Money is pouring into growing the thriving FinTech sector. In fact investment in FinTech has risen from $1.8 billion in 2010 to $19 billion in 2015. Why so much investment? From credit loans to financing and paperless funding, technology is propelling the financial services industry and providing consumers and businesses a better way to collect and disperse money. Looking solely at payment processes, global payment revenues are expected to increase 5% over the next five years, with the total expected to exceed $2 trillion by 2019, according to McKinsey.
The global FinTech capitals that have emerged over the years include New York City (the OG finance hub), London (the UK’s FinTech Hotbed) and good ol’ ATL (dubbed “Transaction Alley”). I was personally thrilled to see AdWeek’s recent coverage on Atlanta’s claim to FinTech fame, citing that nearly 70% of all North American transactions pass through payment processing companies headquartered in Georgia’s capital city! Think of all the credit card charges, PayPal spends and Venmo transfers occurring across the country on a daily basis – the majority are flowing right through Atlanta tech companies.
But just like the ever dynamic and evolving tech landscape, tides are a-changin’ for some of these FinTech hubs. San Francisco is sliding to the top of the list, while London’s FinTech reputation is beginning to suffer from post-BREXIT consequences like talent recruitment challenges and regulatory restrictions. But I have a message for those frustrated London-based FinTech leaders:
:::in my Jermaine Dupri & Ludacris voice::: “WELCOME TO ATLANTA WHERE THE PLAYAS PLAY….”
From Silicon Valley through Transaction Alley, up to Wall Street and across the pond, these FinTech companies should definitely be on your radar:
1. Axia (makes its bank out of NYC)
Axial is an online business development platform, as well as a social network of sorts, that focuses on anyone who runs, advises, acquires, or finances private companies. Founded in 2009, it is now the largest hub of its kind.
2. Earnest (shout out to SFO!)
Earnest helps students and graduates refinance their student loans using rich data that other lenders typically don’t consider like employment history, savings patterns and career trajectory. The company is able to provide low-cost loans through software that manages the underwriting processes, eliminating bank costs. Earnest’s goal is to provide borrowers more access to credit by eliminating manual processes and the barriers that millions of people face.
3. Groundfloor (proud to call ATL home)
As the first and only P2P real estate lending marketplace open to non-accredited investors, Groundfloor opens the door to short-term, high-yield returns backed by real estate. Talk about a game-changer!
4. Nutmeg (London-born)
As the UK’s first online discretionary investment management company, Nutmeg eliminates investing intimidation by making it easy for people to create and build a personal savings and investment portfolio. Users just need to input information regarding their financial situation, risk tolerance and how much they're willing to invest, and Nutmeg does the rest.
5.TTV Capital (making Hotlanta even hotter)
Okay, so TTV Capital may not be a FinTech company itself, but this Atlanta-based VC has exciting things in store for this sector. A recent $93 million funding raise rounds out the firm’s total investments to date at $300 million to invest in – you guessed it – early stage FinTech companies like Cardlytics, Exactuals and FinanceIt.
In my role at Alloy, I’ve had the opportunity to grow my expertise within our SaaS practice group, primarily supporting our roster of awesome FinTech and MarTech clients. Over the years, I’ve enjoyed being front and center to witness how SaaS technology enables the previously unthinkable – especially in the financial services sector – and how it improves our personal and professional lives. As one of the biggest financial technology fans (okay, nerds) you’ll ever meet, I’m excited to share my list of top startup companies to watch. The future of FinTech is looking bright, and at ARPR, we’re thrilled to do our part in helping this exciting sector continue to thrive. You can check out our latest results here.