In October 2018, CB Insights announced our second annual Fintech 250 — a list of the 250 most promising financial services technology companies across the globe. We take a look at where these companies are now.
In 2018, companies from 31 countries and 19 categories — spanning payments, digital banking, insurance, and more — made it onto the CB Insights 2018 Fintech 250 list.
These companies were selected by CB Insights’ Intelligence Unit from a pool of nearly 4,000 applicants and nominees. The selection was based on several factors, including company-submitted data, business model, tech innovation, marketplace momentum, team strength, and more.
Click to enlarge.
Today, 22 of those companies have become unicorns, 17 have exited, and none have shuttered operations. All told, they raised over $15B in 2019, in addition to forging new high-profile partnerships, spinning off new ventures, and evolving their products and strategies.
Below, we dive into where the Fintech 250 Class of 2018 startups are now.
Our call for submissions is now open for the third annual CB Insights Fintech 250 list. You can apply on behalf of your own company, your portfolio companies, or your partners here.
Highlights from the fintech 250 Class of 2018
- Unicorns: 22 of the 2018 Fintech 250 went on to become unicorns with a $1B+ valuation (an 8.8% hit rate)
- Exits: 8 have gone public and 9 have been acquired
- Deaths: 0 of these companies have died
- Deals, funding, and mega-rounds: In 2019, the 2018 Fintech 250 raised $15.3B across 152 investments, including 52 mega-rounds ($100M+ investments)
- Notable partnerships: Financial incumbents are some of the most active partners for the 2018 Fintech 250
- Notable business models & product development strategies: Business lines are blurring as consumer-facing 2018 Fintech 250 startups look to “rebundle” the bank — and many are borrowing from the same product playbook
Of our cohort of 250 fintech startups, 22 have achieved $1B+ valuations since we announced the list in October 2018. Two of these unicorns have already exited: Plaid was acquired by Visa in January 2020, and Bill.com held an IPO in December 2019.
Click to enlarge.
Two of the most recent unicorns are vertical payments processor Flywire, which raised a $120M Series E from Goldman Sachs, Temasek, Tiger Global, and Adage Capital Management in February 2020 at a $1B valuation, and point-of-sale payments startup Pine Labs, which closed a corporate minority round from Mastercard in January 2020 to reach a $1.6B valuation.
The largest IPO was Lakala Payment, which went public on the Shenzhen stock exchange in April 2019 and saw its valuation climb to approximately $2B following its initial public offering. Recently, Lakala Payment has been trading at a market cap of roughly $4.5B, well above its pre-IPO valuation of $1.6B (as of February 2020).
B2B payments platform Bill.com went public on the NY Stock Exchange in December 2019, raising $216M at a $1.6B valuation. The Palo Alto-based company raised $311M in total disclosed financing before its IPO. It was also one of the 22 unicorn births since the 2018 Fintech 250 was announced.
Nine of the 2018 Fintech 250 startups have been acquired.
In January 2020, Visa announced a $5.3B bid for fintech infrastructure utility Plaid — a deal worth nearly 2x Plaid’s previous $2.7B valuation from December 2018. It is the largest exit of a 2018 Fintech 250 company to date.
In 2019, the 2018 Fintech 250 raised $15.3B across 152 investments. Of these, 52 deals were $100M+ mega-rounds, up from 39 mega-rounds in 2018.
A handful of 2018 Fintech 250 companies that were already unicorns have picked up mega-rounds since selection and seen their valuations grow, including Stripe ($35.3B valuation) Robinhood ($7.6B) and Klarna ($5.5B). Most recently, Revolut raised a $500M Series D in February 2020 to reach a $6B valuation.
Some of the most frequent partners for the Fintech 250, and fintech startups generally, are financial incumbents. Since being selected, Class of 2018 companies have announced multiple partnerships with top-tier financial incumbents.
The demand from incumbents is aligned with a broader industry initiative to upgrade legacy technology, as well as incumbents’ sizable IT budgets dedicated to integrating new technologies. According to CB Insights market sizing data, the global market for IT for banking, financial services, and insurance (BFSI) industry is projected to reach nearly $150B by 2022.
