This week, we are looking at some of the big movers and shakers in the FinTech world, but more specifically, which FinTech startups have really caught our attention so far this year.
There are thousands upon thousands of FinTech startups across the globe, so sifting through all of them to find the top 10 FinTech startups of 2018 would be a monumental task. Instead, the criteria for this list has been built based on technology we are using, technology we are interested in, and technology that has been massively funded due to its usage potential.
We start with…
Forbes values GreenSky as the biggest FinTech startup in the world, based on their $560m funding and $4.5bn valuation. The company, based in Atlanta, Georgia, provides on-the-spot financing for home improvement projects, with loans capped at $65,000. Remarkably, they have already handed out over $10bn in loans!
For the customer, the option of zero-interest promotional periods on their loans, which can last up to five years, appears to be a huge motivator for using the service. GreenSky works with a network of contractors and bank partners to make it all possible, and this has got businesses like Wells Fargo and Synchrony Financial in a bit of a sweat.
As FinTech startups go, this one is pretty cool – they took an old industry, like rental insurance, and made it simple and easy for the 2018 renter. Policies are cheap, you can do everything through the app, admin costs are minimised, Lemonade take a fixed premium and the rest goes to the pot for payouts, of which ⅓ are done automatically. Even better, the surplus is paid out to charities that the users choose! Lemonade has received $120m in funding so far, and is valued at at least $500m.
Circle is a peer-to-peer payments platform that is available as an app, and can even be integrated with iMessage to send money like a text message. It’s free to use and there are no markups on sending the money, they’re even the first cross-border payment platform to allow payments to US bank accounts with no added costs. Funding so far has reached over $136m, and after their fourth round of funding, they were valued at $480m. It’s very innovative and worth looking into further, especially if you’re always sending small amounts of money to friends and family.
After doubling the size of their workforce in the last 12 months, it looks like Fenergo is really on the up. Their client life-cycle management technology has been developed in collaboration with more than 60 banks, and supports anti-money laundering, regulatory compliance and client data management. Their funding is reportedly around $80m, and the Irish company is valued at around $110m. We love FinTech startups that support banks, and this is one of the most interesting.
Online lending is a very risky industry, but for ID Finance, they’ve got a great model that works exclusively in emerging and growing markets. Their latest news states that they are investing in businesses in Kazakhstan, which is very interesting. They also offer credit scoring and digital financial services, as well as data science. It’s reported that they are issuing more than 50,000 loans a month in emerging markets, like Mexico, Poland and Georgia. They have raised more than $50m, are based in Barcelona, have almost 400 employees and are considered Russia’s largest online lender.
As one of the most well-funded businesses on this list with $291m, and a valuation of $2.25bn, Klarna is a powerhouse that you might never have heard of. They provide online payment services for e-commerce sites, to help eliminate the risks for both buyers and sellers. Customers can choose to get charged 14 or 30 days after they have received the product, which in an ideal world, is perfect from a customer POV. There is also the option to spread out your payments. The business is over 12 years old, so it’s by no means new, but it has grown considerably in that time. Essentially, they put consumer spending power back with the consumer, and whilst it may not look advantageous to the stores, it’s actually Klarna that takes all the credit risk, so sellers always get paid.
Very quickly, Monzo has arrived as perhaps the biggest competitor to Revolut, spoiling their party and creating a pretty big fiesta of their own. Now, with more than 500,000 using their cards, and more than 20,000 current-account holders, they’ve found themselves as a household name for millennials. Interestingly, one of their biggest investors is Stripe, who we covered previously in this article. They have been funded around $140m, and the digital-only banking platform has been valued at around $335m. The popularity of their service continues to grow, with thousands sitting on their waiting list, though you need a UK bank account and address to sign up.
Much like Lemonade, who we covered earlier in this piece, Metromile took an old insurance market, in this case, car insurance, and welcomed it to the modern day. The core idea behind this innovative Fintech startup was to create a digital insurance service that appealed to people who don’t use their cars very much, and so shouldn’t have to pay large bills. Their pay-per-mile offering has become wildly popular over the last few years, and even investors are seeing the genius behind it, which is why they have raised more than $200m in six unannounced investment rounds.
Right now, they’re exclusively serving the US market with their flat monthly rate plus per mile charge, but we may see them in Europe in the future if their investment leads to a global expansion. Their valuation is currently unknown, as they fly somewhat under the radar towards doubtless success.
Much like Coinbase opened up an easy door into what could be seen as a complicated industry, WiseBanyan makes having an investment portfolio something that anyone can do, starting with just $1. As their slogan says ‘Investing should be a right, not a privilege’.
With excellent algorithms and analytics, their customer-friendly app is growing amongst would-be investors who want to see if they possess the skills to be the next Warren Buffett. WiseBanyan’s New York founders quietly raised around $10m in 2016, and are currently holding an estimated total of more than $100m in investments for their users. Their biggest competitor is probably Stash, who they are regularly mentioned in comparison with, and who are also worth a mention in this piece.
Imagine a small square gadget, not much bigger than a stamp, that can be plugged into your smartphone’s headphone port (sorry iPhone X users!) and can instantly transform your phone into a credit card reader for accepting payments. Well, imagine no longer, Square made it a reality with their awesome magstripe reader. Of course, this is part of a much bigger service and operation, which is in part enabled by the ginormous $590m funding they’ve received so far.
There’s also a contactless version of Square, which is a bit larger, but is very cool to look at, like a FinTech version of a bar of soap. The bigger plan is that they charge 2.5% + 0.10c for every transaction (in the US), making them a small fortune as they enable mobile-friendly card payments in small stores, stalls and popups. Think of the possibilities, like paying for a food delivery, or buying fruit at the market. Whilst old payment systems needed a landline, and newer ones required wifi, now it can all be done with your mobile data, and that’s something that can appeal to everyone.
Square nicely ‘rounds off’ our top 10 FinTech Startups of 2018…
You don’t need to be American or British to start a successful FinTech Startup, as we’ve seen from some of these brilliant global solutions. You don’t need to raise hundreds of millions of dollars to experience exponential growth, as we’ve seen from some of these interesting financial technologies.
What you do need is an idea, and the willingness to make it happen. Here at Turing Technology, we take your ideas and deliver them in the form of software, products and tools. We have the willingness to make it happen, and the experienced and skilful team in our new offices to make sure that what you receive of the highest quality.