The last months have dramatically changed things in the global world. Still, there are no options to turn off the global finance sector. At the beginning of 2020, Business Insider notes the fintech industry is maturing as it becomes a truly global movement. For example, a consumer that has not ever had a chance to invest can do this today. It is possible with the newest app like Acorns.
You will find out:
1. Maturing of fintech startups in 2020
2. Rising in the use of fintech apps
3. Investments in fintech startups
4. 12 fintech companies to watch
5. How fintech startups become fintech enterprises
6. Starting a startup? We can help
The Wave Of Cooperation
A few years ago, co-founder of AOL and owner at Revolution LLC Steve Case was talking about a new wave of the Internet. The previous wave brought an era of applications. And now, the global Internet will be integrated into our everyday life even deeper. It will challenge such big industries as healthcare, education, energy, transportation, and finance. Steve Case predicted that the new wave would bring the era of uberization. It means that people will look for doctors, lawyers, financial consultants, etc. using mobile apps, like passengers and drivers of Uber. For example, in the UK, the numbers of workers that find jobs on gig economy platforms double for the past three years and now accounts for 4.7 million.
Rising in the use of fintech apps
All this could happen at its time, but the Covid-19 pandemic has just speeded it up. The coronavirus has driven a massive 72% rise in the use of fintech apps in Europe, Forbes wrote. The long-term period of quarantine forced people to find new ways to keep working and satisfying their needs. Avoiding visiting public places and contacting each other, people must have access to their finances digitally. Financial firms that cannot deliver the best quality to their customers will lose to those who can. Fintech could use these times not just to adapt people to the new pandemic reality but also help to live in such circumstances. These are encouraging news for the fintech industry.
Christian Haddad and Lars Hornuf insist that the high demand for fintech startups depends on the economy and the traditional capital market. A higher level of economy – a higher level of fintech market. In the US, apps already accounted for more than 90% of impressions. However, many people have begun to use mobile payment services in developing countries where financial institutions are more difficult to access.
Fintech becomes even stronger. Invest in fintech startups
In the last year, half of the investments in the fintech industry were attracted by just 83 mega-rounds (worth $100 million or more). It means that fintech has become heavier. Moreover, 2019 was a record year for every market except Europe. For example, it was the first mega-round in this area for Africa. Developing countries have been enhancing their fintech ecosystems. African fintech has grown in funding from $110.6 million in 2018 up to $282.5 million in 2019, and the trend continues despite the crisis. The fintech markets grow also in untraditional regions such as Southeast Asia and Latin America.
In the CGAP, they even say that fintech is refocusing on the poor. In many developing countries, a lot of people can connect financial tools only through mobile. Some say that providing fintech infrastructure to such regions is not just a business but a necessity.
We believe that times of coronavirus could unite people from all over the world. Moreover, they could stimulate a win-win concept in the fintech industry. People have new needs due to their current circumstances. Founders and investors of fintech companies can get their reward if they meet customer expectations today.
Next, we want to look at several hottest fintech startups that influence our common today and lead us to our shared tomorrow.
1. HyperJar
At the time of uncertainty, people are more concerned about their savings and spendings. Consumers are looking for a platform where they can manage their earnings, spends, and savings. It is excellent if this feature has already been integrated into your mobile banking app. UK-based fintech ecosystem HyperJar provides customers with mini-accounts connected to the same payment card. Such an intuitive finance-management system splits up customers’ finances into jars that have their purposes indicated like groceries, presents, or kids. HyperJar gives you control over your everyday financials.
2. JAJA
JAJA Finance is an online-manageable credit card whose primary goal is to simplify customers’ life. The Jaja team reviewed the credit card legacy and rebuilt it according to the clients’ financial challenges and expectations. Service is simple in use, it has a super stylish design, and customers may enjoy benefits and features they would not expect from a credit card. The company makes its services better on an everyday basis. The reason is they have a group of highly engaged customers that help to test new functionality. The main reason why Jaja starts the project is a desire to simplify customers’ experience with personal finances and give people access to more benefits by developing brand new financial technology solutions.
3. Oscar Health
Oscar Health is an app specialized in insurance. This consumer-focused company gives its users personalized service and transparency, providing people with the opportunity to get quality and affordable care. Members of this insurtech service can find a doctor, use a 24/7 Doctor on Call service, and use access to an integrated network of hospitals. The big difference of this startup is members of Oscar receive free doctor visits and speak with doctors via phone free. Among Oscars’ investors are such big companies as Alphabet, Baillie Gifford & Co., BoxGroup. The total funding for this company is near $1.5 billion.
4. Atom Bank
Atom Bank is the first United Kingdom app-only bank that received its license in 2015 and racked up £1.5 billion. Clients can open a savings account and apply for a loan. Moreover, researching mortgages is also as easy as a few swipes on your smartphone. Atom Bank does not have filial, so they save money, and this model allows them to offer more customer-friendly rates. Among its investors are BBVA and British Business Bank Investments.
