INDUSTRY SPOTLIGHT

Neobanks

Immerse yourself into a skyrocketing and flourishing field of neobanking venture capital industry to carve out a unique slice of untapped industry potential and learn about possible obstacles and ways to stand out in this highly competitive realm.

Financial revolution today, banking at your fingertips tomorrow

Fueled by the rising need for financial inclusion and the popularity of digital payments, neobanks are on a fast track to redefine traditional banking. Neobanking is revolutionizing the financial landscape, offering digital-first, user-centered banking experiences that resonate with today’s tech-savvy consumers and provide bountiful opportunities for new market entrants. But…

This exciting journey has its twists and turns

Startups should be ready to navigate complex regulatory waters. Adherence to financial standards such as AML and KYC is a must for both traditional banks and neobanks. And it requires a complete understanding of the financial domain and substantial funds infusions.

Although 2022 became a record-breaking year with a catch of $132B in funding, venture capitalists’ pockets, while deep, are not bottomless. Plus, the lack of physical assets makes investors more discerning and selective in their choices. Thus…

To make a splash, go beyond just a clever idea

Having created 100+ practical business blueprints and market entry plans, assisted 50+ companies in M&A scouting, and secured $2B in fundraising, at Waveup, we know how to guide your startup from seed to harvest. Let’s check our neobanking market research to see what this field has to offer. 

33x growth
The neobanking industry is projected to skyrocket from $66 billion to $2.2 trillion in 2030.

 

2.5B
The anticipated number of mobile banking users by 2025.

 

$300
is the average amount a neobank user can save per year.

310M

is the estimated number of neobank users by 2025.

$10T

is the forecasted global digital payments volume by 2025.

7/10

Every 7th representative of Millenials and Gen Z use neobanks.

VENTURE LANDSCAPE

In 2022, fundraising in the neobanking sector hit $132B, being a 92% increase compared to 2021

Primary verticals the funds are flowing to:

  • Digital Wallets and Payments
  • Lending Platforms
  • B2B Banking Solutions
  • RegTech (Regulatory Technology)

Leading neobanking investors

Write to us to know more

WAVEUP VIEW

Challenges neobanking startups experience on their way

Navigating turbulent seas of neobank funding

Fueled by the urge to invest in marketing, technology, and customer loyalty, startups require substantial financial infusions. But without physical assets, neobanks are like a ship without an anchor, left adrift in the turbulent seas of capital fundraising. In their quest for growth, they may find themselves caught between a rock and a hard place as investors may refuse to back a bank without physical presence, as it happened to Monzo, a UK-based neobank, which lost 40% due to funding turbulence during covid-19.

Balancing the regulatory tightrope

Complying with specific financial regulations such as AML and KYC is like walking on a tightrope. Comprehending and navigating the following regulations is both time-consuming and expensive, with any mistake leading to penalties, legal issues, and loss of customer trust.

Outrunning the Titans

In the battle for the hearts and wallets of customers and investors, traditional banks, with their long-standing physical presence, have a head start and seem to outrun the digital newcomers. Winning customer loyalty for neobanks is like trying to catch the bus that has already left – challenging, time-consuming, and expensive, yet not entirely out of reach. And with excellent customer services, robust security, and clear communication, new entrants can cement their market position.

How we can help

Startups
Fundraising advisory

From diligent industry analysis to storytelling and financial forecasts, we’re helping founders crystallize and structure key business fundamentals and translate them into a compelling investment opportunity framed in a winning neobanking pitch deck.

Investors
Due diligence and portfolio support

Evaluating potential investments, conducting due diligence, and supporting portfolio companies on their new fundraising rounds.

Established companies
Growth hacking

Discovering market opportunities in the market and developing execution strategies to build actionable and scalable blueprints for growth.

WHO WE ARE

Unlocking your next stage of growth

Waveup is a leading global advisory empowering companies to fuel growth, attract investments, and secure strategic partnerships.

We turn data into business insights that drive results, helping companies excel in the competitive B2C and B2B spaces across 50+ verticals, discovering and catalizing opportunities for growth.

Our investment consulting services for neobanking startups

Market intelligence

Fundraising support

Pitch decks

Financial models

Investor research

Growth consulting

Go-to-market strategies

Marketing/sales materials

Design support

Learn more

FAQ

What makes the industry appealing for neobanking financing opportunities?

Neobanks are appealing to potential investors because they emphasize social responsibility, ethical banking practices, and sustainable growth models.

What is the current size of the neobanking market, and its potential for future neobanking startups?

