Fintech companies continue their meteoric rise as new research from CB Insights shows that Venture Capital-backed financial technology companies raised about $40 billion from investors worldwide in 2018 alone.
Stealing the Show
Fintech companies like Plaid and Ant Financial amongst a host of other giants are showing no signs of slowing down as they continue to not only command the market, but also rake in the investments too. Investors are now increasingly showing faith in fintech firms who are also doing well to capture customers market at ease in their numbers.
The past two years have seen the Matrix FinTech Index consistently outperform known and popular indexes such as S&P 500 and other incumbent financial services. Stealing 150 points on incumbent services, the financial technology sector is still showing no signs of slowing down. While 2018 saw the Matrix FinTech Index experience some volatility, the upward returns were not in any way in doubt.
According to Matrix Partners, “financial technology firms” are defined to be:
“…venture-backed organizations that are (a) technology-first companies that leverage software to compete with traditional financial services institutions (e.g. banks, credit card networks, insurers, etc.) in the delivery of traditional financial services (e.g. lending, payments, investing, etc.).”
Although cash issuers such as Visa and MasterCard performed reasonably well last year, they were still left in the trails by Fintech firms.
While the fintech sector performed generally well globally, Asian companies stunned performance predictions bumping up investments quotas, and are the[perfect example of how financial technology companies are rapidly taking over markets. Fintech firms are now firmly invested in different sectors in finance including banking, wealth management, and lending services.
Asian company and payment affiliate of Alibaba Group Holding Ltd, ant Financial, showed immense increase commanding more a third of the total funding that fintech firms received globally. Boasting investments to the sum of $14 billion, Ant Financial’s funding accounts for almost 40 percent of the total $39.57 billion raked in by fintech firms worldwide.
The Asian fintech firms accounted for $24.88 billion funding according to CB Insights, while the United States posted $11.89 billion in total funding. In the space of just three months, not less than five fintech firms have swiftly eased into the famous ‘unicorn’ club of companies worth at least $1billion. Plaid for example, which was earlier valued at $250 million just a year ago is now worth more than $2 billion. Other companies to have joined the elite unicorn club include Brex and digital bank Monzo.