Challenger banks have been amongst the most popular types of fintech companies with venture capitalists pouring capital into the market; investment in challengers banks has risen from $108mn in 2014 to the estimated $2.6bn in 2019; with the help of venture money the challenger banks have been able to acquire millions of customers in the last few years with some estimates saying they will grow to more than 85 million customers by 2023; Marcin Mazurek, Founder of Inteliace Research, tells Fintech Futures that the venture equation has flipped, “investors are competing for the ‘privilege’ to fund top start-ups and not the other way around.”; while the market has seen big success there are also some big risks that have come to light; profitability continues to be a challenge for most of the digital banks and valuations seem to be overheated; these new entrants are making their mark in many ways and they will continue to push the market and incumbents forward. Fintech Futures
