According to FinTech Weekly, Financial Technology or FinTech is:
A line of business based on using software to provide financial services. Financial technology companies are generally startups founded with the purpose of disrupting incumbent financial systems and corporations that rely less on software.
A new infographic from SavvyBeaverCanada and startup Call Levels takes a closer look at the current financial technology landscape. This infographic provides a number of key highlights and indicators relating to FinTech, a few of which I describe below.
There is a drastic rise in FinTech investment which has tripled from $3B (2013) to over $12B (2014) with $40B expected in 2015.
Popular FinTech Focus Areas
The most popular FinTech focus areas are payment and lending, Blockchain, and Cloud-based services. FinTech and the Blockchain seem like a logical pairing given the growing importance of the Blockchain with digital currencies and the potential for Blockchain technology to disrupt other existing areas such as legal, voting, and real estate. Additional information concerning the growing importance of Bitcoin may be found here.
Top 5 FinTech Unicorns
Among the top five FinTech unicorns (possess a valuation of at least $1B dollars) are Square, Stripe, POWA Technologies, Prosper, and Adyen. The areas of e-commerce and payment processing are natural areas for FinTech disruption given that legacy financial institutions are often ill equipped in dealing with emerging technologies and the accompanying fast rate of growth.
Existing legacy financial companies may innovate through acquisition. One example, presented within the overall infographic is the acquisition of SunGard Data Systems for $9.1B by Fidelity National Information Services Inc. (FIS).
Startup Unicorns Worth Against All Unicorns
It is interesting that the combined valuation of 145 FinTech unicorns is second only to Apple. Given that FinTech is very early, there is huge growth potential and FinTech may dominate the overall market very soon.
Top 3 FinTech VCs
There are some well known venture capital firms within FinTech to include Sequoia Capital and Google Ventures. With well respected early investors leading I suspect there will be be increased activity by follow-up venture capital and angel investors as recognition grows within this space.
Entrepreneurs Turned FinTech Angels
As with the respected VC firms, FinTech is attracting successful celebrity investors such as Marc Andreessen and Reid Hoffman. Both Marc Andreessen and Reid Hoffman are accomplished entrepreneurs within the technology space and as investors, have a knack for identifying winning trends early.
The preceding are simply a few areas that I found of interest within this infographic. There is much here of interest and the infographic in its entirety is provided below. The original The State of FinTech in 2016 infographic as well as an accompanying article may be found at SavvyBeaverCanada.
Made by: SavvyBeaverCA