The Fintech Landscape
2015 was an astounding year for fintech startups. In global financial centers around the world, entrepreneurs were busy launching new companies and raising capital. From London to New York and across China, Hong Kong and Singapore, several hundreds of new companies joined a growing number of fintech startups.
Estimated counts from different regional and global lists puts the existing number of fintech startups at anywhere between 5,000 to 6,000 companies, all vying for market share in different sub sectors, ranging from mobile payments, data analytics and virtual banking to online lending, bitcoin applications and crowd funding. In the last five years, investors have poured billions into startups and are now looking for returns.
Mixed Performance
In fintech, the consumer side of the market is especially active. Retail customers are especially enjoying lower fees and lower interest rates by using mobile wallets, mobile payment apps and online lending platforms. The fintech startups providing these services have seen a rising adoption curve, especially among millennials. But for founders and investors, even in the sizzling fintech scene, success is not guaranteed
According to a Morgan Stanley whitepaper published last May, globally, marketplace lending platforms, which include players such as OnDeck and Lending Club, are forecasted to see loan issuance grow at a 51% CAGR between 2015 and 2020. Both Lending Club and OnDeck were first movers in the marketplace lending space and have become recognized brands in fintech. The companies were touted as unicorns for their high valuation. Both also went public almost a year ago, and as of December 31, 2015 both have seen their share prices drop more than 50% compared to their IPO open price. Despite the growth in marketplace lending, the public markets see risk in the underlying loans.
Venmo, the mobile payment app startup, was acquired by […]
