Digital Banks
around the World
Are on Fire

As they challenge traditional banking models with a refreshing business approach that does not include small print, the value of digital banks in the world soars to new heights

Racheli Bindman Racheli Bindman | August 16, 2021

Digital banking is all aflutter.

Covid-19, which is still with us, has further reinforced among bank customers the fact that it is no longer necessary to go to a physical branch, in order to run and manage a bank account.


Digital banks that have popped up around the world in recent years like mushrooms after the rain, have become a coveted commodity among financial investors, giving them billions of dollars of value, even though some of them have not yet started to record profits.

It’s true, traditional banks have made significant digital strides, but investors, including giants such as Soft Bank and Berkshire Hathaway, which are controlled by the American investment tycoon Warren Buffet, recognize something else in them.


Digital banks established from scratch, free from hundreds of branches, thousands of employees and outdated computer systems, have brought with them a refreshing approach that offers a new relationship with customers. Especially for those who have already lost faith in the tangle of small print and complex words.

It turns out that it is possible to create a sustainable business model even without conflicts of interest with customers and without earning at the expense of their losses. Customers, for their part, are voting with their feet and the hegemony of traditional banking is beginning to crack.


Here are a few hot-of-the-press stories:

It has only recently become known that American digital banking fintech Chime has completed a $ 750 million fundraiser at a value of $ 25 billion. A value larger by no less than $ 10 billion compared to the value given to it in the previous fundraiser that took place less than a year ago, in October 2020.


Even more amazing is that the company received a price tag of only $ 1.5 billion at the start of 2019. Among Chime investors: Investment Corporation General Atlantic, Soft Bank and Tiger Global.


Shortly before, the banking fintech Revolut, who already have 16 million users around the world and are recognized in the lucrative currency conversions they offer, has completed an $ 800 million fundraiser.

And this, according to Chime’s even zestier value of $ 33 billion. This fundraiser turned Revolut into the highest value banking firm in England!


Breathing down Revolut’s neck is the successful Brazilian digital bank Nubank, who recently received a value of $ 30 billion, with Berkshire Hathaway and owner Buffett placing their bets on them. Warren Buffett is known for his value investments and is invested in, among others, American Express, Bank of America and US Bancorp, with Buffett being considered one of the most significant financiers of banks around the world.


That is what makes his bet on the Brazilian digital bank particularly interesting, since it is a bank that claims to shake up traditional banking systems around the world. In 2020, Nubank recorded revenue of $ 962 million and recently its number of customers crossed the 40 million mark.


Another respected representative on the list of rising unicorns in the digital banking industry is Dutch Bunq, which raised $ 228 million last July at a value of $ 1.9 billion, after the bank has so far been funded by its founder Ali Niknam. Niknam has poured quite a bit of money into his venture – nearly $ 100 million from his personal fortune. But the current fundraising was conducted when the bank was on the way to balancing its bottom line with deposits worth more than $ 1 billion.


And lastly, another amazing Cinderella story about Starling Bank, a British digital bank founded by Anne Bowden. It was recently revealed that Starling was the bank to which most customers in the UK moved their accounts during the first quarter of 2021, after 4 consecutive quarters in which it was among the two leading banks in signing new customers. Between January and March, almost 18,000 customers transferred their banking activities from their bank to Starling without any joining grants, which are customary at other banks in England.


And what’s happening in Israel?

Thanks to the ability to switch banks at the click of a button – there is a lot to look forward to!