Thursday, 25 Apr 2024

KKR leads $100 million investment round in Cross River Bank

NEW YORK (Reuters) – Private equity firm KKR & Co Inc (KKR.N) has led a $100 million investment in Cross River Bank, a community bank that powers some of the most well known financial technology startups in the United States, the companies said on Thursday.

Chinese fintech conglomerate CreditEase, LionTree Partners and existing investors Andreessen Horowitz, Battery Ventures and Ribbit Capital, also joined the equity round, the companies said.

The company declined to disclose its valuation following the deal.

Cross River will use the cash to grow its team and continue to invest in compliance infrastructure, the bank’s founder and Chief Executive Gilles Gade said in an interview.

Cross River is a New Jersey-chartered community bank that was founded in 2008 and is best known for partnering with fintech startups including online lender Affirm Inc, money transfer company TransferWise and cryptocurrency exchange Coinbase.

By joining forces with Cross River, which is a Federal Deposit Insurance Corp-member, fintech companies are able to access some of the infrastructure available to banks without securing a federal banking license themselves. For example, Cross River can transfer money on the banking system’s payment rails for its partners and originate loans in any U.S. state.

Companies like Affirm and TransferWise are part of a growing cohort of young businesses popular with venture capitalists that are seeking to take advantage of digital technology to offer cheaper and more user-friendly financial services.

“Cross River offers solutions to address a number of challenges faced by fintech companies by giving them access to a full suite of banking solutions and services,” Dan Pietrzak, member and co-head of private credit at KKR, said in a statement.

KKR is making the $75 million investment largely through its Private Credit Opportunities Partners II L.P. fund, the companies said.

The new funding round follows $28 million in venture capital investment late 2016 from Battery Ventures, Andreessen Horowitz and Ribbit Capital.

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