A fintech startup (or company) is any business entity that uses modern technology to provide financial services to its users. It includes everything from essential money transfer services to automated investments and insurance. Over the last decade or so, financial technology has become one of the fastest-growing tech industry sectors.
The total amount of investments into fintech companies grew exponentially between 2012 to 2015 worldwide. In 2018, the value of investments in such companies stood at $148 billion. It skyrocketed to a whopping $215 billion the following year in 2019.
Below are the 17 most valuable fintech companies in the United States and worldwide. To make this list more informative and less obvious, we haven’t included the world’s largest fintech company – PayPal, with over $300 billion in valuation.
17. Root: $6.7 billion
Founded In: 2015
Root, Inc provides car insurance with a curated premium to customers based on their test driving scores. In other words, the company offers car insurance with adjusted premium rates after assessing consumers’ driving behavior through a proprietary smartphone app. The company only insure “good drivers” to keep their premiums considerably lower than traditional insurers.
It became the first insurance company to provide discount offerings to car (Tesla) owners for using autopilot mode. In 2018, Root became a Unicorn company, the first non-healthcare startup to do so.
In September 2019, the company raised $350 million at a $3.6 billion valuation in a Series E funding round led by DST Global. A year later, in October 2020, Root went public through IPO, raising $724 million in the process. At the IPO, the company was valued at $6.7 billion.
16. Carta: $7.2 billion
Founded in: 2012
Carta is a fintech company specializing in investment and portfolio services for private companies. Carta’s products include Cap table management (shows company’s percentage of ownership), ESOP valuation, and scenario modeling tool (breakpoint analysis, dilution modeling) for startups and companies. It also provides various tools for individual investors and fund managers.
Carta was initially founded as eShares in 2012 by Henry Ward and Manu Kumar. They currently serve as the CEO and chairman of the company, respectively. The company obtained a unicorn status in May 2019 after raising $300 million at a $1.7 billion valuation.
In August 2021, Carta reported raising $500 million at a $7.2 billion valuation in a Series G funding round led by Silver Lake Partners.
15. Paytm: $14 billion
Founded In: 2010
Paytm is the largest fintech company in India. It was founded in 2010 initially as an online mobile recharge platform by billionaire Vijay Shekhar Sharma. By 2015, the startup had expanded into e-commerce and online payment services and acquired 104 million registered users. Its user base in 2019 was close to $350 million.
Paytm is backed by some of the most well-known investment firms in the world, including Alibaba Group, Softbank Vision Fund, Berkshire Hathaway, and Ant Group.
In November 2019, the company raised $1 billion at a $16 billion valuation in a funding round led by T Rowe Price and several of its existing investors. Paytm launched its IPO in November 2021 at a $20 billion valuation, the largest ever in India. However, the company is currently valued at around $14 billion after a sharp decline in its shares.
14. SoFi: $8.6 billion
Founded In: 2011
SoFi (short for Social Finance) is a San Francisco-based financial technology company specializing in personal loans, student loan refinancing, and mortgages. The company was founded by four Stanford Graduate School of Business alumni in 2011 to provide students with affordable debt/loan options.
Between 2012 and 2014, SoFi raised more than $650 million in debt financing and equity from Morgan Stanley, Baseline Ventures, and others. By mid-2016, the company had facilitated over $2 billion in loans. The same year, SoFi became the first online lender to receive AAA ratings from Moody’s.
In May 2019, SoFi landed a $500 million investment from Qatar Investment Authority at a $4.3 billion valuation. The company announced in early 2021 that it would go public through a merger with a special purpose acquisition company (SPAC), headed by venture capitalist Chamath Palihapitiya. The deal valued SoFi at $8.6 billion.
13. Wise: $11 billion
Founded In: 2010
Wise is one of Europe’s largest and most popular fintech companies. It allows customers to send and receive money worldwide using its peer-to-peer money transferring service. Wise supports more than 750 different currency pairs (i.e., USD to GBP, USD to AUD, etc.) and multiple currency accounts. The company was founded in 2010 by a former Skype employee Taavet Hinrikus and financial advisor Kristo Käärmann.
