Digital lending is booming as startups leverage new technology to streamline processes that are traditionally time-consuming and expensive. 

Investors poured nearly $21B into the space in 2021, a 90% increase from 2020 and an all-time high.

Alternative lending solutions are rapidly gaining traction with millennial and Gen Z consumers, driving investment in the category. For example, incumbent banks are investing in (and partnering with) lending startups to reduce costs and address changing customer expectations. 

Small- and medium-sized business lending has also been a key factor in the funding surge: In 2021, SMB lenders received 40% of the total funding going to lending startups analyzed, with additional growth coming from investments in personal loan and point-of-sale companies.

In this brief, we’ll look at:

• Topline finding & implications for this growth
• The market drivers underlying the boom
• Top investors in the digital lending space

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