Investment into digital-only banks or “challenger banks” from venture capital firms this year is at $2.5 billion, already surpassing 2018’s record total of $2.3 billion.
The increased interest in digital-only banks comes at a time when VCs curbed dealmaking efforts in fintech overall during the second quarter of 2019.
A big selling point for challenger banks has been their large customer base compared to other fintechs.
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Venture capitalists are falling in love with the idea of taking down some of Wall Street’s biggest players.
Digital-only banks, also known as challenger or neo banks, are quickly becoming the latest big bet amongst VCs, who see the threat they pose to traditional banks as a good investment opportunity.
Year-to-date funding for challenger banks has already surpassed 2018’s record of $2.3 billion, according to a new report on fintech investing from CB Insights. Through July, digital banks have raised approximately $2.5 billion across 55 deals.
Interest in digital banks from VCs comes at a time when the number of fintech deals in the second quarter (367) dropped to the lowest its been since the fourth quarter of 2016 (329). The slip represents a 23% decrease in the number of …read more
Source:: Businessinsider – Finance