NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, October 30, 2018

The 2018 Fintech100 was announced on October 23, highlighting dynamic fintechs from around the world that are transforming the financial services industry, from digital payments and lending, to insurtech, to neo-banking, as they attract investment at a record pace.

The 2018 Fintech100 is the fifth edition of the annual report, a collaboration between fintech investment firm H2 Ventures and KPMG Fintech.  The Fintech 100 includes the ‘Leading 50’ fintech firms around the globe, ranked based on innovation, capital raising activity, size and reach; and the ‘Emerging 50’, exciting new fintechs that are at the forefront of innovative technologies and practices and are often pursuing new business models.

Key highlights from the 2018 Fintech100 include:

• Chinese fintechs continue to dominate the top of the list, accounting for three of the top five places on the Leading 50 list with Ant Financial in first, JD Finance second and Baidu fourth; Singapore’s Grab was a new entry, taking third place, and US fintech Sofi moved up to fifth place.
• Global competition continues to expand, with 36 different countries represented in the full Fintech100, up from 29 in 2017 and 22 countries in 2016. Almost half of the companies on this year’s list (41) were founded and continue to operate in emerging markets.
• The US tops the Fintech100 with 18 fintechs placed, including three of the top 10, followed by the UK with 12 and China with 11. Australia and Singapore place strongly with 7 and 6 fintechs respectively.
• Payments companies dominate the Fintech100, with 34 in total, followed by 22 in lending, 14 in wealth management and 12 in insurance. “Multi’s” (fintechs offering a broad range of financial services to customers) dominated the top of the list, led by Ant Financial.
• Digital or “neo banks” also increased their representation to 10 with Monzo, Number26, SolarisBank and Starling Bank making their Leading 50 debut.

Ian Pollari, Global Co-Lead of KPMG Fintech, commented: “The 2018 Fintech100 showcases the increasing diversity and scale of the global fintech market.  Payments and lending continue to be the dominant sectors, however wealth management is taking off, with 14 companies on the list and insurtech remains strong with 12 companies.  Notable this year is the emergence of neo banks, with 10 on the list – which is the beginning of what we believe will be accelerated growth of digital banking models globally.”

Ben Heap, Founding Partner at H2 Ventures, said:  “Venture capital backing of fintech companies continues to accelerate. The companies on the 2018 list have raised over US$52B in venture capital, more than double the total of last year’s list, and more than US$27B of capital in the past 12 months, a 366 percent increase over last year.  In terms of major funding rounds, 26 companies on the Fintech100 have each raised US$100M in the last twelve months. The first four companies in the Leading 50 have all raised over US$1B in the last 12 months alone.”

The top 10 companies in 2018 Fintech100

1. Ant Financial (China)
2. JD Finance (China)
3. Grab (Singapore)
4. Baidu (Du Xiaoman Financial) (China)
5. Sofi (US)
6. Oscar Health (US)
7. Nubank (Brazil)
8. Robinhood (US)
9. Atom Bank (UK)
10. Lufax (China)

Selecting the Fintech100

The Fintech100 were selected following extensive global research and analysis based on data relating to five factors. Two criteria are related to capital raising reflecting the emphasis that venture capitalist investors place on the ability of firms to innovate in order to generate a long term sustainable competitive advantage.

1. Total capital raised
2. Rate of capital raising
3. Geographic diversity
4. Sector diversity
5. X-factor: degree of product, service and business model innovation (a subjective measure that is applied only with respect to companies appearing on the 50 Emerging Stars list).

View the full Fintech100 list here.

Photo courtesy of Ava Systems.