In 2013, the company raised its first significant investment of $6 million in a funding round led by Peter Thiel’s Valar Ventures. Between 2013 and 2016, the company raised a total of $117 million in funding from investors such as Richard Branson and venture capital giant Andreessen Horowitz. In May 2016, the company became a unicorn with a $1.1 billion valuation.
Wise reached 4 million users in September 2018 with a net income of $151 million. The company is currently valued at $11 billion as a result of its direct public listing on the London stock exchange in July 2021. Previously, Wise was valued at $5 billion after raising $319 million in a secondary investment round in July 2020.
12. Brex: $12.3 billion
Founded in: 2017
Brex is a San Francisco-based fintech company that offers business credit cards and card management solutions to business and corporate clients. The company was founded by two Brazilians, Pedro Franceschi, and Henrique Dubugras, in 2017. The duo previously established Pagar.me, a payment processing service, which was eventually acquired by StoneCo.
In an effort to provide its services more efficiently, Brex acquired an Israeli API developer startup – Weav, for a whopping $50 million in August 2021.
In April 2021, Brex was valued at $7.4 billion after raising $425 million in a Series C funding round led by Tiger Global Management. Just six months after raising more than $400 million, in October 2021, Brex finalized an additional $300 million funding at a $12.3 billion valuation. The company is backed by large venture capital firms, including DST Global, Kleiner Perkins, and Greenoaks Capital.
11. Plaid: $13.4 billion
Founded in: 2013
Plaid allows financial apps and services, such as Venmo, Digit, and Chime, to connect with users’ bank accounts more efficiently. The company was founded in 2013 by William Hockey and Zach Perret and is headquartered in San Francisco, California. It has six other offices across Europe.
In December 2018, Plaid raised $250 million at a valuation of $2.65 billion in a Series C funding round led by VC firms Andreessen Horowitz and Index Ventures. It is also backed by Spark Capital, Ribbit Capital, and Goldman Sachs Investment Partners.
In April 2021, in its most recent funding round, Plaid finalized a $425 million capital raise led by Boston-based Altimeter Capital. The new capital values the company at $13.4 billion. This funding round took place a few months after the official termination of Plaid’s acquisition by Visa Inc.
10. Chime: $25 billion
Valuation: $25 billion (A possible $40 billion IPO)
Founded In: 2013
Chime is a San Francisco-based neobank (a bank that runs exclusively online) that provides banking services to its customers without maintenance fees or monthly charges. Almost all of its revenue comes from interchange collections that it charges merchants to process card transactions.
The company reached one million registered users in 2018, which jumped to 6.8 million the next year. In 2020, the figure crossed the 8 million mark in February 2020.
Chime gained Unicorn status (startups with more than one billion dollars valuation) in March 2019, after raising $200 million at a $1.5 billion valuation. In August 2021, Chime raised $750 million at a $25 billion valuation led by Sequoia Capital. According to various sources, the company is planning to raise money through IPO, which could be around $40 billion, as of January 2022.
9. Robinhood: $32 billion
Founded In: 2013
Robinhood Markets, Inc., or simply Robinhood, is an online discount broker and electronic trading platform that allows customers to invest in publicly traded companies and ETFs (exchange-traded funds) listed in the US stock exchange without paying hefty commissions. Robinhood makes most of its profits through margin lending and the cash balancing process.
In 2015 the company reported that about 80 percent of its customers were ‘millennials‘ with an average age of 26 years. Its popularity among the younger generation remains unaffected.
Robinhood became a unicorn startup in April 2017 after raising $110 million at a $1.3 billion valuation from big-name VC firms such as DST Global and Greenoaks Capital. In July 2021, the company went public through an IPO at a valuation of $32 billion.
8. Revolut: $33 billion
Revolut is a London-based fintech company that offers various banking and financial services under a single application. It allows users to send and receive payments in over 30 different currencies and access virtual cards and budgeting tools. With Revolut, you can also invest in cryptocurrencies, stocks, and even valuable commodities from just $1 without going through much hassle.
Revolut was founded in 2015 by two co-founders, Nik Storonsky and Vlad Yatsenko. Within three years of establishment, in April 2018, it obtained a Challenger bank license from the European Central Bank. A challenger bank is any small, newly established bank in the United Kingdom that can accept money deposits and provide credits, thus competing with traditional banks in the country. Revolut turned profitable for the first time in November 2020.
