Financial Technology Sector Overview - Q4 2017

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As we’ve examined in our previous analyses, the overall funding trends in Financial Technology (fintech) are stable and its exit activity is seeing robust growth, indicating that the sector is maturing as a whole. Yet what are the different components of fintech and how do they make up this startup ecosystem? On our fintech research platform, we have classified the companies in the sector into functional categories. This blog post aims to examine these categories and how they compare with one another through a series of graphics.

Payments-Related Companies Form the Largest Fintech Category

Let’s start off by looking at the Logo Map for the fintech sector. As of January 2018, we have classified 2,285 fintech startups into 16 categories which collectively raised $80 billion in funding. The Logo Map highlights the number of companies in each category and a random sampling of these companies. Please note that, for the sake of brevity, certain related categories have been combined into the same box on the Logo Map. Examples include combining Business Lending and Consumer Lending into Lending, and combining Consumer Payments, Payments Backend, and Point of Sale Payments into Payments.

Financial Technology Logo Map

We have seen what the different categories in fintech are and how many companies are within each category. What about their funding and maturity in relation to one another? Let’s look at our Innovation Quadrant to find out.

Most of the Fintech Categories Are Pioneers

Our Innovation Quadrant for the fintech sector divides the categories within the sector into four different quadrants according to their average funding and average age. The Heavyweights are the categories with companies that have reached maturity with significant financing. The Established are those that have reached maturity with less financing. The Disruptors are less mature but with significant financing. The Pioneers are less mature and with earlier stages of financing. 

Financial Technology Innovation Quadrant

We can see from our Innovation Quadrant above that most of the categories within fintech belong in the Pioneers quadrant. The Point of Sale Payments, Business Lending, Consumer Payments, and Consumer Lending categories have raised more funding and are in the Disruptor quadrant. Infrastructure and Transaction Security are the most mature categories with less funding. Payments Backend is in the Heavyweights quadrant for having reached maturity with significant financing.

We've now seen how the fintech sector is categorized and the relative stages of innovation for those categories. How do these categories stack up against one another in a holistic view? Let’s look at the Total Funding and Company Count Graph for Fintech.

Consumer Lending Is the Leading Fintech Category

The graph below shows the total amount of venture funding and company count in each fintech category.

Financial Technology Total Funding and Company Count by Category

We can see from the graph above that the Consumer Lending category leads all the other fintech categories by a substantial margin, with a total funding of $24 billion and 302 companies. This category is comprised of companies that offer new ways for consumers to obtain personal loans and have their credit risk assessed. Some example companies in this category include SoFi, Avant, CommonBond, and Affirm.

Conclusion: Lending and Payments-Related Categories Dominate Fintech

The graphics above indicate that the Consumer Lending category stands out against other fintech categories in terms of funding and company count. Moreover, other lending and payments-related categories have also acquired significant financing. It will be interesting to see how this sector turns out in 2018.

To learn more about our complete Financial Technology report and research platform, visit us at or contact us at [email protected].

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