In 2022, the neobanking market constituted $67B, projected to expand at a yearly growth rate of 54.8%. The ongoing trend towards digitalization and an evolving consumer demand for more personalized and convenient banking services offer significant potential for new neobanking startups.

How challenging is it to secure funding for neobanking startups nowadays?

Lack of physical assets and regulatory struggle make fundraising for neobanking startups challenging, but a clear differentiation strategy, robust business model, and evidence of market traction make it possible. Plus, with a persuasive neobank pitch deck and proactive investor engagement approach, the process will be much smoother.

How long does it take to create a neobank pitch deck and a financial model for a neobanking startup?

Project complexity and our ongoing tasks determine the time of completion. Usually, it takes us from two to three weeks, yet up to a month in complex cases. That’s why each case should be discussed separately.

What are the key mistakes neobanking startups make in their pitch decks?

Mostly, neobank pitch decks lack coherent investment narration. The bulk of pitch decks don’t answer the most important question—why they chose exactly this market and exactly now. Plus, they fail to show traction, robust go-to-market strategy, and relevant information, being usually overdosed with technical concepts.

What are the main challenges neobanking startups face, and how are they tackling them?

Neobank funding hurdles, competition, and regulatory concerns are the main issues within the neobanking industry. Nevertheless, companies with a strong market strategy and an ability to communicate the value of their proposition and to solve the legal-related dilemmas can overcome all the challenges.

How competitive is the neobanking market?

The field is growing fast, with 250+ neobanking startups opened recently, the neobanks offers are diverse, the traditional banks are entering the digital space… All of this ignites the rivalry, making neobanking a highly competitive domain.

What services do you provide for investors who are either considering or have already invested in neobanking startups?

We assist investment funds in carrying out comprehensive due diligence of the prospective neobanking projects to help decide whether the opportunity is worth investing. We also provide end-to-end fundraising support to the partner fund’s portfolio companies.

Do you provide neobanking M&A support?

Sure thing! We can help detect and assess new M&A opportunities, support initiatives by devising CIM documents, valuing companies, conduct modeling for buy-side and sell-side transactions.

Do you make intros to neobanking VCs?

Yes, we can help you contact neonanking VSs if your project meets the requirements such as round size, team, product, etc. This service is a part of our comprehensive investor relations package, which includes creating a pipeline of investors interested in neobanking, preparing founders for the intro meetings with them, fostering post-deal communication, etc.

Do you provide comprehensive neobanking market research on request?

Absolutely! Our analysts provide customized market intelligence on the neobanking market, including industry reports, competitive analysis, and market research to set you up for success. We leverage reliable proprietary data sources to help you get a full grasp of the neobanking landscape, including things like market’s size, diversity, and competition.

Which neobanking startup funding stages do you assist with?

Our proficiency lies in guiding projects from the Seed to Series B growth phases within the neobanking industry. Moreover, we support companies in pre-seed and Series C+ stages and also engage in collaboration with established firms and investment funds.

Building a solution in the neobanking industry? Get in touch with us

Fuel your next stage of growth with Waveup—your one-stop shop for fundraising support, outsourced neobanking M&A advisory, growth strategy consulting, and presentation design. Leave your email, and let’s chat!

Have a project in mind?

Leave your information below and one of our experts will be in touch to schedule a call.

Your name:
*Your email:
*You need help with:
Your project is:
Your current stage:
*Your maximum budget:
How did you find us?

Form submitted successfully.

Unlock in-depth insights with our comprehensive industry report!

Unrivaled coverage

Dive deep into industry research with unparalleled depth and breadth

Data-backed decisions

Equip yourself with the analysis and forecasts essential for strategic planning

Pathway to future-proof insights

Understand today’s trends and anticipate tomorrow’s shifts to ensure your business stays ahead

What you get

  • Industry benchmarks: Compare vital financial ratios to gauge business risks effectively
  • Opportunity & threat analysis: Identify and navigate the challenges and prospects inherent in the industry
  • Holistic risk assessment: View the industry from every angle, eliminating blind spots and enhancing strategic decisions
  • Geographic insights: Explore business concentration and global trade nuances to spot unique opportunities
  • Industry competitors & barriers: Recognize key players and understand the challenges new entrants face
  • Credible data presentation: Showcase industry statistics, pain points, and success factors to establish your authority
  • Actionable insights: Transform extensive research into concise, actionable insights for a comprehensive market view
  • Five-year forecasts: Visualize the industry’s growth trajectory and stay prepared for the future