• Afshan Dadan & Kshitija Kaur

2021 FinTech Roundup: Top 20 Independent Digital Banks

Updated: Dec 31, 2021

2021—the year the Digital Banking space said, “hold my beer, and watch this”… Only to quite literally make giant leaps towards the top that successfully made heads turn thanks to its various ingenious breakthroughs.


From an initial unbundling proposition of focusing on one product and niche customer segments, independent digital banks have matured and are now challenging incumbents across multiple financial products, customer cohorts, and borders. Continuing on our observance from 2020’s Top 20 Neobanks, this year’s roundup puts the spotlight on the Top 20 Independent Digital Banks through the lens of the shifts, growth hacks, and exit strategies embraced by these unique-orns:



Sailing Through A Steady Breeze

The unwavering spirit of the top 5 decacorns bore a striking resemblance to last year’s ranking – with the minor swapping of Nubank stealing Chime’s thunder by taking the first rank this year. This can be attributed to the Latin American fintech raking in about 50 million customers over the last three years, out of which 72% are active users. Nu, presently valued at $45B, began as a simple credit card provider and is now stepping up the ante towards becoming a super-app after its recent IPO. By launching an e-commerce platform, as well as expanding into both domestic and international markets through six acquisitions of game-changers, such as the US-based software consultancy Cognitect and Brazilian instant payment platform Spin Pay, Nubank does justice to its title of being the most valuable bank in Brazil, and the most valuable independent digital bank in the world.


Revolut also jumped two spots to overtake Tinkoff and replace Nubank’s previous #2 rank. The London-headquartered bank has raised total funding of $1.7B over 15 funding rounds, with a strong user base of about 15 million throughout the European market, and further expansions into countries like Japan, Singapore, and the US. In 2022, the online bank plans on going global, charting the seas to newer markets like those of India and even China.


Russian digital bank and finance super-app Tinkoff, with a $21B market capitalization as of date, has acquired four organizations so far – encompassing Cloudpayments in 2017, ticket operator company Kassir.ru a year later, and 2021’s acquisitions of Russian digital wallet Koshelek and business ecosystem Jump Finance – and is currently serving over 18.5 million customers across Russia, with an extended arm in the works towards Southeast Asia.


SoFi, the multifaceted personal finance company, remained comfortably nestled at the same position it achieved in 2020. Aspiration also cheered in through its own upward movement, from a 600M valuation to present-day’s $2.3B, placing itself at #13 from last year’s #20.


However, the same was not the case for a few other players – Judo Bank observed a downward swing to #18 from its previous ranking at #10, not having observed much of an exponential push in valuation despite going public and raising funds within this year. On similar lines was UK challenger Atom Bank, whose reduction in valuation led it to the bottom of the pyramid at #20 from 2020’s rank of #11.


The year welcomed the debut of two new entries in this value-stack of independent digital banks – sliding in at #17 is European challenger bank bunq, and American startup banking-focused neobank Mercury at #19 – replacing previous contenders MoneyLion and Neon, both bowing out of the list this year due to reduced market capitalization and keeping their valuation under wraps respectively. bunq's sustainable growth gameplan driven by a transparent subscription based business makes for an interesting strategy that helped the Nordics-dominated fintech reach a $1.9B valuation. bunq's acquisition of lender Capitalflow in 2021 also acts as a tailwind for the challenger bank in strengthening its business focus as it matures.

Broadening Horizons

Rome wasn’t built in a day, and neither was the success of these digital players. The growth journey for a majority of these valuable banks is assembled on the foundation of funds raised, customers acquired, and expansion to diverse geographies.


Amongst the others who have maintained themselves at the top include Germany’s N26, which operates across 25 countries with over 7 million customers. The digital bank is now majorly focusing on the European market after bowing out of the US.


Argentinian personal finance management-focused neobank Ualá, whose “tech-and-touch” customer strategy combines the physical prepaid card with digital aspects, has issued over 2.7 million cards since its launch.


American neobank Upgrade’s recent launch to diversify its product portfolio, with products like buy now pay later, affordable cash-back cards like the Upgrade Card, as well as tools for rewards and real-time credit health, have also helped it attract total funding of $600M across 7 funding rounds.


Getting Public, Before Turning Profitable:

2021 was the year when several scale-up digital banks decided to go public by taking multiple routes – such as IPO, direct listing, and through SPAC (Special Purpose Acquisition Company). However, the public markets have not been too kind to these growth machines with unprofitable financials. Both Nubank and MoneyLion have witnessed downward pressure after public listing, with MoneyLion squandering its unicorn status. SoFi, having diversified its product offerings and target segments, is among the few fintechs that has witnessed a valuation appreciation after listing.


P.S. We would be exploring this FinTech Public Listing trend further through an upcoming 2021 IPO insight, so keep an eye out for more details on this disruptive initiative.


Some Parting Thoughts

The digital banking landscape is being painted with novelties from every possible corner and has become a space that offers more than just a traditional outlook on banking services. With incumbent banks and non-banks both realizing the potential and demand of digital banking and embedded finance propositions, the sector is expected to witness massive competitive challenges in 2022 and beyond. A clear focus on the path to profitability and diversified revenue streams would be key for the independent digital banks to forge ahead on their innovation trajectory.


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