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December 14, 2015updated 04 Apr 2017 4:00pm

China and UK fintech close in on US

The 2015 ‘Fintech 100’, which lists the world’s top fintech companies for this year, has been published by Fintech Innovators, a collaboration between fintech investment firm H2 Ventures and KPMG. UK and China make strong showings, as top global fintech firms, with companies new and old. Alexander Atkins writes

By RBI editorial

The 2015 ‘Fintech 100’, which lists the world’s top fintech companies for this year, has been published by Fintech Innovators, a collaboration between fintech investment firm H2 Ventures and KPMG. UK and China make strong showings, as top global fintech firms, with companies new and old. Alexander Atkins writes

The 50 ‘Emerging Stars’ list features 12 start-ups from the UK, the most of any country, and includes Bankable, an innovative payment solutions firm, GoCardless, a cost effective payment acceptance service, Property Partner, a property crowdfunding platform, The Currency Cloud, a real time payments network and Yoyo Wallet, a pioneering payments business.

The UK also had six companies in the ‘Established Innovators’ list, including Funding Circle, a platform for small businesses to attract investors, Atom, a digital bank and iZettle, a mobile payments solution.

Chinese fintech companies have also shown a strong performance on the list, with the top spot on the ‘Established Innovators’ list being taken by Shanghai-based ZhongAn, an online insurance company, along with seven others in the top 50, including Qufenqi, an electronics retailer with a payments solution and Lufax, an online marketplace.

Last year’s list featured only one Chinese firm, the credit assessments platform WeCash.

Warren Mead, global co-lead of KPMG’s fintech practise commented on the success of UK and Chinese firms, said: "The UK is clearly a leading centre for fintech but with the rise of Chinese firms that position is not guaranteed.

"The good news is the UK is currently home to more emerging fintech companies on the list than anywhere else. In a fast moving sector, it will be interesting to track how many breakout over the next 12 months."

On the growing importance of fintech to the financial community, Mead added: "The speed and energy with which fintech innovation is impacting financial services is gathering global momentum on many measures.

"This year’s report underscores the international nature of fintech, with the broad geographic diversity of the fintech companies featured. It is the ‘Fintech 100’ companies that are pushing the frontier of new products, services, technology and business models in financial services. Those within the financial services sector who ignore the innovations of the ‘Fintech 100’ cohort do so at their peril."

Toby Heap, a founding partner of H2 Ventures, was also adamant that fintech would be crucial to the fast evolving financial world of the future. He said: "In an industry that will soon be irrevocably changed by the disruptive effect of innovation, the companies doing fintech best are those most likely to succeed.

"Already, some of the world’s major financial centres are equally becoming known as centres for fintech innovation: London and New York, and more recently Sydney."

He also emphasised how the list showed that fintech could not be limited to one area of the globe. "This year’s Fintech 100 highlights the truly global nature of fintech innovation, with startups from 20 countries on the list.

"Many of these companies have an X-factor that has captured our attention – exciting new fintechs with bold, disruptive and potentially game-changing ideas," he added.

Fintech across the globeThe list featured 40 companies from The Americas, 20 companies from Europe, Middle East and Africa and 22 companies from the Asia-Pacific region which include 10 from Australia and New Zealand.

Australia was another location that showed surprising success, helping to prove why cities like Sydney are underrated yet fast expanding fintech hubs.

In the ‘Established Innovators’ list, Australian companies SocietyOne, a Peer-to-Peer lending platform, and Prospa, an online small business lender, were ranked at 37 and 33 respectively. In the ‘Emerging Stars’ list, seven Australian companies were featured including Avoka, a platform for digital sales, Equitise, an investment platform and Metamako, a device company.

The US stays strongAs expected, the US produced a substantial number of the top 100, with three US firms in the top 10: Oscar, a health insurance platform, at 2nd, Wealthfront, an automated investment service, at 3rd, and Avant, a marketplace lending platform, at 7th. Twenty one US companies also featured in the top 50 ‘Established Innovators’ list, most of them coming from either New York or San Francisco.

Meanwhile, eleven US startups made the ‘Emerging Stars’ list including C2FO, a working capital exchange, Estimize, a financial estimates platform and Orchard Platform, a technology and infrastructure provider.

Those selected were judged on five key factors: the total capital they have raised, their rate of capital raising, their geographic and sector diversity, their consumer and marketplace traction and their X-factor, the level of their product, service and business model innovation.

Moving forwardStartups on the ‘Emerging Stars’ list were not ranked. Instead the top ten will be invited to attend a KPMG and Matchi fintech summit in London where they will be given the chance to pitch their ideas to some of the world’s most prestigious financial institutions, venture capital funds and investors.

The report also highlighted several other interesting trends in new financial companies: firstly, it showed a rise in ‘enablers’, service providers to financial institutions, with 25 in the list compared to seven last year.

Secondly, the list emphasised how payments is the sector most at risk of disruption as shown by a growth in fintech companies dealing with payments, currencies and transactions, up to 25% of the ‘Fintech 100’.

Fintech financing has risen hugely over the past three years, jumping 66% from last year to over $20bn.

Together all the companies on the list have collectively raised over $10bn.

Fintech Innovators, who compiled the report, is a joint scheme between H2 Ventures and KPMG, researching the world’s most successful and exciting new companies in the financial services sector.

H2 Ventures has been described as one of the emerging thought leaders in fintech venture capital investment.

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