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The 16 FinTech Unicorns Only Do Three Things

Aug 17, 2020 1:32:45 PM

Will this breakdown remain, or will the market get too heavy in those sectors and even out?

*This piece was originally published by Kate Brodock at untapt, a Byte Academy content partner. untapt makes it easier to recruit top tech talent into the FinTech space by connecting companies directly with specially skilled, highly-coveted candidates. untapt's precise matching technology uses key candidate and company data to connect technologists to the perfect FinTech role.

Earlier this month, CBInsights published a list of the 16 FinTech unicorns, including their valuation, total funding and notable investors.

“The aggregate valuation of all 16 of these FinTech companies equals almost $49B, which is roughly 10% of the aggregate value of all 130 unicorns as of August 27, 2015.”

That’s a big number. But what popped out at me as I skimmed the list was that the companies were all in one of only three sectors – payments, lending or money management, and heavy on the first two. Sure enough, after a firm count, there were 8 companies in payments, 5 companies in lending and 3 in money management.

[Note: “Payments” is a little looser here, and includes PaaS, mobile wallets as well as the one-off payment kiosk from Lakala. Note also that “money management” here includes both business/HR management and personal money management.]

If you take a look at similar lists, the story repeats itself. Finovate has its own list of unicorns and “semi-unicorns”, and lending makes up 22/70, while payments makes up 17/70 (70 is gotten to by 36 unicorns using their designation of $900m+ valuation and 34 additional semi-unicorns with valuations of $500m+).

But this really shouldn’t be surprising. It’s logical if you take the customer view. In general, paying for stuff is one of the most common (if not the most common) and regular financial actions that people and businesses take every day (and, therefore, accepting money is, logically, just as common).

Likewise, loaning or the desire to loan is a primary need for many people around the world. Lending of every type – from a few hundred dollars to hundreds of thousands or more, personal or professional.

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