Inside the New Cross River Bank Venture Arm

Cross River Bank has been at the center of fintech for more than a decade. They started working with fintech lenders as a bank origination partner way back in 2009 when they teamed up with GreenSky. Soon, they because the de facto bank partner for much of the online lending industry.

Today, they have a wide range of banking-as-a-service offerings including payments, bank accounts, credit and debit cards, savings and more. They are the bank behind Affirm’s new savings account, Upgrade’s new rewards checking account and Dwolla’s real time payments offering just to name a few. They also facilitate the money movement for Stripe, Coinbase and Plaid.

Of course, they were also very active in the Paycheck Protection Program, jumping in on day one and reaching more than 475,000 businesses over the course of the two programs.

Now, they are doing what some of the big banks have done – starting their own venture capital arm. Cross River announced this week that they have recently established Cross River Digital Ventures, and they have already made a handful of investments.

I caught up with Hillel Olivestone, the Head of Corporate Development at Cross River, earlier today to talk about their new venture arm. He said it all began about a year ago and they have made a number investments already, three of which they have made public:

  • Innovative Assessments (IA) – a fintech startup that uses psychometrics to personalize financial services and promote financial inclusion
  • Lev – a technology-focused commercial real estate financing advisory firm
  • Finix Payments – a payments infrastructure provider enabling software that develops a payment processing platform for businesses.

While they are looking to invest across all of fintech they are most interested in embedded finance, lending and payments. Through their banking-as-a-service business they see a lot of great companies come through their door. It felt like a logical extension to start investing in some of these companies.

They will do seed stage through Series B but may consider a later stage company. These companies don’t have to be Cross River clients, they will invest in the companies they view as having the most potential.

My Take

It has been so interesting for me to watch the Cross River journey up close. They were a supporter of the very first LendIt event back in 2013 and I have worked together with their team on many different initiatives since then. I have seen them grow from a small team with a tiny asset base to the leading fintech bank with $13.5 billion in assets.

Along the way, Cross River has created the most complete suite of banking-as-a-service offerings in the industry. And with the movement towards embedded finance just getting going their future looks bright.

Now, they are in the venture capital game at a unique time when money is flowing into fintech like never before. When will the music end and valuations start coming down? No one knows the answer to that question but one thing is for certain. Finance will undergo more change this decade than last decade. And Cross River will continue to be in the thick of it all.

  • Peter Renton

    Peter Renton is the chairman and co-founder of Fintech Nexus, the world’s largest digital media company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series.