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Monday, May 23, 2022

A Brief Guide on Fintech early start-ups



What is a Fintech startup? For those who are not familiar, a fintech startup is a company that offers financial services via the internet. This includes companies that provide consumer banking and personal finance software or other related products and services. In this article, we will explore some of the most popular Fintech startups in the industry today.

FinTech Market Statistics:

 In 2016, the total value of Fintech deals reached $19.25 billion and over 1479 companies were funded with a combined amount of roughly $14 billion. The average deal size in Q118 was around $13 million, about 15% lower than 2015’s monthly average deal size ($15 million) and 60% below 2014’s monthly average deal size ($33 million). There were 21 initial public offerings (IPOs) in the same period, up from 18 IPOs in 2015, but well below 2014 when 45 startups went through an IPO process. Early-stage venture capital financing increased to more than $12 billion; however, it remains significantly down compared to previous years, such as 2013, when early-stage investments totalled $13.97 billion; and 2014, when early-stage investments totalled $14.96 billion.

The Ability to Deliver Distinct Value:

The first step to understanding the difference between all these Fintech firms is by looking at how they are disrupting different parts of the financial industry. For example, Wealthfront focuses on providing automated investment advice while Betterment does this same thing for retirement accounts. Even though both companies offer similar services – their end goal and target customers could be very different. One company may focus more on investors with a high net worth or an account balance over $100K. In contrast, another firm might consider any investor regardless of the amount invested if it falls within certain guidelines (i.e., 18-34 years old). The point here isn’t just that there are two distinct types of Fintech startups; rather, it shows that several different types all focus on disrupting the financial industry in their unique way.

The following table outlines some of the most popular Fintech startups and what they do:

Startup Name Description Acorns An automated investment app that allows users to invest spare change from everyday purchases into diversified exchange-traded funds (ETFs) Betterment A Robo-advisor that offers tax-loss harvesting, retirement planning tools and sophisticated portfolio management services Wealthfront Another Robo-advisor that is used for managing portfolios consisting of ETFs and individual stocks Plaid This company provides access to banking data via an application programming interface (API). Its goal is to help developers make apps more powerful when connecting with banking services Personal Capital This company offers financial advisors who are accessible through the web, iOS and Android apps. It also has tools for tracking spending trends, among other things.

How to Start a FinTech startup?

Several things play into the success or failure of most Fintech companies. For example, it’s important to manage growth and deal with any scaling issues accordingly. This means understanding where your customers come from (i.e., organic vs paid), how they use your product(s) and what features work best for them to provide optimal customer service support. You should be able to adapt if something isn’t working as expected quickly – whether this is related to user acquisition, retention rates, among other things, all while staying within budget naturally! Lastly, another thing that plays into a successful FinTech startup is having access to capital. After all, there needs to be an initial investment before seeing any return on that investment.

History of the fintech industry:

The financial technology industry is a new and complex space growing rapidly over the last several years. Fintech companies are disrupting traditional aspects of finance by innovating with emerging technologies such as blockchain, artificial intelligence (AI), machine learning, robotics and more. Startups in this space raise money from venture capitalists to get off the ground quickly while also attracting funds from crowdfunding sources like Kickstarter or Indiegogo. They can gain additional capital via online platforms to raise seed-round financing, among other things. In fact, according to CB Insights – there was $12 billion invested into fintech startups during 2016, which was almost double 2015’s total investment amount ($677 million). However, some investors have raised concerns about the fintech industry, including more failures among startups in this space than in some other industries.

Sub-sectors within fintech:

There are several different sub-sectors within the Fintech industry, including payment processing, wealth management technology, and insurance tech. The following are some examples of companies that have created solutions in each space to help customers manage their money more efficiently.

 Payment Processing – Square Capital, for example, offers cash advances and business loans. At the same time, Venmo allows users to transfer funds between friends or family quickly without paying any fees whatsoever. Wealth Management Technology – Betterment is an automated investment platform with tax-loss harvesting features while Personal Capital helps people track spending trends so they can make better decisions regarding their finances Insurance Tech – Lemonade has developed an insurance company that uses AI machine learning algorithms to autonomously price policies based

Mick Pachollihttps://www.tagg.com.au
Mick created TAGG - The Alternative Gig Guide in 1979 with Helmut Katterl, the world's first real Street Magazine. He had been involved with his fathers publishing business, Toorak Times and associated publications since 1972.  Mick was also involved in Melbourne's music scene for a number of years opening venues, discovering and managing bands and providing information and support for the industry. Mick has also created a number of local festivals and is involved in not for profit and supporting local charities.