Finovation Friday | Finovate Data and Trends

I wanted to see if I could draw any insights from the presenter list for Finovate next week. As one of the largest fintech conferences with 70+ companies presenting, it provides a good overview of the general fintech landscape. It is not perfect since the organizers do try to keep a good diversity among presenting companies, and the Fall conference being in New York could also influence the companies chosen. However, the following data may be interesting.

I compared Fall 2015 with Fall 2016 to see the changes over the past year. I summarized business models in three ways: B2C, B2B (merchants, small business, etc.), and B2Bank (incumbents). I expected to see more in the B2Bank channel relative to last year, given that I feel like the narrative has been shifting from “destroying” to partnering with banks. From the chart below, you can see that while B2Bank is the largest portion, is is pretty steady year-over-year. However, B2C has dropped in favor of more B2B. I believe this has more to do with the organizers wanting to keep the list balanced as opposed to a steady climate.

 

As expected, the vast majority (90%) of companies are startups. Both this year and last year, roughly half of the startups have funding data in Crunchbase. I was able to find around $567MM in funding from last year’s startups, and this year seems less at around $435MM (obviously incomplete data). In 2016, startups with prior funding rounds raised a median of $7MM inception-to-date.

There were a few notable changes in fintech subindustries. First, there are no small business marketplace lenders this year — last year there were two, and they were the only lenders. This year, there is a mobile-based auto financing app, and a mortgage marketplace website. The shift away from marketplace lending is not surprising given recent activity in that sector. Further llustrating the trend is presenter LendingFront, who sells technology to banks to help them do online small business lending.

Second, the number of startups focused on biometric identification and authentication is much higher. In 2015, there were four — this year there are eight presenting companies, covering voice and eye biometrics and other forms of identification/authentication.

Surprisingly, there is only one chatbot company (Kore, a platform to help business build their own bots). There was one last year as well (Dyme), but given the explosion in bots over the past year, I expected to see more. No VR yet.

I will follow up in future issues on some of the demos and companies I met — stay tuned!

Pending IPOs
Except some big IPOs from Asia next year. Ant Financial is planning a Hong Kong IPO for the first half of 2017, and was recently valued at $60 billion after raising $4.5 billion earlier this year. Zhongan, the Chinese fully-digital insurance company, is considering an IPO in the next 12–18 months. They were valued at $8 billion in their latest funding round from 2015, and Ant Financial owns 16% of the company. Finally, Chinese online lender Lufax may also IPO in Hong Kong next year, after being valued at $18.5 billion at their last round.