In its latest Series E funding, which concluded in mid-July 2021, Revolut raised $800 million from two investors, Tiger Global Management and Softbank Vision Fund. The funding round values Revolut at around $33 billion, making it the biggest fintech company in the United Kingdom.
7. NuBank: $41 billion
Founded in: 2013
NuBank is currently the largest fintech company in Latin America. It offers a wide range of banking services, including a free digital-only account, credit card, life insurance, and personal loans. NuBank allows its users to apply and manage credit cards – track transactions, block cards, and raise spending limits completely through a mobile app. In January 2021, NuBank reported 35 million customers in Brazil alone.
NuBank became a unicorn startup with over $1 billion in valuation in 2018. It is backed by some of the world’s largest investment management and venture funds, including Sequoia Capital, Goldman Sachs, Berkshire Hathaway, DST, and technology conglomerate Tencent.
In early December 2021, the company went public with a valuation of $41.5 billion. According to sources, NuBank raised around $2.6 billion by selling a minority stake through IPO.
6. Klarna: $46 billion
Founded In: 2005
Klarna, or Klarna Bank, is Sweden’s largest fintech company that offers banking and financial services, including credit payment and debt collection, to businesses. The company was initially created to facilitate merchants and consumers with a much simpler and safer payment method. Klarna offers its services in fifteen countries, including the United States.
The company is backed by Swedish firm Investment AB Öresund, Sequoia Capital, DST Global, and several other VC firms that made early investments in Klarna.
In 2019, the company raised $460 million at a $5.5 billion valuation from a wide range of investors, including U.S-based investment management firm Dragoneer Investment Group, Commonwealth Bank of Australia, and British investment trust Chrysalis Investments. The funding helped Klarna become the largest fintech company in Europe at that time.
Klarna achieved its current valuation of about $46 billion after finalizing a $639 million funding round led by Softbank Vision Fund in July 2021.
5. Square: $51 billion
Founded In: 2009
Square, Inc. is a US-based financial services and technology company that offers mobile payments and point-of-sale operations. It deals in both the software and hardware aspect of the service.
Since its inception, Square has received funding from big names such as Goldman Sachs, Starbucks, and GIC Private Limited, Singapore’s largest sovereign wealth fund. Angel investors, including Marissa Mayer and Biz Stone, have made early investments in the company.
Square went public with its IPO launch in November 2015, with an initial valuation of $2.9 billion. Since 2012, the company registered a profit for the first time in the fiscal year 2019.
4. Coinbase: $56 billion
Founded in: 2012
The cryptocurrency boom of 2017 was a major turning point for the world’s largest digital currency exchange, Coinbase. For those who are unaware, Coinbase is a trading platform that allows customers to invest in cryptocurrencies, including Bitcoin and Ethereum.
Since its establishment in 2012, the company has raised over $217 in funding and is backed by veteran VC firms such as Union Square Ventures, Andreessen Horowitz, and Ribbit Capital. In 2017, Coinbase generated over $1 billion in revenue.
According to its SEC filings in late 2020, the company had a total of 43 million registered users. The company went public in early 2021 and is currently valued at $63 billion.
3. Adyen: $71 billion
Founders: Arnout Schuijff and Pieter van der Does
Founded In: 2006
Adyen is a Netherlands-based fintech company that allows businesses and merchants to receive payments from anywhere in the world through card networks (such as VISA and Mastercard) and local payment methods. It employs machine learning methods to give data-rich insights on transactions and business revenue optimization.
The company turned profitable for the first time in 2011 and started global expansion by establishing new offices in London and San Francisco. Adyen processed over $50 billion in transactions in 2015, which went up to $90 billion in 2016.
Adyen is backed by prominent venture capital and private equity firms, including Temasek Holdings, General Atlantic, and Index Ventures. It went public in June 2018.
