LONDON–A new analysis has identified 50 fintech startups it suggests have the potential to become “unicorns,” the term used for companies that grow to a valuation of more than $1 billion.
“Whether to enhance the efficiency in the usage of financial services provided by existing financial companies or to increase customer retention through speed and convenience, startups are transforming the financial services and allied sectors by tech driven solutions,” said GlobalData in releasing the analysis.
GlobalData’s latest report ‘Future Unicorns in Fintech’, reveals that in Q3 2021 the fintech industry reported investment in excess of $27.2 billion spanning 650 deals globally. During the period, North America (primarily the U.S.) accounted for nearly 40% of overall venture capital deal volume, followed by APAC with almost one-fourth of total investments.
Social Media Discussions
GlobalData further noted that when it comes to social media discussions, “fintech” and its use cases in banking-as-a-service, insurtech and digital payments are increasingly being mentioned by social media influencers. Key mentions on social media include Klarna launching “Pay Now” option in U.S., Mastercard offering SMEs digital cash-flow solutions via strategic partnerships and Russian food retailer launching X5 Bank to offer financial services, the company said.
“Ranging from digital payments to insurtech, from mobile banking to cross-border payments, startups aim to disrupt finance using modern technologies and innovative business models to attract various new-age consumers,” said Apoorva Bajaj, practice head of Financial Markets at GlobalData. “The COVID-19 has certainly provided tailwinds to the industry, as more consumers turned to fintech solutions to manage their finances. New opportunities keep emerging in the fintech sector across the globe, which bodes well for the startups working in the space.”
Five Potential Unicorns
Some of the fintech startups in GlobalData's list of potential unicorns include:
- Boost, which offers an API-driven infrastructure-as-a-service platform for property and casualty insurers, which reduces the cost of building and managing an insurance company by packaging the necessary operational, compliance, and capital components and making them accessible.
- Open, which is Asia’s first neo-banking platform for SMEs and startups that develops and offers an online platform for banking and intercompany settlement. It offers services ranging from deposit accounts, money transfers, debit cards for online/offline purchases, expense management, to invoice management. It currently serves more than 15,00,000 SMEs and processes US$24bn in transactions annually, GlobalData said.
- XTransfer, which is a one-stop cross-border platform offering financial and risk control services for foreign trade enterprises, dedicated to helping SMEs to greatly reduce the threshold and cost of global exhibition industry and improve global competitiveness.
- Moneytree, which is a financial data aggregation platform offering personal financial management solution, an expense tracking tool for small businesses, and a customer database software for financial enterprises. It aims to bring people and institutions closer together, help them find balance and discover new opportunities to grow personal wealth.
- Ocrolus, which is a document automation platform powering digital lending ecosystem, automating credit decisions across banking, fintech, and mortgage.