20 FinTech Startup Companies to Know
The digital age is blazing a path for the fintech niche. It should not be a surprise that investing apps like Robin Hood and Acorns are booming. After all, the tech-savvy millennial generation has come of age. They are making money, and they are investing it. And one thing is for sure─the stuffy suits and outdated banking models just won’t do.
In fact, when it comes to finance, there seems to be an app for everything from getting a loan to trading stocks. Let’s take a look at a round-up of fintech startup companies that you need to keep your eye on.
Related: Why Banks Embrace Cryptocurrency
What is the Fintech Industry?
Financial Technology (Fintech) is a collection of companies that utilize the latest technologies to disrupt traditional financial services. In most cases, these startups directly compete with existing financial institutions, offering a new way to do the same things. The novelty and accessibility seem to attract droves of customers, which help make these startups suitable investments.
The term fintech first popped up around 2010─and today; it’s a whole industry. Fintech covers innovative services in investments, banking, financial literacy, insurance, and cryptocurrencies. While the term fintech was first used to describe the computer technology driving banking, today, it represents a new wave of financial services built on the tech-savvy business model.
For decades the financial world has been stagnant. Banks, mortgage companies, and insurance providers have been slow to adopt new technologies. But further growth in the Fintech sector is forcing their hand. Chase bank was one of the first traditional banks to launch a mobile payment solution. In the coming years, the older companies will adapt to meet the demands of consumer growth or become obsolete.
Popular Fintech Startups Getting Attention in 2021
From effortless savings to mobile banking and simple insurance transactions, technology is changing the game for how consumers spend, invest, and save money. While many of these companies have been around for a few years, many are gaining attention for new services, and many more have recently risen to fame.
Digit is a San Francisco, CA-based company that is in business to make saving and investing more accessible. It is an app that moves small amounts of money into user-specified savings categories based on individual spending patterns. Digit is suitable for automating savings, paying down debt effortlessly, and setting up financial safeguards. However, it does come with some risks by allowing a third party to access your banking accounts, and there is a $5 monthly service fee.
Robinhood has been making big waves lately by disrupting the investment world. It is a commission-free investing app designed to make investing more accessible. That means there are no minimum account balances and no special status requirements. For the first time, small investors can get a fair shot at the market. Despite the apparent benefit of accessibility, Robinhood offers virtually no customer support either by phone or live chat.
Chime is changing the game of mobile banking. The company appeals to a broader audience by offering optional early payday loans with direct deposit. Chime offers a no-fee and automatic savings account models with no limits. The most significant drawbacks of a Chime account or limited access to cash deposits, various service fees, and out-of-network ATM charges.
Riskified is an e-commerce software that helps protects online businesses from fraudulent transactions. Riskified helps weed out potential fraud from legitimate shoppers while simultaneously offering a more robust checkout experience for verified transactions.
Pitchbook is a Seattle-based company offering a private-equity database so that you can have real-time stock market data available on your desktop or mobile device. Through access to the data that matters, investors can gain insight into trends and actionable purchases to reach their financial goals. The data that pitchbook provides helps clients nail pitches, effectively fundraise for campaigns, grow their business, and make exceptional deals.
Pitchbook offers a comprehensive database with a user-friendly interface. On the downside, there seems to be some lag in updating financials on the platform, and some of the AI features are still clunky.
Unbanked is revolutionizing financial access using blockchain technology. They offer a wide range of services for modern banking, including banking with borders, virtual debit cards, rewards for spending crypto, and an easy way to buy, sell and trade crypto with no hidden fees. Learn more today!
Kraken is a San Francisco-based cryptocurrency exchange platform that is leading European markets and comes in second only to Coinbase in the US. In September 2020, the platform became the first cryptocurrency firm to receive a banking charter─opening the door to new possibilities.
Hippo is using AI to change the game for the insurance world. By pulling data from satellites, public databases, and customer habits, among other sources, the app streamlines buying and selling insurance products, filing claims, and more.
Monzo is a European mobile-only banking company. Monzo makes it easy to spend, save, and manage your money from a convenient mobile app. The app gives the user complete flexibility over their savings by allowing them to organize their money into pots for different purposes. Plus, they make it easy to travel around the world with your money. Monzo does not add any transaction fees to currency exchanges. Monzo also makes it easier to split bills with friends and many more features.
Braintree is a backend online payment system that allows the e-commerce world to accept payments through Paypal, Venmo, credit, debit, and digital (Apple Pay and Google). Braintree is under the Paypal umbrella, a well-known brand in the fintech industry. And they extend the same level of white-glove service to their customers, making Braintree a premier choice for many e-commerce retailers.
Originally a payment processor for e-commerce, Square is making a move into mobile banking with a launch planned by the end of 2021. Square now offers both e-commerce and point-of-sale payment options for businesses of all kinds, making it a solid contender for the well-established Paypal.
