Despite the sector’s funding challenges, some startups, particularly those serving other businesses, are thriving. Here is the Forbes Fintech 50 for 2024.
By Jeff Kauflin & Janet NovackForbes team
The last year It’s been painful for the fintech sector, with publicly traded fintech stocks languishing 50% below their late 2021 peak, even as the S&P 500 has reached new highs. Venture capital funding for fintech startups is even more depressed: it has fallen by more than 70%, from $141 billion globally in 2021 to $39 billion in 2023, according to CB Insights. Layoffs and sell-offs have multiplied.
Yet our new Fintech 50 2024 list is full of extraordinary entrepreneurs who have adapted and thrived in this environment. Three categories that primarily serve other businesses – Payments, Wall Street & Enterprise and Business to Business Banking – performed the best. They made up 27 of our 50 picks and seven of the top 13 winners on this year’s list, our ninth annual honor roll of the fintech industry’s most innovative private companies. This is unsurprising at a time when consumer-serving startups no longer have seemingly unlimited venture capital funds to devote to big marketing campaigns, and the real estate and crypto industries are facing to unique challenges.
(You can see the full Fintech 50 2024 list here.)
A fitting illustration for this perhaps boring, but innovative and valuable business services trend: list newcomer DataSnipper. Based in the Netherlands, the company uses artificial intelligence to match data from receipts or bank statements with expense records, saving accountants, currently in short supply, many hours. DataSnipper already has 1,400 clients, including Deloitte, Ernst & Young, KPMG and PwC, and after five years of growth as a bootstrapped company, it just raised $100 million at a billion-dollar valuation.
Cyber insurance is another strength of business-oriented fintech, driven by the continued growth of hacking and ransomware attacks. List makers Coalition and At-Bay are using technology – and their founders’ deep knowledge of how hackers work – to take a growing share of the $11 billion cyber insurance market. (Read more about the trend here.) Likewise, financial fraud, enhanced by artificial intelligence, is creating opportunities for fintech entrepreneurs. Three of the returning companies on our list – Alloy, Persona and SentiLink – aim to stop individual fraudsters, while newcomer Middesk helps its 600 clients, including traditional banks and other fintechs, verify that companies that attempts to open accounts or take out loans are legitimate.
To identify these winners, our team of nine reporters and editors analyzed hundreds of companies, evaluating everything from product newness to customer and revenue growth to management team diversity. We interviewed CEOs and industry insiders. To be considered, startups must be headquartered or have substantial operations in the United States and not be part of a public company.
Two shrinking categories on our list are real estate, blockchain, and crypto. High interest rates continue to batter the real estate industry, hurting startups that rely on home sales, mortgage refinancing or the value of commercial real estate. Only two real estate companies made this year’s list.
As for Blockchain and Crypto, with FTX founder and now convicted Sam Bankman-Fried in prison awaiting sentencing, and Binance founder Changpeng Zhao pleading guilty to multiple Bank Secrecy Act violations and resigning from his position as CEO, the industry is turning. the page. The focus now is on companies that can guide them through an era of increased regulatory oversight to build more sustainable growth. This is reflected in this year’s three crypto and blockchain Fintech 50 lists – infrastructure companies Chainalysis, Fireblocks and newcomer Gauntlet – which focus on regulatory compliance, security and business model optimization respectively ( and risk minimization) for decentralized finance.
In contrast, in 2022, nine crypto companies were listed on the Fintech 50, including FTX, which had recently been valued by investors at an outsized $32 billion, making it the third most valuable fintech company in the world. ‘America.
This brings another change compared to previous years: in 2024, we did not rank the most valuable fintechs, but we added information on the last time a company raised funds. Indeed, fintech valuations have fallen so sharply from their 2021 highs that the numbers are skewed by the last time a company raised money. For example, list member Ramp grew its customer base by 80% in 2023 to 25,000 customers for its business credit cards and other expense management services. Yet when it raised funds last August, its valuation was $5.8 billion, up from $8.1 billion at the start of 2022.
Oddly enough, two companies that were on our very first Fintech 50 list for 2015, and then disappeared from our list, made a comeback this year: robo-advisor Wealthfront and lending technology company Zest AI, which changed its name of ZestFinance in 2019. Thanks in part Thanks to rising interest rates and the addition of a new automated bond portfolio, Wealthfront’s revenue grew 150% in 2023 to $200 million , while its assets under management climbed to $55 billion. Zest AI also more than doubled its revenue in 2023, reaching $38 million. It uses AI to try to help lenders increase approvals while reducing credit risk.
Some of the newcomers on our list stood out for the unique niches they found. An example: Carry1st, created by Cordel Robbin-Coker, 37, licenses and publishes mobile games in Africa and runs a payment platform that allows in-app purchases across the continent for games as popular as Call of Duty: Mobile.
Another notable newcomer delivered a strong performance in a segment that already had an established leader. San Francisco startup Pulley helps private companies track ownership or “cap tables.” When its larger peer Carta faced customer backlash in January for sharing sensitive startup information with secondary market investors, Pulley pounced. CEO and co-founder Yin Wu took to X, formerly Twitter, to offer discounts to Carta defectors so they don’t pay on two contracts at once. Pulley now has 4,600 customers, up 109% since the start of 2023. That’s a far cry from Carta’s 40,000, but as our list seeks to honor these innovators with élan, Pulley has supplanted Carta on the list.
With additional reporting from Nina Bambysheva, Steven Ehrlich, Emily Mason, Javier Paz, Maria Gracia Santillana Linares, Rina Torchinsky and Hank Tucker.
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