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Opinion

Five years on, the first fintech innovators are thriving

To date, the transformation of financial services through new technology has been a success story, but regulators are becoming more nervous.

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In 2014, KPMG published a report on the 50 best fintech innovators as selected on the basis of four factors: total capital raised; rate of capital raising; location and degree of sub-industry disruption; and a subjective call from a judging panel on these companies’ products, service, customer experience and business model innovation.

Back then, the excitement was discernible. Global fintech financing had more than trebled in the prior three years and by 2014 was running at an estimated $3 billion annually.

In 2018, venture capital-backed fintechs raised $40.5 billion, though that pace has slowed recently, down to $15.1 billion in the first six months of 2019, so $30.2 billion on an annualized basis. That’s still 10 times ahead of the rate in 2014.

The Centre for Finance, Technology and Entrepreneurship (CFTE) recently went back to that list of 50 leading innovators to review their progress.

Almost all are still going. Only two have fallen by the wayside. This is an astonishing survival rate for venture capital-backed start-ups, where the rule of thumb is that one third (17 companies) should have gone bankrupt by now.

Unicorns

The survivors now employ 30,000 people.




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