Increasing connectivity and technology penetration is revolutionizing the way people handle money. This shift in the society is fueling the growth of fintech companies. According to a survey conducted by Plaid and The Harris Poll, 59% of Americans are relying on fintech apps to manage money more during the COVID-19 pandemic. According to market research firm IDC, fintech is expected to achieve a compound annual growth rate (CAGR) of 25% through 2022, reaching a market value of $309 billion.
Fintech companies have grown to encompass a range of consumer-based applications and services that can be used to trade stocks, manage funds, insurance and investments. One of the biggest fintech products is digital payment. Its total transaction value grew to $5.2 trillion in 2020, and it is projected to reach $6.6 trillion in 2021
The industry is experiencing a merger of finance, technology and entertainment. A 2019 survey conducted by PwC recorded that 47% of TMT (Telecom, Media & Technology) and FS organizations have embedded fintech into their operations.
A joint study by the World Bank, the Cambridge Centre for Alternative Finance at the University of Cambridge’s Judge Business School, and World Economic Forum showed that fintech companies on average saw their transaction volumes increase by 13 percent in the first half of 2020 compared to the same period in 2019.
Artificial Intelligence and machine learning will further increase the penetration and efficiency of the fintech market.
About 85% of financial executives plan to increase their investment in artificial intelligence, a study by the Economist Intelligence Unit(EUI) shows. A survey by Deloitte Insights suggests that about 70% of all financial services firms are using machine learning to predict cash flow events, calculate and refine credit scores and detect fraud.
Companies like Ant Financial, PayPal, and Oscar continue to dominate the Fintech industry. They are among the 15 fastest-growing fintech companies.
In this article, we will rank and evaluate the 15 fastest-growing fintech companies based on their valuation and market caps.
15. TALA (Private)
Valuation: $560 Million
Since its official launch in 2011, Tala has grown to be one of the 15 fastest-growing fintech companies. Its headquarters are in Santa Monica, U.S. Tala offers credit and microloan services to people worldwide for payment of rent and electricity. The company ranks 15th on the list of 15 fastest-growing fintech companies.
Their app collects data from the borrower’s smartphone and ascertains his creditworthiness almost immediately. The goal of the CEO, Shivani Siroya, is to empower 2.5 billion people across the globe by giving them loans that traditional creditors would not ordinarily give. In 2019, TALA raised $110 million in funding. This round was led by RPS Ventures.
14. BRAINTREE (Private)
Valuation: Acquired by PayPal for $800 Million
Bryan Johnson established Braintree in 2007. It is a platform that allows businesses to accept payments from their customers over the internet. The organization has currently expanded to processing transactions in over 45 countries as of 2020. Braintree’s products help companies that operate online. It acts as a marketplace to foster security, prevent fraud and safeguard user information. The company ranks 14th on the list of 15 fastest-growing fintech companies.
13. AVANT (Private)
Valuation: $2 billion
Avant is a private Fintech company based in Chicago, Illinois, United States of America. It was founded in 2012 by serial entrepreneurs Albert Goldstein, John Sun, and Paul Zhang.
Their primary aim is to give out loans to consumers by collecting their data online to check their creditworthiness. The company started by providing loan services in just 16 states but has grown to cater to 46 states in the USA. It has expanded to Canada and the United Kingdom. Recently, Avant announced that it has expanded its portfolio and has reached 1.5 million customers
With Avant’s impressive success over the years, the company acquired ReadyForZero in 2015. The acquisition of the debt management app was a move to lower costs and barriers to borrowing. Avant’s revenue increased from $121.3 million in 2018 to $400 million in 2020.
12. Oscar Health Insurance Co. (Private)
Valuation: Over $3 billion
OSCAR is a Fintech company founded in 2012 by Mario Schlosser, Kevin Nazemi, and Josh Kushner. It uses telemedicine, the practice of caring for patients remotely when the provider and patient are not physically present with each other, as one of its major products.
Oscar health promotes healthcare focused tech interfaces. It hopes to achieve a transparent billing system for patients. In 2020, Oscar made a 54% increase in revenue and has continued to make ground-breaking impact in the health sector.
11. Social Finance (Private)
Valuation: $4.3 billion
Social Finance is a financial technology company that aims to provide student loan financing, personal financing, and mortgage financing. It was founded in 2011 by Mike Cagney, Dan Macklin, James Finnigan, and Ian Brady in San Francisco, California. It ranks 11th on our list of 15 fastest-growing fintech companies.
It has partnered with Coinbase to provide cryptocurrency trading services in addition to its credit facilitation. Although the company struggled with making profits around 2018, it has experienced an interesting comeback.
10. Morningstar, Inc.(NASDAQ:MORN)
Market Cap: $10 billion
Morningstar is a financial services firm that provides investment research and management services to consumers. It was established in 1984 by Joe Mansueto. The company’s headquarters is in Chicago, Illinois.
Although Morningstar did not start as a full fintech firm, it is now offering fintech services at various locations. It provides software and data platforms for investment professionals with products like Morningstar Direct and Morningstar Advisor Workstation. Morningstar is doing quite well despite the competitiveness of the Fintech industry and has recorded a 22% revenue increase in 2019.
9. Klarna Bank AB (Private)
Valuation: $11 billion
Klarna Bank AB, also known as Klarna, is a Swedish bank that primarily operates online to provide online financial services to businesses and consumers by reducing the risks of online payments.
Their core service is handling customer payments, thereby eliminating the financial risks for both the seller and buyer. It was founded in 2005 by Sebastian Siemiatkowski and Michael Moritz. Klarna. The company recorded a 36% growth in their revenue in 2020.
8. ZhongAn Online P & C Insurance Co., Ltd. (HKSE: 6060.HK)
Market Cap: $13 billion
ZhongAn is an insurance company that caters to the local Chinese market and also provides fintech services. The company aims to provide insurance services online as opposed to the usual traditional insurance.
ZhongAn mainly focuses on lifestyle consumption, consumer finance, health, auto, and travel. It was founded in 2013, and the CEO is Jin “Jeffery” Chen. It ranks 8th on the list of the 15 fastest-growing fintech companies.
7. CHIME (Private)
Valuation: $14.5 Billion
Chime provides free financial services without a fee to its customers through their mobile app. Its headquarters is located in San Francisco, California. However, it does not operate any physical branches.
The startup was founded by Chris Britt (CEO) and Ryan King (CTO) in 2013 to serve as an alternative to customers instead of operating a traditional bank. It has also launched SpotMe, a free overdraft service that allows customers to overdraw their accounts without charges.
The company has grown significantly since its launch in 2018. It acquired Pinch, a startup whose goal is to help young people build and manage their credit scores. In 2019, Chime recorded a $200 million revenue which was a 100% increase from the previous year’s revenue.
6. Xero Limited (ASX: XRO.AX)
Market Cap: $18.36 billion
Founded in 2006, Xero ranks 6th on the list of 15 fastest-growing fintech companies. Xero is a New Zealand-based technology company that is currently listed on the Australian securities exchange.
Its headquarters is in Wellington, New Zealand. Xero provides an accounting software platform to enable small and medium scale businesses to seamlessly carry out their operations.
The startup has offices worldwide, including in South Africa, Canada, United Kingdom, United States, and Australia. In 2020, Xero recorded a 21% increase in revenue from its 2019 revenue.