We mapped out where the top 10 US banks are investing in fintech across categories like blockchain, insurance, lending, and more.
Since 2012, the top 10 US banks by total assets have participated in 81 deals to fintech startups, totaling nearly $4.1B in disclosed funding.
In the last year, banks have homed in on the consumer, backing robo-advisors and companies offering easy-to-use money management apps.
Goldman Sachs recently invested in Folio, a Tokyo-based company that allows consumers to invest in baskets of stocks based on themes like cybersecurity and anti-aging, in addition to offering a robo-advisory service. Goldman additionally added new alternative lending companies to its portfolio, with investments into Better Mortgage and Neyber.
Below, we mapped out the top ten US banks and their fintech portfolio companies.
Please click to enlarge. Gray boxes indicate that the company is a new addition (since the start of 2017) to that investor’s portfolio. Light orange boxes indicate that the investor acquired that portfolio company.
Personal finance in focus: As noted above, Goldman continues to focus on lending with its recent additions of Nav, Better Mortgage, and Neyber, a startup that helps employers lend to their employees by deducting loan repayments from future paychecks.
Coupled with Goldman’s December 2017 acquisition of point-of-sale lending startup FinanceIt, these investments highight a broader strategic shift toward digital lending.
These moves are also in line with the growth of Goldman’s digital finance arm Marcus, which grew to $2B in personal loan originations in November 2017.
Citi and Bank of America pump the brakes on fintech: When we last performed this analysis, Citi took the top spot with the highest number of portfolio fintech companies.
Since then, Goldman has taken the lead, adding 6 new fintech companies to its portfolio in 2017 for a total of 27. (Citi holds 26 fintech firms in its portfolio, while JP Morgan Chase has 14.)
Citi only added two fintech companies to its portfolio in 2017, focusing instead on investments in databases and security: last year the bank backed Kinetica, which is working on high-performance databases using GPU hardware, and co-invested with Goldman in Unbound, which helps enterprises with private key security management.
Bank of America takes the sixth spot on this list, despite being the second largest bank by assets. The bank did not invest in a single fintech company in 2017.
Co-investing bank syndicate: In 2017, top banks also added fintech portfolio companies that competitors had already invested in.
Five members of the top 10 cohort invested in Visible Alpha, with Goldman Sachs and Wells Fargo the most recent investors to come to the table. Visible Alpha helps research organizations — like the equity research arms of banks — produce more valuable content.
Blockchain not a focus: Although cryptocurrencies like Bitcoin made headlines in 2017, the year only saw one new blockchain investment by this cohort: Citi’s investment in a small $2M Series A to Axoni. The blockchain company worked with Citi and JP Morgan on a successful test of its technology for credit-default swaps.
While banks have experimented with blockchain technology since 2014, in hopes of massive cost savings in the back-office, in general real results from these blockchain experiments have yet to materialize.
Notably, R3, which focuses on distributed ledger technology, counts 8 of the 10 banks here as investors. But while R3 has spent a lot of time rounding up a massive banking consortium, 3 of the above banks — JP Morgan, Morgan Stanley and Goldman Sachs — have already exited R3’s consortium.