Jan 2015: FinTech Market Update
As we enter the new year, the Venture Scanner Financial Technology scan is currently tracking 1,042 companies across 17 categories (and counting). Of the 1,042 companies, 481 have publicly announced funding of more than $15B in aggregate. Check out a snapshot of the FinTech scan below:
In addition to tracking companies in the FinTech universe, the scan keeps tabs on news events across the industry. A couple trends observed over the past quarter:
P2P/ Online lenders are raising a lot of money and are in a strong position to expand further: The world’s biggest P2P lending platform, Lending Club, had a successful IPO, raising $870M. The company also recently announced a partnership with Google to provide long-term financing to Google’s business partners. SoFi, an online lender, also raised a $80M Series C round with intentions to expand beyond student loans into home mortgages. In addition, OnDeck Capital and AvantCredit raised $200M (IPO) and $225M (Series D) respectively in the past quarter. With massive injections of capital, these next-gen lenders are poised to further eat into the market share of incumbent banks.
The battleground for US mobile payments heats up with industry behemoths making their moves: Everyone wants a slice of the US mobile payments space and the lines are being drawn between three major groups — mobile platforms (with Apple Pay, Google Wallet), carriers (with Softcard), and retailers (with CurrentC). While Google Wallet has had limited success since launching in 2011, Apply Pay appears to be enjoying some traction. After the launch of Apply Pay, the consortium of retailers behind CurrentC began blocking Apple Pay by modifying their terminals to block NFC payments (which would also block Google Wallet). CurrentC is currently in development; its launch would be something to watch – with Apple/Google controlling the platform, could they (especially Apple) retaliate by banning CurrentC from their app stores? Yet, merchants sit on a key part of the distribution of physical goods; passing down cost savings to consumers could be a huge pull.
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