Fintech startups and unicorns that hit the limelight with high funding in 2020
Fintech startups are gaining prominent attention in the worldwide marketplace and challenging banks and other financial institutions through innovation across multiple services. These startups are implementing successful business models and are driving the global evolution of the fintech industry.
Here are some companies that have raised significant funding to develop some of the most promising business models, and have now acquired a wide customer base for their products and services.
SoFi | Category: Personal Loans & Investment | Fund Raised – $2.5 billion
SoFi, a finance company that offers a range of lending and wealth management services, and was founded in 2011 by Mike Cagney, Dan Macklin, James Finnigan, and Ian Brady. SoFi, by refinancing student loans, makes it easier for students to fund their education. In 2014, SoFi extended their services with products like mortgages and personal loans and soon it became the first company to receive a $1billion funding round. SoFi, in 2019, launched SoFi Money and SoFi invest. Since its inception, the company has refinanced over $50 billion loans and has over 1,000,000 members.
Robinhood | Category: Investing | Fund raised: $2.2 billion
With a mission of – Investing for everyone, Robinhood, a California based fintech company, was created to popularise trading among the millennials. It is a stock brokering company that offers commission-free investing. It gives the users access to EFTs, options, and ADRs directly from their phone with no minimum amount required. It also helps you buy and sell crypto currencies with Robinhood Crypto. Robinhood’s business model is based on interest earned from customer’s balances and margin lending.
Klarna | Category: POS/lending | Fund raised: $2.1 billion
Klarna was founded in 2005 by Sebastian Siemiatkowski, Niklas Adalberth, and Victor Jacobsson. The vision behind the platform was to make online payments easy and secure. Klarna offers a range of payment solutions, including direct payments, pay after delivery options, and more. In 2017 Klarna’s banking license was approved it became Klarna Bank AB. Today, in 2020, Klarna is active in 17 markets across 3 continents, has over 85 million consumers and more than 200,000 retail partners and has processed more than $35bn in payments.
Stripe | Category: Payment processing | Fund raised: $2 billion
Founded in 2010, Stripe is an online payment processing system. Stripe offers seamless payment infrastructure for millions of businesses of all sizes and has expanded its services in 5 new markets in Europe. Stripe is known for is their industry-leading developer tools, which allow business owners to integrate and customize their payment processing solutions. It provides a developer platform for businesses to accept online payments and infrastructure for applications such as crowdfunding and marketplaces, fraud prevention, analytics to start, run, and scale their businesses online.
Avant | Category: Personal Loans | Fund Raised: $1.6 billion
Avant is a Chicago based fintech company established in 2012, that specializes in providing personal loans. Relying upon big data and machine-learning algorithms, Avant’s financial services marketplace provides a customized and simplified approach to credit. By 2015 the company raised over $1.4 billion in investments and provided $1 billion in unsecured personal loans to consumers and in 2020 has raised $1.6 billion. Avant has streamlined the online borrowing process and helped over 800,000 people get the funding they deserve.
Chime | Category: Digital Banking | Fund Raised: $1.5 billion
Chime is a US-based digital bank launched in 2013. Chime provides financial services without overdraft or maintenance bank fees. Chime offers a range of spending, savings, and credit-building accounts, together with mobile banking and digital payment solutions for individuals. It also has a unique rounding up feature that sets it apart. Since it doesn’t levy service fees, Chime relies on interchange transaction fees to merchants for its business model.
Oscar | Category: Insurance | Fund raised: $1.5 billion
Founded in 2012, Oscar is a technology driven health insurance company, that uses technology in ways that differentiate it from traditional insurance providers. Oscar has raised venture capital funding from investors such as Alphabet, Fidelity, and Thrive Capital. Oscar helps consumers easily find and connect with the doctors in the network by using its mobile app. Using analytics, Oscar attempts to find the least expensive and most effective treatments for the patients. Oscar also encourages healthy lifestyles; its app syncs with Google Fit and Apple Health and rewards customers with up to $100 per year as they take a certain number of steps.
Affirm | Category: POS/lending | Fund raised: $1.5 billion
Affirm is a loan financing company that provides instalment loans to customers at the point of sale. Affirm allows online shoppers to purchase goods and services from online vendors and retail shops on credit. The credit can be paid off by the buyer through fixed monthly payments over time. A key benefit of availing credit facility through Affirm is that they do not charge their clients any late fees on delays. By doing so, Affirm makes financial services more accessible to consumers.
Nubank | Category: Banking | Fund raised: $1.4 billion
Launched in 2014, Nubank is a leading financial technology company in Latin America. This financial services company provides payment solutions, free-of-charge credit cards, and equity investment to Brazilian customers. Nubank users can access their accounts via their mobile phones, and directly manage their payments and money transfers. Its first product, launched in 2014, was a no-fee credit card that was fully managed by a mobile app and gained immense popularity among its users. The bank holds around 9 million accounts with a market evaluation of $4 million.
Figure | Category: Lending | Fund raised: $1.4 billion
Figure provides financial solutions dedicated to homeowners. Relying upon the Blockchain technology, Figure proposes a range of financial products including home equity lines, mortgage refinancing, and investment opportunities. Figure can deliver low-interest rates and customized products, through a simple and intuitive online application. The technology behind Figure eliminates the time-consuming paperwork of a traditional loan application.