Financial technology, or FinTech, applies technological innovations ‒ such as software, mobile devices, data networks and accurate analytics ‒ within the financial services industry. These innovations address the challenges that have faced financial institutions for years. Fueled by massive funding, FinTech companies have increased dramatically in number – from about 1000 in 2005 to over 8000 in 2016. These companies have introduced improvements that decrease the likelihood of human error, minimize audit risks, reduce economic crime or fraud, enhance management visibility and improve tax compliance.
We have compiled a list of 12 pioneering Fintech companies that have revolutionized the financial services industry with unique innovations. Here they are (in alphabetical order):
1. BioCatch – Founded in 2011 by engineers in neural science research, machine learning, and cybersecurity, Biocatch uses behavioral biometrics to provide authentication and malware detection solutions for web and mobile banking applications. The BioCatch platform develops behavioral biometric profiles of online users to recognize a wide range of human and non-human cybersecurity threats. The Tel Aviv- and New York-based company monitors more than 5 billion transactions per month for banks spanning the globe and won the Global Fintech Award at the 2016 MAS’ Singapore Fintech Festival.
2. BlueVine – BlueVine is an online provider of working capital financing to small and medium-sized businesses in a wide range of industries. As an alternative lender, BlueVine offers a factoring credit line of $20,000 to $2 million and provides an online, cloud-based invoice factoring service. Launched in 2014 by Eyal Lifshitz, Nir Klar and Moti Shatner, the company reportedly funded nearly $200 million in working capital in 2016. A winner of Innovation Project 2016 in the Best Small Business category, BlueVine is backed by leading venture capital firms and is based in Redwood City, CA.
3. Dopay – Dopay is a cloud-based payroll platform that allows employers to pay people who don’t have a bank account (two billion people worldwide according to the startup) without having to deal in cash. Founded by Dutch serial entrepreneur Frans van Eersel in 2013, the automated platform simplifies payroll processes for finance departments, such as calculating salaries, emailing payroll slips and submitting government forms. Employees can get their salary paid into a Dopay account, which comes with a pre-paid Visa card to use at ATMs, in-store or online, as well as an app for managing their finances on their phone. The company raised $2.4M (£1.8M) in a pre-series A funding round led by Techstars Ventures and Force Over Mass Capital in January 2016.
4. DueDil – Duedil compiles information on private companies to help businesses do their due diligence (hence the name) in order to find opportunities and evaluate risk. The UK-based platform pulls together data from thousands of sources including company websites, financial filings, news reports, registry data, trademarks, and country court judgments. This information is then searchable by company and presented in a user-friendly online interface. Since 2011, DueDil has raised nearly $30M (£20.6M) from investors including Oak Investment Partners, Passion Capital and Notion Capital, and have landed key customers such as Royal Mail, Stripe and Kuoni.
5. Lemonade – Founded by Israeli executives formerly with Fiverr and Powermat, Lemonade offers a new way for New Yorkers to buy homeowner’s and renter’s insurance. The online and mobile platform uses bots and machine learning to deliver customized insurance packages and handle claims. Started in December 2015 with a $13M investment, Lemonade raised an additional $34M in December 2016 and plans expansion to other US states. Lemonade won Best New Startup of the Year at the 2017 Geek Awards.
6. Receipt Bank – Receipt Bank was established to solve a tedious business task: bookkeeping. Clients email invoices and expense claims to a dedicated Receipt Bank email address, and the cloud-based software automatically extracts the data and uploads it into the platform. The software integrates with existing cloud-based accounting software and delivers downloadable spreadsheets, a convenience for accountants and small businesses. Receipt Bank raised a massive $50M (£38.6M) in a Series B funding round led by US VC fund Insight Venture Partners in July 2017. This followed a $10M (£7M) Series A funding round led by Kennet Partners in February the year before.
7. Robinhood – Founded in 2013 by Vladimir Tenev and Baiju Bhatt, Robinhood is a smartphone app that allows individuals to easily invest in publicly traded companies without paying a commission. The company offers fast execution, real-time market data, and smart notifications. As of March 2016, Robinhood had nearly one million customers and had raised a total of $66 million in venture capital funding.
8. Stripe – Founded by brothers Patrick and John Collison in 2010, Stripe is a payment platform geared for Internet e-commerce. Similar to Paypal, Stripe’s APIs and functionality allow both private individuals and businesses to accept payments over the Internet for subscription services, on-demand marketplaces, e-commerce stores, or crowdfunding platforms. Currently operating in 25 countries and handling billions of dollars every year, in October 2016 Stripe was ranked number four on the Forbes Magazine Cloud 100, a list of companies that engage in cloud computing.
9. Transferwise – While working for Skype in London, Taavet Hinrikus grew tired of paying fees when transferring money back to Estonia to pay his mortgage. Along with Kristo Käärman, he launched Transferwise in 2011 as a peer-to-peer money transfer platform. The online platform allows individuals and businesses to convert currency using a transparent calculator tool which indicates both exchange rate and the Transferwise fee, which is typically 0.5 percent for GBP transfers. Available in 59 countries covering 504 currency routes, Transferwise has moved over £500M every month globally, saving £22M in hidden charges.
10. TravelersBox – TravelersBox offers a solution for travelers with leftover foreign currency. Automatic kiosks in airports located in countries around the world – including Canada, Georgia, Israel, Italy, Japan, The Philippines and Turkey – with more countries on the way — enable travelers to use their leftover cash currency to redeem gift cards, add to their PayPal or Viber Out account or make a charitable donation. TravelersBox is authorized by the local banks and port authorities in each location. Founded by Dror Blumenthal, Idan Deshe, and Tomer Zussman, TravelersBox has thus far raised $15 million in investments.
11. VATBox – Founded in 2012 by Isaac Saft and Noam Guzman, VATBox has streamlined the VAT recovery process for businesses by introducing a single, interconnected, cloud-based system that detects and recovers VAT wherever the tax is charged. Via this system, VATBox can uncover and reclaim all VAT due to the company, down to the smallest invoices, thereby saving the company time and money over the short and long term. The issue of human error and manually reviewing line items on expense reports have been taken out of the equation using Vatbox’s automated financial technology. VATBox is currently servicing companies in over 40 countries around the world and has raised nearly $50 million in investments since 2015.
12. Wealthfront – Wealthfront is an automated investment service firm founded in 2011 by Andy Rachleff and Dan Carroll that provides financial planning and investment services using a technology known as “roboadvisors.” The automated platform analyzes customer data to uncover insights about finances and offers customized solutions. As of August 2017, Wealthfront had more than $7 billion of assets under management. Customers pay an annual advisory fee, but there are no trading commissions or other hidden fees.