• WhiteSight

Top 20 Neo-Banks of 2020

Updated: Jan 12

The Top 20 Neo-banks of 2020 research aims to highlight the exponential momentum in the neo-banking space through the most promising independent neo-banks across the world.

For the purpose of this research, we have defined 'Independent Neo-Banks' as digital banking startups with independent ownership, i.e. they are not a subsidiary of an existing enterprise such as incumbent financial institutions, e-commerce firms, telcos, social media firms etc.

The study ranks the neo-banks on the basis of valuation and compares them across various parameters such as user base, funding, investors and more.

Top 20 Most Valued Neo-banks

Valuation data has been taken from publicly available sources such as press releases, and estimations from dealroom.co, FintechLabs, etc.

The neo-bank phenomenon continues to go from strength to strength amid the coronavirus-fueled digital acceleration in 2020.

The Usual ✅ Suspects:

  • The top 2 Neo-banks on the list are Chime from the US and NuBank from Brazil.

  • The US and the EU (the UK included) contribute the maximum number of neo-banks to the list, 7 each.

The Unusual 😱 Suspects:

  • Tinkoff, a Russian Challenger Bank, takes the #3 spot in the rankings. Tinkoff is a true unique-orn on the list as it not just holds a billion $ valuation but is also profitable (Since 2009) and public (IPO’ed in 2013).

  • Latin America contributes 4 banks NuBank, C6Bank, Neon and Uala to this list, coming from Brazil and Argentina.

  • C6Bank is the fastest to join the list, taking just ~2 years to make it to the #top20 list.

  • Oaknorth and Judo Bank are the only SME-focussed neo-banks on the list.

Anticipating more 🚀 in the Neo-banking space in 2021.

Ranked As Per User Base

The Mega-Neobanks 🐋

  • Nubank takes the cake 🍰with a sizable 30 MM users, which it has doubled from 15 MM in 2019.

  • Revolut, currently at 13 MM, added 5 MM users in the past year, while Tinkoff (12MM) & Chime (10MM) have added 2 MM & 3.5 MM users, respectively, to reach their current standing.

The Next Growth Frontier 🚀

New Segment: Nubank, Neon, Monzo, Revolut have introduced business banking products in recent years with a specific focus on micro-#entrepreneurs & freelancers.

New Products: Nubank & Starling Bank bring investment with the acquisition of Easynvest and partnership with Nutmeg respectively.

New Regions: Nubank expands to Mexico & Colombia, Revolut is on a global expansion spree and Starling has plans for Ireland & the EU in 2021.

New Niches: AspirationBank strives for green financial services 🌱, while @Uala aims for #financialinclusion 🌐. @Varo & @current both have a GenZ focus🤳🏼, while @dave presents a holistic approach to personal finance for the masses. 👩🏼‍🤝‍👨🏽

Ranked As Per Funding

Funding amounts for Judo Bank have been converted to USD from AUD.

Neobank fundraising bandwagon 💵

  • These Top 20 Independent #Neobanks have raised total funding of $15.2 Billion in the last decade.

Top 3 Neo-Banks by Funding 📊

  • Sofi, Judo Bank and Ttinkoff raised a total of $5.8 Billion since its launch.

  • Sofi topped the chart with total funding of $2.5 Billion, Judo came second with a total of $1.7 Billion, raising $215 MM in 2020 and Tinkoff had a total of $1.6 Billion in 2012 and listed in London Stock Exchange in 2013 with a $1.1 Billion IPO.

Geographic Diversity 🌐

  • Top US #neobanks have raised total funding of $5.3 Billion: Sofi, Chime, Varo, Moneylion, Upgrade, Aspiration, Current, and Dave.

  • Top UK neo-banks have raised total funding of $3.5 Billion which includes @oaknorth, Revolut, Atom Bank, Monzo and Starling Bank.

  • Nubank, Neon, C6 and Uala have raised a total of $2.3 Billion in LATAM.

Top Investors of the Neo-Banks

It takes money to change money - That’s the mantra of Ribbit Capital, one of the leading investors in the Neo-banking space. We explore the funding powerhouses partnering with the Top 20 independent #Neobanks, who have managed to raise a mind-boggling 🤯 amount of over $2.5 billion just in 2020:

A Global Community 🌐

  • Like the neo-banks, their #investors are widespread around the world. The most prominent investors in the top 20 neo-banks are from the US 🇺🇸 (7), the UK🇬🇧 (3) and China🇨🇳 (2).

The Investors 🤑

  • Top 5 investors which include Ribbit Capital, Tencent Holdings, GoldmanSachs, Future Fifty and Softbank have 3 or more top 20 neo-banks in their portfolios.

  • Nubank, Uala, Chime and Revolut emerge as the most recurring neo-banks on the portfolios of these investors.

Top 5 Funding Rounds 💰

  • Chime, the #1 on our Top20 list, was valued at $5.8B in December 2019. With the biggest neo-bank #funding round of the year ($534M), it more than doubled its valuation to $14.5 Bn in 2020.

  • Brazilian neo-banks Nubank and Neon, each raised $300M in 2020. Nubank retained its decacorn valuation from 2019, while Neon finally crossed into #unicorn territory.

  • Aussie SME neo-bank Judo Bank had quite an eventful 2020 with two equity funding rounds, first of which valued it at $1B in May, followed by another $215M round in December which boosted its #valuation to $1.6B.

Founding Team Trends

  • 55 founders of Top 20 Most Valued Independent Neo-banks have been considered for the study. It includes founders who are no longer a part of the company (Ex.: Companies like SoFi, Varo, Monzo, etc.)

  • Previous industry experience before starting up respective neo-banks is subjective of the previous company segmentation and type of role. The calculations are supported by data from publicly available LinkedIn profiles of founders/co-founders.

Apart from the product-market fit and launch timing, the founding team is considered as one of the key constituents to a startup's success. What best place to look for #empirical evidence of the founding teams' traits: The top 20 Independent Neo-banks.

Here's our analysis of the hustlers, the growth-hackers, the visionaries behind the success of top neo-banks.

Starting-up Strong 💪🏼

  • New and exciting ventures are not so new to many of these founders. Pedro Conrade had 4 startups under his belt prior to founding Neon in 2014, while Jason Wilk had 3 before starting Dave.

  • Some founders passported their domain knowledge from incumbent financial institutions to neo-banks - such as founders of Judo Bank (from National Australia Bank), Starling Bank (from Allied Irish Bank), C6 Bank (from BTG Pactual)

  • Upgrade was the brainchild of the founders & employees of Lending Club, with its former CEO Renaud Laplanche at the helm.

The Stereotype Breakers 💥

Industry Experience💡

  • It's often seen that new fintech ideas emerge from places completely unrelated to finance. The founders of the US neo-bank Dave are the perfect example - all of them from non-finance domains like Design, Tech and Internet Platforms.

  • Another such example is Joe Sanberg of Aspiration Bank who brings his social entrepreneurship experience to the green bank.

We'd say we're fairly inspired by this lot and we can only imagine the multifold inspiration they bring to the fintech community. More power to them all 🙌🏼

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