The last handful of years have been an interesting time for financial technology. Despite the uncertainty brought upon by the Covid-19 pandemic, digital banking as a whole had enjoyed significant growth thanks largely to the travel restrictions at the onset and earlier stages of the global health emergency.
According to the World Bank, two-thirds of adults worldwide now make or receive digital payments, with the share in developing economies growing from 35% in 2014 to 57% by 2021. This growth had been most evident in developing economies, with 71% having an account at a bank, other financial institution, or with a mobile money provider, up from 63% in 2017 and 42% in 2011.
Then the plateau
The aforementioned growth brought about the emergence of numerous new fintech companies, as well the rapid expansion of existing ones. The industry experienced a funding boom, with many fintech companies seeing their valuation hit the hundreds of billions mark in 2021 and 2022.
Following this peak period, however, the market has seemingly changed overnight. Like other growth-focused start-ups, fintechs seemingly have the same problem of investors suddenly being more interested in short-term profit than soaring revenue.
Some significant examples of the sudden downturn include payments giant Stripe, which saw its funding valuation hit $95 billion in March 2021. The company’s secondary market valuation even peaked at nearly $200 billion in January 2022 (!), according to Notice’s data. However, as of mid-2023, its secondary market valuation has plunged by 73% to $52.5 billion.
Another is Klarna. While the Swedish buy-now-pay-later group has been able to raise funds, it had done so at an 85% discount, as it saw its valuation down to less than $7 billion from roughly $46 billion.
Fortunately, not all digital banks have struggled through downrounds. Black Banx, the London-based borderless banking company helmed by German billionaire Michael Gastauer, has remained on the growth trajectory that it set out for itself when it was initially founded. Since its official launch, Black Banx experienced an impressive trajectory, quickly earning the trust of over 200,000 customers in its first year alone.
A key aspect to Black Banx being able to thrive even amidst challenging times is how it is funded much differently than other existing fintechs. Upon being founded by CEO Michael Gastauer in 2014, and well beyond its official launch in 2015, the company has mostly been backed by the Gastauer Family Office (GFO).
A single-family office with €10 billion in assets under management, GFO was formed by Gastauer after the successful sale of his second business. It has a venture capital arm that invests in financial technology firms, which includes Black Banx.
With its boot-strapped set-up, Black Banx is able to maintain a degree of freedom with its business model, where the focus can be geared towards the continued development of borderless banking products and services that are to the advantage of customers, as opposed to simply earning short-term profit for external investors.
Redefining borderless banking
Black Banx’s success is fueled by its commitment to providing accessible financial services worldwide. Operating in over 180 countries, the company offers private and business accounts in 28 FIAT currencies and 2 cryptocurrencies, making cross-border transactions as simple and seamless as local transactions for customers.
The year 2016 marked a significant milestone for Black Banx as it expanded its reach by establishing offices in the USA, UK, and Hong Kong. Simultaneously, the company began offering cryptocurrency as a deposit method, further appealing to tech-savvy customers. These strategic moves propelled Black Banx’s customer base to an impressive 1 million.
The following year, 2017, saw Black Banx’s global expansion continue, with new offices opening in Singapore, Brazil, India, and Russia. This expansion correlated with a substantial increase in customers, reaching an astounding 3 million.
Embracing cryptocurrency and continued growth
Black Banx continued to innovate and respond to market demands. In 2018, the company launched a fully-fledged cryptocurrency trading platform, offering trading options with leading cryptocurrencies such as BTC and ETH. Alongside this, Black Banx opened offices in Canada, further solidifying its position as a global digital banking player.
Undeterred by economic challenges brought on by the pandemic, Black Banx successfully launched its services in China and expanded its customer base to over 10.5 million. By 2021, Black Banx had further expanded its presence, launching in Japan and attracting an impressive 12 million customers.
Setting new milestone after new milestone
Entering 2022, Black Banx continued its remarkable growth trajectory. Establishing a subsidiary in Monrovia, Liberia, the company focused on providing digital banking services to the West African market. This proved to be of many successful moves for the year, as Black Banx earned a substantial $1.1 billion in revenue by the end of the 2022, further solidifying its position as a formidable player in the fintech industry.
Now, halfway into 2023, Black Banx shows no signs of slowing down. With an ever-increasing customer base, the company had already garnered over 6 million new customers, bringing the total number of people it serves to an impressive 28 million. Furthermore, Black Banx demonstrated an outstanding 33% increased onboarding rate compared to the end of 2022, showcasing its ability to maintain rapid expansion into new territories.
In a contentious time for fintech where most companies face the daunting challenge of balancing short-term profits with long-term growth, Black Banx remains the exception. By offering borderless banking solutions, embracing cryptocurrencies, and expanding its presence across the globe, Black Banx solidified its position as the 3rd best digital bank in Europe and a leading player in the fintech industry.
On pace to surpass 30 million customers by year’s end, Black Banx’s serves as a blueprint for how to thrive in an exceptionally competitive industry. The London-based digital bank has shown that a commitment to innovation and customer-centric solutions can lead to sustainable growth and success in the competitive financial technology landscape. As the financial world evolves, Black Banx remains at the forefront, reshaping the future of banking and unlocking a truly borderless financial system for everyone.