Financial Technology Market Overview and Innovation Quadrant – Q1 2017

The following post highlights how Venture Scanner categorizes the Financial Technology (fintech) startup landscape, and presents our Innovation Quadrant showing how those categories compare to one another. The data for this post is through January 2017.

The above sector map organizes the Financial Technology sector into 16 categories and shows a sampling of companies in each category.

Our Innovation Quadrant provides a snapshot of the average funding and average age for the different Financial Technology categories and how they compare with one another.

• Heavyweights: These categories are comprised of companies that have reached maturity with significant financing.
• Established: These categories are comprised of companies that have reached maturity with less financing.
• Disruptors: These categories are comprised of companies that are less mature with significant financing.
• Pioneers: These categories are comprised of companies that are less mature with earlier stages of financing.

The definitions of the Financial Technology categories are as follows:

Banking Infrastructure: Companies that improve the operations of financial institutions. Examples include API integration with banks, white-label mobile solutions, and big-data analytics.

Business Lending: Companies that offer new ways for businesses to raise debt financing and have their credit risk assessed. Examples include peer-to-peer lending platforms, asset-based lines of credit, micro-financing, and big data risk analytics.

Consumer and Commercial Banking: Companies that allow consumers and SMBs to interface with banking services. Examples include Internet-only banking services and virtual credit cards.

Consumer Lending: Companies that offer new ways for consumers to obtain personal loans and have their credit risk assessed. Examples includes peer-to-peer lending, micro-financing, big data analytics, and consumer credit scoring services.

Consumer Payments: Companies that offer technology and services centered around payment issuers and consumers. Examples include mobile wallets, credit card aggregators, prepaid card innovations, and peer-to-peer payments.

Crowdfunding: Companies that provide new methodologies to raise non-equity and non-debt financing. Examples include crowdfunding platforms for products, social causes, and creative projects.

Equity Financing: Companies that allow private businesses to raise capital in exchange for equity and for investors to participate in private securities markets. Examples include crowdsourcing equity platforms and secondary market solutions.

Financial Research and Data: Companies that provide information services that enable investors to make better investment decisions. Examples include news, research, and data sources.

Financial Transaction Security: Companies that provide solutions to secure transactions, authenticate users, and prevent fraud. Examples include identify verification, big data analytics, and fraud detection algorithms.

Institutional Investing: Companies that help wealth managers, hedge fund managers, and professional traders to manage their portfolios and optimize returns. Examples include tools for stock sentiment analysis, alternative investment platforms, and algorithmic trading tools.

International Money Transfer: Companies that allow businesses and individuals to send money abroad easily and cheaply. Examples include digital-only remittances, mobile top-off services, and gift cards.

Payments Backend and Infrastructure: Companies centered around payment issuers/acquirers and the infrastructure enabling payments. Examples include payment solutions for e-commerce merchants, online payment gateways, ACH, direct deposits, and payment back-ends for mobile apps.

Personal Finance: Companies that provide ways for consumers to manage their personal finances. Examples include tools for tracking expenses, managing a budget, addressing wrongful credit card charges, and optimizing credit card rewards.

Point of Sale Payments: Companies centered around payment acquirers, providing physical payment solutions for brick-and-mortar businesses and organizations. Examples include mobile point-of-sales (POS) systems and POS innovations (e.g. QR code, palm scanners).

Retail Investing: Companies that provide new ways for consumers to invest in various securities. Examples include theme-based investments, crowdsourced investment expertise, unbiased algorithmic investment advice, and investment social networks.

Small and Medium Business Tools: Companies that offer solutions that help small and medium sized businesses manage their finances. Examples include tools for taxes, payroll, invoicing, and accounting.

We are currently tracking 2,056 Financial Technology companies in 16 categories across 59 countries, with a total of $58 Billion in funding. Click here to learn more about the full Financial Technology report and database.