Remitly is an international funds transfer solution to send money to friends and family around the world. They promote a simple platform with low fees that allow users to perform bank deposits, cash pickups, mobile money, and home delivery.
Roost combines innovative home technology with the insurance industry to offer smart, real-world services for residential and commercial properties. Some of the key benefits include efficiency in process claims for faster payouts and better customer engagement. It is smart for property owners and smart for insurance providers.
Lemonade is another fintech startup that is shaking up the insurance industry. You can get any kind of insurance that you need, from affordable renters policies to pet and term life insurance. They focus on fast and affordable to take the typical hassle out of a frustrating system.
Crowdfunding has revolutionized everything from real estate to investing and savings. The insurance industry is no different. Teambrella uses peer-to-peer coverage to solve the natural conflict between insurance companies and policyholders. The companies technology is built on blockchain for sustainable security and uses a voting mechanism to maintain mutual control.
Spring Labs is a backend data security venture that bridges the communication gap between companies to reduce liabilities. It is used primarily by lenders who need to evaluate the creditworthiness of borrowers to make lightning-fast lending decisions.
BlueVine is a business investing and funding startup catering to small businesses. With a full range of services, BlueVine helps businesses with everyday services to manage their cash flow. Innovative services include business checking, lines of credit, invoicing, and other financial services.
Atom Bank is reimagining banking in the UK. They undid the archaic brick-and-mortar banking model in favor of an app-based bank. They offer specific services like savings and mortgage lending, but they meet customers where they are on their smartphones. With lower overhead, they can pass significant savings and fewer fees on to their customers.
Klarna is a financing app for modern e-commerce. They allow buyers to break everyday purchases up into installments. Klarna comes in app form so you can shop online and in-store. Shoppers enjoy the convenience of flexible financing while earning rewards.
Toast is a point of sale system for the foodservice industry. One system integrates business recordkeeping and inventory, customer payments, and workflow processes to run a better business. Toast offers scalable solutions for every size of business.
Revolut bills itself as the UK’s fastest-growing financial super app. Users can exchange, send, and receive money. Revolut offers a wide range of services to match modern consumers’ needs. The app is packed with budgeting tools, currency conversions between cash and crypto, free accounts, global and cross-border transfers, money tools for kids, and the ability to split checks.
Related: Cryptocurrency is a New Asset Class
The Future of Fintech Investments
We are not sure if it is the volatility of markets amid the COVID-19 pandemic or a true change in the tides. However, it appears that investors are shying away from newer fintech startups in favor of slightly more established fintech investments. In the first half of 2020, fintech investments dropped by almost 39% compared to the same period the previous year.
In fact, more than $1.8 billion went to the top five investments, with smaller shares going to all other fintech startups. The good news is that the coronavirus pandemic has sped things up for the fintech niche. More consumers are demanding digitization of their money in the interest of public health.
Fintech is driving change in the banking sector through the growth of challenger banks. These small to medium-sized institutions bring more diversity to the market. They first popped up following the 2008 financial crisis and have since really found their foothold in the UK market. New niche and community-focused banks are also paving the way for a new era of banking, specifically online and app-based banking. Meanwhile, the existing large branch banks will continue to work towards digitizing their services.
Consumers will move towards the widespread adoption of digital wallets. This digitization will enable real-time transactions and cross-border payments, making older services for processing payments and transferring money obsolete.
More peer-to-peer lending options will become available as consumers choose to turn away from traditional lenders and work within systems that offer more control and more transparency. And at the same time that consumers are moving away from traditional lines of credit, a new era of lending has come to light. Almost everywhere you shop, there are options for buy now and pay later or installment payments. These options are expected to continue to grow.
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Investments are also seeing their own revolution in the digital age. Apps like Robinhood are removing barriers to traditional investments. We can expect to see more disruptive change that helps new populations build wealth and financial literacy.
Other Trends to Watch
Across all segments of the Fintech industry, there are some common themes to be on the lookout for. This tends to include autonomous finance, blockchain integration, artificial intelligence, and an increasing co-dependence between the tech world and the finance world. Consumers are already enjoying many of these trends. Apps like Digit and Acorns help individuals automate savings using artificial intelligence to make saving simple and effortless. We are also seeing big Tech names like Apple and Google embracing a transition into the world of finance.
Technology is changing the future of finance. From app banking to non-traditional lending sources and new ways to get insurance, these new startups are shaking things up for the well-established companies in these niches. The big names like Chase Bank, Wells Fargo, and State Farm will have to pick up some steam in order to compete. Millennials now make up the most significant section of consumers. Between them and every generation thereafter, technology comes naturally as an integrated way of life.
Unbanked is introducing a new banking experience using blockchain technology. With a wide range of products catering to both consumers and businesses, Unbanked is modernizing your money. Learn more today!