5. Nubank
Nubank is a Brazilian financial service startup. It offers no-fee credit cards to its clients. Customers can manage their funds through a mobile app. Among investors of this Latin America startup are Goldman Sachs, Founders Fund, and DST Global. The total funding of Nubank is ca. $1.4 billion.
6. Trezeo
As more and more people must work freelance without fixed working hours and guaranteed incomes, gig economy platforms gain popularity. In the UK, 1 out of 10 working-age adults had worked for an online platform at least once a week. Thus, the London-based startup Trezeo is very effective for such kinds of workers. Namely, this app supports those who have unstable incomes: if the workflow suddenly changes and the user needs some financial assistance – Trezeo offers easy-to-get cash injections.
7. Hippo
Insurtech company that offers insurance for homeowners is Hippo. It uses big data (like municipal building records) and access to smart home devices to manage the protection of customer electronic and home offices. This startup is based in Palo Alto, California, United States, and its funding is over $350 million. Among Hippo investors are Bond Capital, Christopher Hill, Dragoneer Investment Group.
8. Grab
Grab is a Singapore-based transportation and mobile payments platform. The startup offers its customers to pay for using private cars, taxis, motorbikes, and carpooling services. This platform is used in Southeast Asia, and its total funding is almost $9,7 billion. Grab features a cashless top-up payment option, provides extra security for users, allowing passengers to share their ride with family and friends via social media or massages. Of course, all users can rate drivers and see drivers’ ratings and about-information. Grab top investors are All-Stars Investment, 500 Accelerator, Booking Holdings, and others.
9. Acorns
Acorns is a startup that represents the idea of focusing on the poor. The company specializes in micro-investing that operates over $1.2 billion. It is a personal finance management tool, and particularly it takes care of low and middle-income households. The main idea of this app is to aid people to manage their money, save them, and invest. Often Acorns users have never invested before. So, the platform’s purpose is to guide the customers on how to perform the investing operations correctly. The main companies that own a stake in the Acorns are PayPal, BlackRock, and NBCUniversal.
10. Robinhood
Robinhood is also a platform that does not use physical offices to serve clients. It is an investment application that enables investment for free. Robinhood makes investing accessible to people who have the potential to trade but can’t pay the fees of a traditional brokerage house yet. Still, you may have margin support and have extended hours trading if you pay for additional service. Last month the total funding of the company was over $1,7 billion. 9yards capital and Arrive Ventures have invested in the company.
11. PrimaryBid
According to the brand-new tendency, fintech applications, on the one hand, tend to meet the customers’ expectations and, on the other hand, expedite cooperation between people. If you want to invest money or you own a company that is looking for investment, now you can use a PrimaryBid application and find what you need. PrymaryBid connects investors with companies that are searching for additional funds. The mobile trading platform is secure, and it also automates the activities of private investors.
12. Transferwise
Transferwise is a platform that transfers money to other users’ accounts all over the world. Every month customers send through Transferwise more than $5 billion. The platform saves its customers $3 million every day, avoiding hidden fees. The total funding of Transferwise is almost $800 million. It is a company that allows people and businesses to have more direct access to each other without using traditional institutions that take high fees for their services. The location of the headquarter is in London, UK.
Invest in FinTech startups or not invest?
2020 has shown that life is unpredictable. Nevertheless, the world economy is moving to the next stage of digitalization. Moreover, the coronavirus pandemic speeded up this tendency of work uberization. All this leads us to a new reality where we should acknowledge that work and life environments will be more and more digitized. Thus, it looks like the investment in new fintech startups is a great idea.
Insurtech, banking, white-label (custom fintech platform for any brand), financial services, investment platforms are hot fintech startup industries. The best fintech startups of 2020 aim to fulfill newly emerged consumers’ needs. However, nowadays, it is not enough to launch another fintech startup without bringing additional value. Due to this reason, before investing in fintech startups, you need to find out what advantages the product will bring to the customers. The most innovative fintech companies and startups that offer stunning resolutions of routine problems and tasks serve as a magnet to the investors. Later these startups also become fintech enterprises bringing new ideas and extra value.
What about starting a partnership
At Kindgeek, we believe that valuable and innovative fintech startups can make the world more reliable and open. Therefore, we are thrilled to join influential ideas and provide value-driven solutions to our clients. We are a fintech software development company, that delivers safe and efficient services protected by cutting-edge security technologies and intuitively designed. With believe in a product-oriented approach and build applications with the focus on end-users. With over 80% of our projects being in fintech, we have gained solid experience developing innovative fintech solutions that resolve core business needs and make a positive difference.
We also provide our own solutions, such as a white label banking platform, which serves as a foundation for digital finance products. The customizable white-label core allows you to build on top of it and create a unique customer experience. No need to start from scratch – go to market quickly and cost-effectively.