Disclaimer: The views and opinions expressed herein are based on multiple publications and blogs from KMPG, Nasdaq, World Bank and Millennial Money, and do not necessarily reflect those of CFTE. CFTE is not a financial and investment advisor and the opinions presented in this blog are not indicative of guaranteed future returns.
‘They say Money Talks,
But mine just waves goodbye…
Oh god, what should I do?’
Congratulations, you have reached the last stage in the game!
You did the hard work. You have the money. Now, what?
Come on, you know it, this is the time to invest!
While there are loads of avenues you could choose to invest in from the real world, we’d like you to be a part of the new era of Fintech 2.0.
The Major Trends In The Current Fintech Investment Landscape
Various branches of Fintech from Paytech, Insuretech, Healthtech to DeFi have quintessentially contributed to the ongoing wave of startup culture. According to KPMG, the major trends in the current fintech landscape are:
- 2021 closed with Global Fintech Investment Activity reaching $210 billion
The entire year of 2021 saw growing deal sizes especially across the subsectors of Fintech such as crypto, blockchain, wealthtech and cybersecurity. There was significant investment across VC, PE and cross border MA.
- Fintech Focussed Venture Capital Funding Rounds
There was a record number of seven fintech-focused VC funding rounds over $1 billion, including five in 2021 — all in the Americas: a $2 billion raise by US-based Generate, a $1.1 billion raise by Brazil-based Nubank, a $1.1 billion raised by US-based Chime, and a $1 billion raise by Bahamas-based FTX. The largest VC rounds in EMEA consisted of a $900 million raise by Germany-based N26 and Sweden-based Klarna’s $1.2 billion VC raise in 2021.
- $30 billion investment in crypto and blockchain globally
Investment in the crypto and blockchain space has soared from $5.4 billion in 2020 to over $30 billion by 2021. Globally, there has been an increasing interest and recognition for the potential role of crypto and its underlying technologies in modern financial systems.
- Buy Now Pay Later: Centre of Robust Investment
From Klarna’s $1.2 billion VC raise to PayPal’s acquisition of Japan-based Paidy for $2.7 billion, the BNPL space continues to attract investors.
- Highest activity of PE firms observed in the fintech sector
PE firms are more active in the fintech sector than ever before. 2021 witnessed a record 144 deals accounting for over $12 billion in investment by PE firms, twice the previous high of $5 billion in 2018.
List of Top 10 Fintech Company Stocks that are Worth Watching in 2022
In an era where people are buying ‘land’ in the metaverse, in a reality where colleagues working across 12 time zones are conducting meetings in their virtual offices, it is high time we introduce you to the top 10 financial technology companies that are worth watching.
Where to invest exactly would be the question. While which one is the best for you won’t be for us to tell, but what these companies are all about is certainly our pleasure to share.
|Type of company
|Payments and Technology
|Payments and Technology
|AI Lending Platform
|Source: Report by Millenial Money
- Block Inc. (NYSE:SQ)
Square recently rebranded itself as Block Inc. Headquartered in San Francisco, Block is a financial services, merchant services aggregator and mobile payments company, this fintech leader also has an incredibly popular peer-to-peer (P2P) payment app called the Cash App. Investors are taking notice of the company’s fintech success and have pushed up Block’s share price by an astounding 248% in 2021.
- Paypal Holdings (Nasdaq: PYPL)
An American multinational financial technology company operating an online payments system in the majority of countries that support online money transfers, and serves as an electronic alternative to traditional paper methods. It has more than 360 million active users.
- SoFi Technologies (NASDAQ: SOFI)
Another Fintech that’s worth watching is a financial technology company in the challenger banking sector – SoFi. This Fintech added 377,000 new members and 10 million new Galileo accounts the last quarter of 2021. The company is worth keeping tabs on as it has potential growth catalysts that investors are excited about. The company also could increase its financial product solutions in the coming months.
- MercadoLibre (Nasdaq: MELI)
With its origins in Argentina, MercadoLibre operates online marketplaces dedicated to e-commerce and online auctions. It got a vote of confidence in 2019 when PayPal invested $750 million in the company.
- Visa (NYSE: V)
Amongst the most valuable companies in the world, Visa facilitates electronic funds transfers throughout the world, most commonly through Visa-branded credit cards, debit cards and prepaid cards. Visa recently began using Ethereum’s blockchain to easily convert digital currency into fiat currency. The company partnered with Anchorage, a digital asset bank, to achieve faster transactions, more transparency, and even more influence for Visa in the fintech space.
- Mastercard (NYSE: MA)
Amongst the top 10 holders of blockchain patents, Mastercard’s principal business is to process payments between the banks of merchants and the card-issuing banks or credit unions of the purchasers who use the “Mastercard” brand debit, credit and prepaid cards to make purchases.
- Coinbase Global (Nasdaq: COIN)
Standing as one of the ultimate players in the skyrocketing cryptocurrency market, the cryptocurrency exchange, Coinbase Global went public in 2021 and is known predominantly for the rapid rise of BTC over the past few years. It is the largest cryptocurrency exchange in the USA by trading volume.
- Greendot Corporation (NYSE: GDOT)
The Green Dot Corporation is an American financial technology and bank holding company headquartered in Austin. It is the world’s largest prepaid debit card company by market capitalization. Its BaaS serves as the backbone of Apple’s, Google’s, Amazon’s, and Walmart’s financial services.
- Lemonade (NYSE: LMND)
With approximately 1 million customers, Lemonade Inc. offers renters’ insurance, homeowners’ insurance, car insurance, pet insurance and term life insurance in the United States as well as contents and liability policies in Germany, and the Netherlands, and renters insurance in France. The company has created an AI tool for better convenience in the insurance industry.
- Upstart Holdings (Nasdaq: UPST)
Leveraging artificial intelligence to provide personal and auto loans to customers, Upstart Holdings partners with banks and credit unions to provide consumer loans using non-traditional variables, such as education and employment, to predict creditworthiness.
Your Money, Your Choice
With the Fintech Market now estimated to be over $6.5 trillion, investment in fintech is rising by leaps and bounds. In fact, according to the 2020 Global COVID-19 FinTech Market Rapid Assessment Study, the World Bank had emphasised the commendable resilience of the Fintech industry to COVID-19 and how the industry survived even amidst a scenario of crippling economies and an ailing global landscape.
From the emergence of Fintech Unicorns to the growing interest in DeFi, Fintech companies are the cynosure of global investors.
Indeed, the renowned ‘shark’, Mark Cuban has rightly said, ‘There is no sport as competitive as business’.