With the rapid development of financial technology (fintech), more and more fintech companies have received investment from top investment banks in recent years. Investment banks have been actively embracing fintech innovation and investing heavily in this emerging field. This article will provide a review of the major fintech investment banks in 2020.
Goldman Sachs leads in fintech investment
Goldman Sachs has been one of the most active traditional investment banks in the fintech space. It invested over $1 billion in fintech startups in 2020 alone. Some of its major fintech investments include leading robo-advisor Betterment, cryptocurrency custody provider BitGo, and neobank Deserve. Goldman Sachs has also led funding rounds for many other fintech unicorns like Stripe, Revolut, and Marqeta. Its fintech investments span across lending, payments, wealth management, cryptocurrency, and more.
Morgan Stanley ramps up fintech investments
Morgan Stanley has also significantly increased its fintech investments in recent years. It participated in a $100 million funding round for Brazilian fintech startup Creditas in 2020. Other notable Morgan Stanley fintech investments include large checks written for companies like Betterment, CloudPay, and SecFi. Morgan Stanley has also been acquiring fintech startups directly, like E*Trade and Eaton Vance. Its fintech M&A strategy focuses on enhancing capabilities in wealth management technology.
JPMorgan Chase targets payments and blockchain fintech
JPMorgan Chase has prioritized investments in payments and blockchain fintech startups. In 2020, it acquired payment processing startup Vasty to enhance its merchant services capabilities. It also led a $15 million funding round for blockchain analytics startup Chainalysis. Other JPMorgan Chase fintech investments includerounds led for startups like Taxfix, Whyline, and BillGO. The bank has also developed its own fintech products in-house, like its Liink payment network and JPM Coin cryptocurrency.
Citigroup invests in consumer fintech startups
Citigroup has focused its fintech investments on startups developing new consumer finance products and services. In 2020, it invested in options trading app Public and student loan fintech College Ave. Other Citigroup fintech portfolio companies include digital banking platform Alkami and corporate travel booking platform TripActions. The bank has also launched its own digital consumer banking arm called Citigold that competes directly with fintech challengers.
BofA participates in late-stage fintech funding rounds
Bank of America has favored later stage fintech investments in relatively mature companies, rather than early stage startups. In 2020, it joined funding rounds for payments processor Stripe and wealth management platform Personal Capital. Other major fintech firms BofA has invested in include Betterment, Minna Technologies, and SecFi. Its investment style reflects a strategy of partnering with established fintechs that can integrate with BofA’s existing banking infrastructure.
Top investment banks like Goldman Sachs, Morgan Stanley, JPMorgan, Citi, and BofA are all making big fintech bets. Their investments span payments, lending, wealth management, blockchain, and more. Incumbent banks are increasingly embracing fintech to enhance their own digital capabilities.