2019 - Year of the FinTech Unicorn

Unicorn collage (Image Credit -  FinTech  Schweiz)

Unicorn collage (Image Credit - FinTech Schweiz)

To say that 2018 was a banner year for the financial technology (FinTech) industry would be a gross understatement.  While global FinTech investments grew from $19.9B to $39.4B in 2014 - 2017, in the first half of 2018 there was $41.7B invested!

The industry growth was attributed to a handful of maturing companies, but has now dramatically spread to a larger pool of firms (including rising startups) that have reached the status of unicorn

“A unicorn startup or unicorn company is a private company with a valuation of over $1 Billion.”

- Excerpt from CB Insights Report of ‘The Global Unicorn Club’

Companies over $10 billion are labeled decacorn; with companies over $100 billion titled hectocorn.

Out of the 260 unicorns worldwide as of mid-2018, about 34 belong to the FinTech industry (16 from the United States) — which represents the highest number of unicorns in any business sector. 

Infographic of 2017 FinTech Unicorns (Image Credit -  Jobsloving )

Infographic of 2017 FinTech Unicorns (Image Credit - Jobsloving)

 U. S. FinTech Unicorns for 2019

Here’s the list of the 16 FinTech unicorns in the US along with a brief description and valuation of the company:

  • Stripe - payments / remittances leader, currently valued at $20B (unicorn status as of 1/23/14);

  • Coinbase - top cryptocurrency wallet and platform in the US valued at $8B (became a unicorn on 8/10/17);

  • Robinhood - fast-growing equity and cryptocurrency marketplace valued at $5.6B (earned its status on 4/26/17);

  • Social Finance (SoFi) - top lender and refinancer of student loans, valued at $4.5B (became a unicorn on 2/3/15);

  • Credit Karma - top provider of credit reporting and monitoring tools, valued at $3.5B (unicorn as of 9/29/14);

  • Plaid Technologies - leader in providing API tools to link customer’s financial data with applications, valued at $2.65B (earned status as of 12/11/18);

  • Circle Internet Financial - an open cryptocurrency exchange valued at $3B (earned status on 5/15/18);

  • Zenefits - provider of online HR software for businesses valued at $2B (earned status as of 5/6/15);

  • Avant - personal loan provider, valued at $2B (earned status as of 9/30/15);

  • Affirm - offers installment loans at point of sale for customers, valued at $2B (earned status as of 12/11/17);

  • AvidXchange - B2B payment network, valued at $1.4B (earned status on 6/8/17);

  • Brex - provider of corporate cards for startups, valued at $1.1B (earned status on 10/5/18);

  • Kabbage - small business lender, valued at $1B (earned status on 10/14/15);

  • Gusto - payroll app and service provider for small businesses, valued at $1B (earned status on 12/18/15);

  • Symphony Communications Services - workflow application, valued at $1B (earned status on 5/16/17);

  • Tradeshift - enterprise platform for supply chain, valued at $1B (earned status on 5/30/18).

Companies focused on payments / transfers and lending (personal and business) continue to take the majority of industry spots. However, equity and cryptocurrency platforms are quickly rising up the ranks coming off tremendous growth in 2017 and 2018.

Which up-and-coming FinTechs will be added to the list in 2019?

The 2018 FinTech100 list would provide likely candidates from around the world, especially with companies like Grab in Southeast Asia.

With the current rate of growth, the 2019 trend of newly added unicorns likely will decline as acquisitions and consolidations increase, especially from traditional banks and established FinTechs with stockpiles of cash. A recent example of this is the recent acquisition of Quovo by newly minted unicorn, Plaid, who put recent funding to use in making the purchase.

Overall, 2019 is expected to be an exciting year for the FinTech industry, full of large investments, innovation, and worldwide impact from companies of all sizes, especially unicorns.

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Original Source - CB Insights