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Cross River Bank raising big money to lend to other fintechs

Mar 18, 2022
Illustration of a bank building as a glittering golden trophy.  

Illustration: Aïda Amer/Axios

Cross River Bank is in the process of raising $600 million in new funding led by Andreessen Horowitz and Eldridge Industries at a valuation of more than $3 billion, per Bloomberg.

  • T. Rowe Price and Whale Rock Capital Management are also participating, according to the report.

Why it matters: The deal shows that the same investors splashing money across the crytpo and fintech sectors see opportunity for growth in a traditional bank that serves them.

What it does: Cross River operates as a licensed regional savings and loan bank with just a single branch in Teaneck, N.J.

  • But like a lot of community banks, Cross River has built a lucrative business out of extending its banking, payments, and lending capabilities to a number of fast-growing fintechs.
  • The company says it has originated more than $55 billion in loans since being founded in 2008 and counts Coinbase, Affirm, Stripe, Upstart, and Rocket Loans as just a few of the fintech partners it has signed up.

Flashback: This isn't the first time Cross River has taken venture financing: In 2018, it raised $100 million in a round led by KKR, with participation from CreditEase, LionTree Partners, Ribbit Capital, Battery Ventures, and Andreessen Horowitz.

Of note: Cross River differentiates itself from other rent-a-charter community banks in two main ways:

  • First, it has built up a tech stack that isn't as dependent on third-party banking-as-a-service or treasury services to bring partners its way.
  • Second, while many rent-a-charters are primarily focused on banking and payments services, Cross River has leaned into lending, which is a more profitable business.
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