,250,000
too. The banking, personal finance, credit card, commercial and
consumer lending sectors raised $4 billion through July 9, 2021,
more than the amount raised in the full year 2020 or 2019,
according to the research firm Crunchbase. In total, $11.5 billion has been raised since 2019.
Of the top 10 banking and lending platforms that have raised
the most venture capital money in the U.S., almost all are fintechs and only one is a bank (Varo Money). Chime is the No.
1 darling of venture capital, attracting $1.5 billion to date,
banks in exchange for banking services, such as access to payment rails and compliance with banking regulations. But they
look like banks to their customers.
And increasingly, they cater to a specific niche. Using a list of
New York
$488,650,000
digital banks compiled by the Financial Brand and sponsored by
Nymbus, Bank Director discovered that 67% of digital banks
started in 2020 had a niche, up from 43.75% the year before
and the highest percentage to date. The niches focus on a specific segment: small businesses or communities of “creatives,”
Source: Crunchbase. Data as of July 9, 2021, contains
companies on Crunchbase with the industry tags
Banking, Personal Finance, Credit Cards, Commercial Lending, and Consumer Lending.
Venture funding includes seed, venture, corporate
venture, and private equity for venture-backed
companies.
DIGITAL BANKS: PROFITS AND PURPOSE | 3