10 December 2016
Visit aciworldwide.com

Lending startups dominate digital banking funding scene

07 January 2016  |  11843 views  |  3 cash

Lending firms dominate the fintech funding scene, pulling in nearly two thirds of all investment in digital banking startups in 2015, according to CB Insights.

Since 2010, digital banking startups around the world have received over $10.3 billion in funding, says CB Insights.

Of the four broad categories identified by the firm - lending, banking/personal finance, investment management, and bill payment/money transfer - lending has constantly attracted the most investment but has seen its popularity soar in the last two years.



In 2015 mega deals such as SoFi’s $1 billion Series E and Lufax’s $485 million round saw lending startups pull in 63% of all digital banking investment dollars, up from 43% in 2010 and nearly three times more than any other category. Lending also accounted for half of all deal activity during the year.

By contrast, the dollar share for bill pay and money transfer startups has dropped from 43% in 2011 to just 24% in 2015. Investment management startups have also seen a drop off in funding, from a 22% dollar share in 2013 to just eight per cent last year, while banking and personal finance outfits continue to attract the smallest share of money, just five per cent in 2015.

Comments: (3)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune | 08 January, 2016, 12:30

This totally reflects the degree of independence from banking rails and, thereby, disruption potential, of the various fintech segments. As for banking and personal finance, it's amazing how this segment even managed to attract 5% of investments, given that it comprises merely of good old banks that show up via snazzy mobile apps.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Balasubramaniam Gd
Balasubramaniam Gd - DBS - singapore | 12 January, 2016, 01:45

i am not being conservative nor am i being pessimitic as a risk manager what is the nature of alignment risk managers need to get ready for in risk assessments for these enviornments, finally anything goes kaput the blame will finally rest with the risk teams given the parable that finally the loss goes to the business and not the bonus.  I would really lke to see and hear   your thoughts on this very fast rapidly moving space, in an aim to stay relevant in this domain.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Hitesh Thakkar
Hitesh Thakkar - FIS Payments Software and Services India - India | 26 January, 2016, 10:56

Mr Balasubramaniam, I can share some insights based on my interactions with few P2P lendeing startups.

Lending space has been in High Risk area where in new enterents have found new risk management criterias to create risk profile and ranking. P2P Lending is happening with various models such as bill payment patterns of high risk ( Propsect for Telecom led payments bank and players), building risk score as function of existing debt, income sources and prospects.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Global fintech investment booms as banks jump in

Global fintech investment booms as banks jump in

15 December 2015  |  15068 views  |  0 comments | 42 tweets | 17 linkedin
JPMorgan partners OnDeck on small biz lending

JPMorgan partners OnDeck on small biz lending

02 December 2015  |  4580 views  |  0 comments | 9 tweets | 3 linkedin
Fintech investment in Asia-Pacific quadruples in 2015

Fintech investment in Asia-Pacific quadruples in 2015

04 November 2015  |  8580 views  |  0 comments | 24 tweets | 36 linkedin
Fintech to bridge $2 trillion SME funding gap - World Economic Forum

Fintech to bridge $2 trillion SME funding gap - World Economic Forum

27 October 2015  |  11445 views  |  0 comments | 25 tweets | 22 linkedin
Three big banks join $135 million Kabbage funding round

Three big banks join $135 million Kabbage funding round

14 October 2015  |  6399 views  |  0 comments | 18 tweets | 11 linkedin
London fintech investment in first three quarters surpasses 2014 total

London fintech investment in first three quarters surpasses 2014 total

08 October 2015  |  9966 views  |  0 comments | 31 tweets | 21 linkedin
Payments firm Adyen scores funding at $2.3bn valuation

Payments firm Adyen scores funding at $2.3bn valuation

30 September 2015  |  8044 views  |  0 comments | 16 tweets | 14 linkedin

Related blogs

Create a blog about this story (membership required)
Find out moreFind out morehttp://www.financialcrimerisk.fiserv.com/aml?r=finextra

Top topics

Most viewed Most shared
China tops world fintech rankingsChina tops world fintech rankings
8618 views comments | 39 tweets | 31 linkedin
EBA bends under weight of PSD2 mandatesEBA bends under weight of PSD2 mandates
8262 views comments | 37 tweets | 48 linkedin
Guesswork alone can crack Visa card security - Newcastle UniversityGuesswork alone can crack Visa card securi...
8050 views 12 comments | 15 tweets | 27 linkedin
PSD2 will transform the payments landscapePSD2 will transform the payments landscape
7212 views comments | 24 tweets | 13 linkedin
Fed Governor sounds warning on alternative credit scoring dataFed Governor sounds warning on alternative...
6869 views comments | 20 tweets | 24 linkedin

Featured job

to Six-Figure Base, Commission, Benefits
London, UK

Find your next job