With the technological advancements in the world, different companies strive to cope with the pace of changing technology in order to compete favorably in the global markets. Among them is Financial Technology, commonly referred to as FinTech. This is a flourishing industry on the minds of everyone, especially fintech investors.
The driving force of this industry (FinTech sector), together with the digital banking system and neo-bank, is globalization and digitalization.
FinTech companies are set in motion to leverage cutting-edge technologies like loT, machine learning, and artificial intelligence. This is significant in providing banking systems within a short period of time. Discussed below are the top 5 innovative FinTech Startup companies to know.
1. Klarna
Situated in Stockholm, Sweden, this company was founded in 2005. The idea behind this was to make online shopping a walk in the park. The company was founded by Niklas Adalberth, Victor Jacobson, and Sebastian Siemiatkowski.
The company has over 4000 employees, the majority working at the headquarters in Berlin and Stockholm.
In 2011, approximately 40% of all e-commerce sales in Sweden went up through this company. As of 2023, the company was Europe’s most valuable private tech company at nearly a $45.6 billion valuation.
Some of Klarna’s core services:
- Managing store claims.
- Customer payments.
- Provide payment processing services for e-commerce industries.
The company is known as ‘Buy now, pay later’ service provider. Furthermore, it offers customers credit on their purchases as part of the checkout process.
2. Robinhood
This is an American financial service company. It was founded in 2013 by Baiju Bhatt (Chief creative officer) and Vladimir Tenev (CEO). Its headquarters is in Menlo Park, California.
It facilitates commission-free trades of stock, cryptocurrencies, and exchange-traded funds. This is done via the mobile app which was introduced in 2015.
The company has three primary sources of revenue; margin lending, selling order information to high-frequency traders, and interests earned on customers’ cash balances.
Robinhood had 15.9 million monthly active users, and 22.8 million funded accounts.
3. SoFi
Founded in 2011 by Dan Macklin, Ian Brady, Mike Cagney, and James Finnigan, this is an American online personal finance company and online bank. The CEO of this company is Anthony Noto.
Its headquarters is in San Fransisco, California.
SoFi provides wealth management, personal loans, mortgages, credit cards, banking, and refinancing services. The beauty is that these services can be done through the desktop interface and mobile app. Furthermore, things like estimated cash flow, education, and career are part of the mix.
4. Ant Financial
This is an affiliate company of the Chinese union Alibaba Group. It was founded on October 16, 2014, by Jack Ma. Its headquarters is in Xihu District, Hangzhou, China. Key persons in this company are:
- Ni Xingjun (Chief Technology Officer).
- Eric Jing (Chief Chairman and Chief Executive Officer).
- Cyril Han (Financial Officer).
Over the years, the organization has expanded beyond Alipay. This has led to Yu’e Bao, an investment fund, and MyBank, an online lending platform. It introduced the world’s cross-border remittance network in 2018, based on blockchain.
In partnership with GCash and AlipayHK, it provides real-time money transfers.
In addition, Ant Financial has its Artificial Intelligence expertise which improves wealth management services and makes them not only more customizable to users but also more accessible.
It invested in Alibaba’s online ticketing platform, major fast-food conglomerate Yun China, wealth management, and car dealer.
5. Wealthsimple
Founded in September 2014 by Michael Katchen, this is a Canadian online investment management service. Its headquarters is situated in Toronto, Ontario, Canada. It is primarily owned by Power Corporation indirectly at 70.1% through investments made through its holdings in Power Financial, Portag3, and IGM Financial.
Some of the products and services of Wealthsimple include:
- Tax. It acquired Simple Tax in September 2019. This added up filing services and online tax return preparation to Wealthsimple’s suite of financial products.
- Cash. The company initiated Smart Savings in April 2018. Two years later, the company introduced Wealthsimple cash for Canadian customers. November of the same year Wealthsimple transformed from savings account to a peer-to-peer cash transfer app.
- Invest. Wealthsimple invest is the firm’s automated investing service. It manages users’ investment through a personalized portfolio of low-fee exchange-traded funds. In 2018, the company introduced Roundup. This is a micro-investing service that automatically rounds up purchases and invests the extra change into one’s Wealthsimple investment account.
- Wealthsimple crypto. It is the platform for selling and buying cryptocurrencies such as ETH and BTC. The beauty is that this service has no fees.
- Wealthsimple trade. It was introduced in March 2019. It allows users to buy and sell individual stock on major Canadian and U.S. exchanges.
As technology is advancing, it is changing the future of finance. These startups are shaking up things for well-established companies. Discussed above are some FinTech companies that a fintech investor may consider.
