Private equity investment in the banking sector was down by more than half in 2022, according to a recent report provided by S&P Global Market Intelligence. The drop in PE and VC money was driven by the obvious economic decline and rising interest rates.
The report notes that aggregate transaction value stood at $2.03 billion in 2022, down 63.5% from $5.57 billion in 2021. The number of transactions dropped to 59 from 70 in 2021.
The U.S. and Canada recorded the highest deal value in 2022 with $992.6 million worth of known investments, followed by Europe with $811.3 million.
Looking at the first couple of months in 2023, there have been five deals totaling $110 million. The largest transaction between Jan. 1, 2022, and March 22, 2023, was the $620 million financing round of CRB Group Inc., the parent company of Cross River Bank a Fintech shop.
Of note is on the list of successful raises are multiple Fintechs.
- Starling Bank, a digital bank in the UK raised $164.7 million in April of 2022
- Atom Bank, another UK digital bank, raised $101.9 million in February 2022
- Sygnam Bank, a regulated digital asset bank in Switzerland, raised $90 million in January 2022
- Varo Bank, a digital bank in the UK, raised $50 million this past February
There are other forward-thinking digital banking firms on the list.
