New Fintech Unicorns

CBS Insights has published a review on investments in fintech companies around the world in Q2 2017. In total, venture capital has financed 251 transactions to the total amount of USD 5.2 billion. Experts assure - if such growth continues, at the end of the year there will be 19% more investment transactions, in comparison with 2016. In Europe, there have been 56 investment transactions in fintech companies and the total amount of transactions has exceeded USD 500 million.

In the second quarter of 2017, the minimum one billion dollar value or ‘unicorn’ companies were joined by five fintech companies. The total number of fintech ‘unicorn’ companies in the world is as follows:

But who are these new achievers, who have just joined this team? It has to be mentioned that truly new and innovative ideas are very rare. Mostly, they are already habitual services, however in improved versions, and there are also other factors behind their success. An interesting fact is that only some of these new companies operate globally. Three of them operate on a very specific, though, certainly, big market, but geographically they are located in one region.

Clover Health is a startup which uses data – insurance cases and other benefit requests to ensure preventive healthcare. If, for example, a patient does not get a prescription or does not arrive to a doctor in time, the software developed by Clover can identify such case and offer its own medical specialist - a trainer or another doctor. Meanwhile, this company operates only in New Jersey, USA, and provides services to about 25 000 members of a specially established club of medical benefits. This startup is the youngest ‘unicorn’ company in the Silicon Valley and currently, its value is estimated at about USD 1.2 billion. The company was established in 2014, however, it still operates with losses – in 2016 their amount was seven times bigger than in 2015 and reached USD 34.6 million.

Robinhood is an application which provides an opportunity to trade stocks without a commission fee. The company was established in 2014 and gained popularity quickly among young people, who wanted to make small investments, without paying a commission fee. To ensure free trading, all functions in the application must be automatically provided. This was taken care of by a team of 100 programmers. In late 2016, a pay version of the application was also presented, which at present contributes to about half of the company’s income. The other half of the income is obtained from different sources, which are described in more detail here. Currently, the company’s value is USD 1.3 billion. The application has over two million registered users and the number of transactions has exceeded USD 50 billion. The goal of the company is to offer as many different financial services as possible in the future without a commission fee.

Symphony is a safe communication application, which primarily offers its services to financial industry companies. With this application, it is possible to communicate both with colleagues, and with contact persons beyond the staff of the company. The key word in their achievement is safety. The company’s competitors are specific communication channels, which are used daily by bankers only, for example, ‘Bloomberg Terminals’. 15 of the world’s biggest banks have invested in the company and it has 200 000 paying clients.

Tuandaiwang is a P2P lending platform in China which offers its users the opportunity to lend out their savings at a high-interest rate, thus earning more than through traditional saving providers. The total amount of issued loans exceeds USD 11.4 billion and brings profit to investors of more than USD 335 million. The company was established in 2014 and currently continues operating successfully in China. The founder and head of the company is Dong Wenbiao, the former head of China Minsheng Bank. The bank is famous for the fact that most of its owners are private companies.

AvidXchange is a payment automation tool for middle-size companies that ensure a management instrument for invoice flow and B2B payments. The company provides services to more than 5500 clients in North America which mostly operate in the real estate, finance, energy, and construction industries.

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