Fintech is a sector that thrives only through innovation. It’s in constant flux; changing and evolving all the time. While we can see spikes of activity and the general trajectory, it’s hard to predict what lies ahead just by taking a high-level view.
To get a more accurate picture you need to drill down and analyse some of the startup companies that have gained traction with global startup investors; individuals such as
Tom Chapman of Matchesfashion, Yuri Milner of Digital Sky, Fabrice Grinda and
Peter Thiel who founded PayPal. The sums injected and the calibre of investor in these companies tells you that they are the true predictors. Here are four of the most interesting.
Stripe has been around since 2010 – a long time in fintech terms – and it has sailed under the radar for much of this period. But in the middle of last year people started to take notice when the business secured a whopping $250m investment from Tiger Global
Management. Tiger has gone on to top that sum up with another $100m and the business is now valued at $22bn.
Stripe shows us that small companies want white label fintech solutions that don’t shout someone else’s brand all over their website. But even more, it tells us that buying habits are changing. Stripe empowers businesses to sell worldwide. At the same time,
consumers are demanding unique and unusual products. Home-grown goods are no longer enough - consumers want to shop the whole world. This may mean that the retail landscape is set to change dramatically with a new wave of disruptive, global, consumer-facing
businesses bursting out of emerging nations.
International Property Securities Exchange (IPSX)
Acquiring property has been one of the most popular and lucrative financial activities of the last 50 years, worldwide. But London-based IPSX is about to take this to the next level by launching the world’s first securities exchange dedicated to companies owning
single commercial real estate assets. The company now has its first sign up with British Land committing an iconic property to float via a Special Purpose Vehicle.
IPSX has shown true grit during the five-year regulatory-approval process, and their determination to succeed might well open the floodgates for the creation of other markets for new asset classes. But in terms of the future of property, IPSX signals that we’re
looking at a new world order for property. In years to come it’s likely that individual properties will be held by and operated in the interests of shareholders, democratising large-scale developments and potentially opening up exciting new ventures, designs,
uses and facilities across the world.
Brex is a San Francisco-based fintech founded by two of the very youngest entrepreneurs around: Henrique Dubugras, aged 23, and Pedro Franceschi, aged 22. Brex has shot out from obscurity to reach a valuation of $1.1bn in little over a year thanks to significant
investments from high-profile figures including Yuri Milner, Max Levchi and Peter Theil.
Brex is unique in that it offers a credit card facility designed specifically for startups. But rather than the credit limits being based on the personal financial stability of the founder, Brex underwrites the company not the entrepreneur. What Brex tells
us about the future is that we’re about to pass the stage where entrepreneurial businesses are always deemed risky and we’re heading towards a time where banks may begin to favour innovative startups with good ideas over less-agile established businesses.
Raisin is a fintech startup that’s just about to hit the big time. Fabrice Grinda was an early-stage investor and this week it was announced that the Berlin-based company has raised $114m in Series D funding with further injections from industry names including
PayPal. Founded in 2013, Raisin has gained traction in large part because of renewed focus on the future of the European Union.
Raisin allows customers to see savings rates being offered by individual banks and providers across Europe, and to shop around for the best deals regardless of which of the 31 EU countries they’re living in. It also allows customers to open accounts with these
providers via the platform. Raisin is slowly creating a European single market for savings, and it’s easy to see where next. Driven by open banking regulations, Raisin makes it much easier to envisage a true single market for banking in the future.There can
be no doubt that innovative fintechs are changing the world. But at a time when a new fintech is born every day, to really predict the future we need to stop looking at the whole landscape and start watching individual investors. Tracking their activities
can help us predict what lies ahead for us all.