Since January 2019, Citi has announced partnerships with capital markets tech companies Capitolis and Kantox and treasury risk management software Kyriba. JP Morgan has also partnered with Kyriba, as well as with invoice automation software Billtrust to build on its business payments network.
White-label bank infrastructure provider nCino, which is built on Salesforce’s financial services cloud, has announced partnerships with several banks globally, including Spanish bank Santander, Canadian bank Alterna Savings, and Irish bank Allied Irish Banks. Santander is expanding its existing relationship with nCino, deploying nCino’s bank operating system product to subsidiary Santander UK.
Cloud-based digital lending platform Roostify has been integrating with some of the largest mortgage lenders. Ellie Mae, which processes ~35% of all US mortgage applications, announced a bi-directional integration with Roostify, streamlining Ellie Mae’s loan application workflow and fortifying Roostfy’s lending data. Mortgage banks TD Ameritrade US and HSBC US also both partnered with Rootstify to digitize their mortgage origination workflows.
notable Business Model & Product developments
Fintech business models are evolving to meet customer demand. Companies are blurring business lines as they move to multi-line product offerings, launching new products, and expanding geographically. Here are a few themes we’ve seen from the 2018 Fintech 250.
Business model: Mono-line to multi-line solutions
Many of the consumer-facing Fintech 250 startups launched as mono-line businesses to attack a core pain point for customers. As their original businesses have scaled and reached critical consumer mass, many have begun to move to a multi-line business model to “rebundle” the bank.
Wealthfront, for example, initially launched as a robo-advisor to help customers passively invest for retirement. Since October 2018, Wealthfront has added self-service wealth planning tools, announced plans to move into mortgages, and moved into banking. One of its most viral launches was a high-yield savings account product, which saw nearly $1B in deposits in its first months. Wealthfront is also working on launching a debit card to move from passive to active financial management.
Product launches: debit cards, high-yield savings, and crypto trading
This “rebundling” trend is seeing heavy concentration around bank accounts, especially as regulations like Open Banking have made it easier to launch bank accounts. Moreover, bank accounts are a stickier product than lending, which clients typically only need at a specific point in time (not continuously).
A handful of 2018 Fintech 250 companies have announced plans to move in to banking with a debit card or high-yield savings account. Micro-investing apps like Acorns and Stash, which started off targeting customers without any savings, now offer debit cards and checking accounts via partnerships with banking-as-a-service middleware providers and chartered community banks.
In October 2019, Credit Karma announced it was launching high-yield savings accounts to move from credit monitoring to savings management. In the same month, small business lenders Kabbage and BlueVine both announced plans to offer banking services to SMBs. Kabbage launched Kabbage Payments, a payment processing solution that helps SMBs get paid faster, while BlueVine launched BlueVine Business Banking, a Mastercard debit card, and a 1% APY interest business checking account.
Prior to announcing it was launching crypto trading in December 2018, Robinhood reported having 3M customer accounts. Following the launch, more than 1M people signed up for the waitlist within the first week. In January 2020, Robinhood reported it has crossed 10M accounts.
Business model & product growth: global expansion
Digital-first challenger banks have been some of the most active companies expanding their global footprint.
On the B2B side, payments platform Stripe has been expanding domestically and internationally. In September 2019, Stripe announced it was opening a New York office and hiring for new product lines in banking. Abroad, Stripe has been expanding coverage of core services, recently expanding into Poland, Estonia, Latvia, Lithuania, Slovakia, Slovenia, Greece, and Portugal.
The entire 2018 Fintech 250 list and collection are available here. Apply to be part of the next Fintech 250 cohort here.
This report was created with data from CB Insights’ emerging technology insights platform, which offers clarity into emerging tech and new business strategies through tools like:
- Earnings Transcripts Search Engine & Analytics to get an information edge on competitors’ and incumbents’ strategies
- Patent Analytics to see where innovation is happening next
- Company Mosaic Scores to evaluate startup health, based on our National Science Foundation-backed algorithm
- Business Relationships to quickly see a company’s competitors, partners, and more
- Market Sizing Tools to visualize market growth and spot the next big opportunity