2. Stripe: $95 Billion
CEO of Stripe, Patrick Collison | Image Courtesy: Flickr/JD Lasica
Founders: Pattrick Collison and John Collison
Stripe is a payment processing service that allows business owners and developers to securely receive payments for their services. It was founded in 2009 by two Irish siblings – Pattrick and John Collison. In 2011, Stripe received its first major funding of $2 million from the likes of Peter Thiel and Elon Musk (the co-founders of PayPal). The company achieved a unicorn status after surpassing $1 billion valuations in 2014.
Stripe has made a few investments of its own, as well. It made a series of investments in Monzo, a UK-based challenger bank, currently valued at $4.5 billion. In 2013, it bought task management and collaboration app called Kickoff. In 2020, Stripe acquired a Nigeria-based payment processor, Paystack, to expand in Africa.
The company raised $250 million at a $35 billion valuation from some of the most prominent venture funds globally, including Sequoia Capital and General Catalyst.
Stripe’s meteoric rise in the fintech world can be attributed to its overall technological supremacy over its competitors. In March 2021, Stripe finalized a $600 million funding round led by multinational financial services companies, including Fidelity Investments, AXA SA, and Insurers Allianz SE. With that funding, Stripe became America’s most valued fintech company at a $95 billion valuation.
1. Ant Financial: $170 billion
Founded In: 2014
Ant Financial, now known as Ant Group, is the largest financial technology company in the world. It is an affiliate firm of China’s Alibaba Group and was established in 2014. Ant Financial owns Alipay, one of the world’s largest digital payment platforms. Ant also operates other financial services, such as Yu’e Bao, a popular money market fund, and Zhima Credit, a private credit rating system.
In 2015, Ant Group secured a hefty $4.5 billion investment from some of the largest financial institutions in China, including China Investment Corp., China Development Bank Capital, and Chila Life. The investment valued the company at $45 billion.
In October 2020, Ant Financial was expected to go public in perhaps the world’s largest IPO yet. The company would have raised $34.5 billion at a valuation of $313 billion. However, the IPO was canceled by the Chinese regulators. As a result of the ongoing regulatory pressure, the company continues to lose its valuation. In February 2021, Ant Financial was valued at $144 billion.
Frequently Asked Questions
What is fintech?
Fintech, or financial technology, is a term used to describe any innovative product, application, and process intended to improve and enhance the delivery of financial services. As an emerging industry, fintech is increasingly influencing areas such as investments and trading, insurance, risk management, and banking services. It also includes developing and exchanging cryptocurrencies (bitcoin, ethereum).
Initially, the term was exclusive for back-end systems and technology implemented by traditional financial institutions and banks. Today, however, financial technology has become more customer-centric, focusing on individually tailored products and customer satisfaction.
Fintech help businesses and individual customers to manage their finances and financial processes more efficiently by utilizing advanced technologies such as artificial intelligence and big data.
Will fintech replace traditional banks?
Traditional banks are known to offer a wide of financial services and products to their customers under one platform. From basic banking services to trading and mortgage offerings. However, the basic idea of fintech is to provide specialized, more efficient, and individual products and offerings.
The use of advanced and innovative technology along with a customer-oriented nature of the offerings allow fintech companies to be more cost-efficient than traditional financial institutions. Moreover, the financial industry is far more exposed to ‘disruptive’ innovation since finance is all about handling data. In other words, fintech companies have certain advantages that enable them to challenge and compete with large established banks.
In the face of competition from fintech companies, many large banks have turned to in-house venture funds to invest and acquire disruptive technologies. For instance, in September 2021, Goldman Sachs announced the acquisition of GreenSky, a credit lending platform, for $2.2 billion to bolster its homegrown online bank, Marcus.
Whether or not fintech can replace traditional banks depends on future strategies used by those banks and financial institutions. Without enhancing the speed and efficiency of their services, banks are unlikely to survive the Fintech challenge.
What is the future of fintech?
As we have mentioned earlier, investments in financial technology companies around the world have skyrocketed in recent years, and despite the current slowdown, the total value of the funding is only expected to increase in the long term.
Over the last few years, fintech products such as cryptocurrencies, blockchain, Robo advisors, and neobanks have attracted the attention of mainstream media and are part of the popular culture.
According to a report by McKinsey, several key technologies that will shape the fintech industry in the next decade include blockchain, artificial intelligence, IoT (internet of things), and cloud computing.