7 Banks Funding Fintech and Payments
August 26, 2016 1:59 PM
The era of banks and fintech companies cozying up to each other is in full bloom. Fintechs realize they can better disrupt the industry from within, while banks are looking for partners to help them navigate the digital world. Here's a look at how banks worldwide are buying, investing in and in some cases lending to fintech firms.
Groupe BPCE-Fidor Bank
The second-largest French bank acquired Fidor Bank, the popular German digital startup, last month for an undisclosed sum. François Pérol, chairman of Groupe BPCE, said the acquisition would help the bank "develop a customer-centric approach enabled by a digital banking technology and to be more involved in digital and mobile banking field."
BPCE also plans to offer Fidor's proprietary digital banking platform, which facilitates banking through application programming interfaces, as a white-label service.
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HSBC-Xenomorph
The London-based banking giant in July announced it was making a loan to Xenomorph, a provider of data management technology to banks, investment managers and insurance companies. The funding should allow Xenomorph to accelerate its plans to globally market its financial analytics and data management platform.
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Societe Generale-Tagpay
Societe Generale announced last month that it had acquired a stake in TagPay, a French fintech company operating in Africa. Tagpay's mobile money platform allows banks to provide digital-wallet services to their customers, as well as other features including sending remittances, access to microfinance and salary disbursements.
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Santander InnoVentures
Santander InnoVentures, headed by Mariano Belinky, has been one of the most active banks in investing in fintechs firms. In the last year, it has invested in: Ripple, a distributed-ledger tech firm; Digital Asset Holdings, a blockchain software company; and Socure, an identity-verification solution. In July the bank doubled InnoVenture's fund by adding another $100 million to it.
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BBVA
The Spanish banking giant is another that has been at the forefront of partnering with fintech firms. In March it announced plans to buy Holvi, a Helsinki-based online business banking service.
Also, earlier this year, BBVA spun out its venture-capital arm into Propel Venture Partners, a stand-alone firm. Since then, Propel led a $7 million investment round in Guideline, a fintech startup focused on 401(k)s, and has participated in several seed funding rounds.
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SigFig
The robo-advisory firm SigFig announced a $40 million capital raise in May. The raise was led by the mutual funds company Eaton Vance, but UBS and Santander InnoVentures also participated in the raise. Venture capital firms such as Bain Capital Ventures, DCM Ventures, Nyca Partners and Union Square Ventures also participated.
Additionally, Comerica provided SigFig with a $7 million credit facility alongside the raise.
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KeyCorp
KeyCorp has focused on enhancing its commercial payments offerings, sometimes through investments. Last September, it purchased a minority stake in Charlotte-based AvidXchange, which makes software that digitizes paper invoices. Key also invested in Philadelphia-based InstaMed, a health care payments provider last year.
