7 Emerging Startups in Fintech Space
Fintech is one of the most exciting sectors of the innovation economy. We are seeing a financial revolution as a result of tremendous technological advancements and the pandemic’s drive for more cashless transactions. It is no surprise that
- Out of 907 unicorns, 187 unicorns are in fintech space (20%)
- 6 out of 12 most valued startups are in the fintech space
- Stripe is the 3rd most valuable startup in the world
In 2021 (till date), 3,829 companies raised more than $105.8 billion in funding, compared to $44 billion raised by 2,959 companies in 2020. Furthermore, the median deal size is $5 million with a median post-money valuation of $50 million (Deal size in 2020 was $3.10 million with a median post-money valuation of $21.18 million). Check out deal counts and capital-raised statistics over the last 10 years.
Some of the top companies in the fintech space are:
Since fintech is such a vast field, it is impossible to cover everything in a single article. I’ll be concentrating on several developing fintech areas that are transforming the financial sectors:
- BNPL (Buy Now Pay Later) — Customers pay by installments over time (Estimated market size - $20.40 billion by 2028)
- Digital Remittance-Remit money from one country to another seamlessly (Estimated market size — $42 billion by 2028)
- B2B payment-The global B2B payment market is $38 trillion opportunities. The share of cheque payment is reduced to 42 percent.
- Credit Score-Alternative Credit Scoring is growing rapidly as technology enables the inclusion of subprime consumers
Today, I would like to share some emerging startups in the fintech space on the above-mentioned sub-themes.
- Plentina (www.plentina.com)
Plentina, founded in 2019, enables consumer lending (BNPL) in emerging economies based on prior retail purchase history and mobile behavioral data. The company launched its product in the Philippines (population of 108 million with 2% credit card penetration) and is gearing up for the next launch in Vietnam. Plentina has raised $5.7 million in seed funding so far, including $2.2 million in November 2021.
2. Kafene (www.kafene.com)
Kafene is a financial technology company that empowers flexible ownership solutions. The company offers point-of-sale financing market, providing the underbanked (subprime) users with interest-free buy now, pay later (BNPL), and lease-to-own options. The company’s core product is a digital web and app-based lease-to-own platform that underwrites, approves, and enables payment. Kafene has raised $32 million funding, in addition to a $60 million credit facility from Credit Suisse and Hudson Cove Capital Management.
3. Palla (www.palla.app)
Palla enables instant P2P payments from the US to other countries, enabling customers of foreign banks, Fintechs, or issuers to receive money from their friends and family in the US. The company is building an API platform to build a secure network. The company has raised undisclosed amounts in seed rounds to date.
4. Lemonade Finance (www.lemonade.finance)
Lemonade Finance is a digital bank for the African diaspora. The company offers its users accounts in their country of residence and country of origin for personal and business banking needs. There are over 20 million African immigrants in North America and Europe alone. Lemonade has currently launched operations in Canada and plans to expand into the United Kingdom. The company has raised $725,000 in the pre-seed round in October 2021.
5. Plastiq (www.plastiq.com)
Plastiq has integrated B2B payments and financial automation for Small and Medium Businesses (SMBs). The platform allows SMBs to pay their suppliers through credit cards. The company provides its customers with workflow automation, working capital, cash flow visibility, and a data-rich experience, all built on robust technology infrastructure. The company has raised $144.42 million in funding so far, including $75 million in the Series D round.
6. Novo Credit (www.novacredit.com)
Novo Credit is a global credit reporting platform designed to solve the problem of credit access for immigrants. The company is trying to make credit history accessible globally. Novo Credit sources the data from the credit bureau where the records are originating and computes a Novo score for the business that requests the data. The company has raised $69.59 million, including $50 million in Series B funding.
7. Bueno Finance (www.buenofinance.in)
Bueno Finance is building a credit building platform for blue-collar workers in India, one of the largest segments. The company offers BNPL products over UPI (Unified Payments Interface) for the blue-collar segment. Many blue-collar workers are not eligible for a credit card and fail to avail themselves of many credit facilities. So far, the startup has received $3 million in seed capital.
Fintech is an interesting sector as it has a big social impact. I will try to cover some other emerging fintech startups in another article.
