Wall Street's New Power Couple: Citi and Carlyle Target Fintech's $5.2 Trillion Goldmine

Published 1 day ago• 2 minute read

) and Carlyle Group are teaming up in a way that could reshape how early-stage fintechs raise capital. Their new agreement lets them co-invest in young lending platformsand in the financial assets those platforms originate, like consumer loans, auto financing, or even solar power contracts. Carlyle will focus on private credit, while Citi's SPRINT venture teamalready known for backing fintechs like Pyloncould eventually help take those loans public via securitization. The goal? Back promising fintechs from seed to scale, across both private and public markets.

This isn't Carlyle's first move in the space. Last year, it took a minority stake in residential solar lender Sungage Financial and bought some of its loans. Blackstone has made similar plays. What's new here is the structure: by linking up with Citi, Carlyle gets access to deal flow that might not meet a bank's typical risk appetite, while Citi gains a partner that can go deeper into private lending. According to Citi's Rajiv Amlani, startups without enough credit history might be steered to Carlyle insteadespecially those pushing the envelope on AI and specialty finance.

And the stakes are rising fast. Asset-backed finance is a $5.2 trillion arena, and private credit managers are aggressively expanding into it. This deal marks Citi's third such partnership in just 18 monthsafter similar tie-ups with Apollo and LuminArx. As Akhil Bansal of Carlyle put it, fintechs don't want to keep reintroducing themselves every time they raise capital. With this setup, Citi and Carlyle are offering a long-term capital partnerfrom Series A to ABS. It's a full-stack strategy for the next wave of tech-enabled lenders.

This article first appeared on GuruFocus.