An Overview of the KMPG’s 2019 Fintech 100 Ranking
The report highlights the innovative spirit of the tech-enabled companies which are disrupting the legacy financial system
Big Four auditing firm KPMG in collaboration with H2 Ventures (emerging thought leaders in Fintech VC investment) the has just released the sixth edition of its annual ‘Fintech100’, ranking the leading companies in the Fintech space. This year’s list was compiled, as usual, after extensive global research & analysis and featured companies from 29 countries.
The broader ranking of Fintech100 was divided into two sublists which included the ‘Top 50’ established Fintech firms ranking based on a range of factors including innovation, capital raising activity, size & location while the other half termed as the ‘Emerging 50’, including the newer players who are at the forefront with their cutthroat innovation.
Five key factors taken into account for the ranking were as follows:
⒈ Average annual capital raised
⒉ Rate of recent capital raised
⒊ Geographical diversity
⒋ Sectorial Diversity
⒌ X-factor — a subjective measure of products, services & business model innovation
The dominance of the Asia Pacific region in the Fintech 100 rankings remained evident as usual. However, India with 8 companies represented in the ranking emerged as a strong player on the global Fintech scene.
Individually the U.S was the biggest contributor to the Fintech 100 with 15 companies followed by U.K registering 11, while China was third with 10 Fintechs. Heartening to see Africa’s representation with Nigeria’s sole entry. Following was the geographical breakup of the Fintech 100 with the biggest players in brackets:
- The Asia Pacific — 34 companies (China 10, India 8)
- Europe — 31 companies (United Kingdom 11, Germany 5)
- North America — 17 companies (United States 15, Canada 2)
- Oceania — 8 companies (Australia 7, New Zealand 1)
- South America — 5 companies (Brazil 4, Argentina 1)
- The Middle East — 4 companies (Israel 3, UAE 1)
- Africa — 1 company (Nigeria)
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Although the number of payment & lending companies dominated this category, they saw a drop in number due to the rise in the number of wealth, insurance and multi-sector companies.
➤ Payment & Transactions — 27 companies
➤ Wealth — 19 companies
➤ Insurance — 17 companies
➤ Lending — 15 companies
➤ Multiple sectors — 13 companies
➤ Neo/Challenger banks — 9 companies
Top 10 Fintechs for 2019
Although China’s dominance of the Top 10 Fintechs tapered off somewhat this year, it maintained a strong presence with three companies in the top tier. Chinese companies were among the 7 of the top 10 companies represented in the list. India was represented by two companies on the list.
⓵ Ant Financial (China) — World’s Largest third party payments platform.
⓶ Grab (Singapore) — Using data & technology to connect millions of consumers to millions of drivers, merchants, and businesses.
⓷ JD Digits (China) — A data technology company to help businesses in finance, urban computing, agriculture, campus services & digital marketing operate with higher efficiency & lower cost.
⓸ GoJek (Indonesia) — Multifaceted platform providing more than 20 services to millions of users across Southeast Asia.
⓹ Paytm (India) — The largest digital payments company in India with more than 380 million registered users and 12 million merchants on board its platform.
⓺ Du Xiaoman Financial (China) — Employing smart technology to provide credit lending services to people.
⓻ Compass (United States) — First technology-enabled real estate platform to completely automate the buying & selling process and make it seamless.
⓼ Ola (India) — An online, on-demand car service based in Bangalore, India. Also making payments easier and simpler with Ola money.
⓽ Opendoor (United States) — Another real estate platform automating the process of buying & selling your home. Empowering the clients with the removal of intermediaries.
⓾ OakNorth (United Kingdom) — Providing lending solutions to small-and-medium-enterprises using its proprietary data and technology platform.
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➲ Capital flows continued to fuel the Fintech revolution — driving growth and innovation. Overall, the 100 companies in the list raised $18 billion in the last twelve months with lifetime investments of more than $70 billion. Of the 11 companies that have raised over $1 billion in the past 3 years, 8 are from the Asia Pacific.
➲ Established Fintech players attracted a bigger share of investments. 32 of the top 100 companies raised at least $100 million in the last twelve months, gaining significantly from the 26 in 2018 & 12 companies in 2017. The top 10 Fintechs raised over $1.25 billion in the same period.
➲ Notable Venture Capitalist companies included Sequoia Capital, SoftBank, Alphabet (Google’s Holding Company), BBVA and Tencent Holdings.
➲ Innovation at scale is the driving force that is changing the World — be it giants like Ant Financial which have been on the list for the past five years or the first time entrants like Sempo. These Fintechs serving more than 2.5 billion people combined with innovation is what is changing the global economy.
➲ China has established itself as the global Fintech leader but this year we see India emerge as a major force in the space, representing 23% of the global middle-class population. With 900 million mobile phone users but only 271 million bank accounts, the country can leverage the power of this Fintech disruption like no other.
➲ The Fintechs are globalizing. After rapidly achieving scale in the domestic markets, these companies are spreading across multiple jurisdictions. Notable examples include Grab, Ola, OakNorth, Revolut, Monzo, N26 & Klarna.
➲ A global trend of diversification is taking place among Fintechs. Companies that started off as monoline product propositions are expanding to other niches serving a broader spectrum of customer needs.
➲ The policy shift towards Open banking standards designed to put customers in control of their data is benefiting the Fintechs. Regulatory regimes like GDPR & PSD2, UK’s Open Banking regime or Australia’s Open Banking and Customer Data Right legislation have facilitated competition which has driven innovation, thus leading to better products & services for consumers.