2020 swept in like a tornado, turning every business prediction on its head. We might still be reeling but it’s now clear that certain sectors have fared better than others, and in particular, the fintech industry has seen enormous gains.
In December 2020, Worldbank published data based on reports from 1,385 global FinTech firms, showing that across the board, growth has been unprecedented. Companies focused on digital asset exchanges, payments, savings and wealth management saw gains of an average of 13%, but in some regions such as the Middle East, averages were up by 40%.
The reasons behind this are largely obvious. Lockdowns have seen shops and banks shuttered, and bars and restaurants fall silent. We’ve all become more reliant on electronic payments and the digital economy has therefore accelerated its predicted takeover.
Throughout all of this, Europe has emerged as a dynamic hub of leading fintech development. Companies such as Klarna, TransferWise, Bitpanda, Checkout, auxmoney and Thought Machine have all seen seismic gains over the past year.
We’ve taken a closer look at Europe’s FinTech landscape, to identify a diverse set of companies anticipated to dominate their spaces by the end of this year.
What can their meteoric rises tell the rest of the world about the direction of our industry, and what we can be gleaned from their growth?
Estonian-founded, London-based Zego hit the headlines last week after raising $150m Series C funding in the largest ever funding round by any insurtechs in the region. As such, Zego now enjoys unicorn status with a valuation of $1.1bn and its fortunes just keep growing.
Zego launched in 2016 to provide insurance to the self-employed. However, its simple application process and affordability quickly made it the first choice for Deliveroo and Uber Eats drivers all over Europe.
As the pandemic started to bite, this particular sector boomed and demand for Zego’s specialist services skyrocketed. The rest is now history.
Findr launched to the Fintech industry earlier this year and since then the partnership platform has exploded in popularity.
In just a few short months, Findr launched its second lucrative investment round and gained coverage in prestigious business titles such as Forbes.
The popularity of the app, described by some as a ‘dating app for business’, can be attributed to the thriving Euro-fintech scene coupled with Covid restrictions. In a world where companies can’t comfortably connect face to face, Findr has provided the perfect solution to navigating and forging new partnerships.
Over the past year, the UK’s first and most advanced digital share scheme platform has gone from strength to strength. Even through the pandemic, Vestd saw double digit growth month-on-month and became the UK’s highest rated business of its type on G2.
In terms of what’s driving Vestd’s success, one theory is that the rise of share schemes can be attributed to companies tightening their belts.
By offering equity instead of pay-rises, businesses have been able to continue motivating and aligning their teams. Equity shares have also enabled companies to continue recruiting the best talent, even during Covid-induced pay freezes.
Swiss data labelling platform Toloka has made lightwork of producing huge caches of clean, quality data.
By quickly creating big banks of data to feed into the FinTech industry, Toloka has sped up development throughout the industry. In 2019, Cognilytica reported that the market for third-party data labelling was projected to grow to more than $1bn by 2023, and that was before the impact of Covid.
The pandemic brought a halt to activities that normally generate data (such as travelling or shopping) so businesses have become more reliant on virtual data sets than ever before. Such a shift has cemented Toloka as a vital resource for those who rely on such intelligence.
London’s Habito is a digital mortgage broker and is valued at between £168-252m. Habito launched in 2016 with an ambition to ‘to end mortgage hell forever.’ The company helps homeowners to simplify their mortgage application process and promises, ‘no more paperwork, jargon or misinformation.’
Crucially, they also conduct all conversations virtually so house-buyers don’t have to traipse between physical offices and locations with their paperwork.
Habito’s ‘business as usual’ came into its own in Spring 2020 when the UK went into lockdown.
The UK’s housing market enjoyed a rise of 4.0% as city-dwellers relocated to villages to #WFH. Traditional brokers were forced into closing their doors or learning new ways, but for Habito, business boomed and the startup attracted £35m in Series C funding.
Europe is clearly a crucible of fintech innovation and is set to continue to be a guiding force in the global industry landscape.
Our world has changed and the companies enjoying the most growth are those that are providing new solutions for this new age.
From the list above, we can see that the factors contributing to individual company success are numerous but unpinning all of them is the convenience and value that they provide to their customers.
Good business sense is good business sense and it’s hard to imagine that once the pandemic (hopefully) recedes, we will all go back to our old ways of doing things. The digital revolution has arrived and the commercial possibilities are almost endless.