Top 5 American Fintech Companies to Watch Out For in 2020
Luxembourg’s minister of finance, Pierre Gramegna, once stated that fintech is not an enabler but a driving engine.
In 2018, fintech was a $13 billion industry, a figure that rose by $5billion during its boom in 2019. Financial technology companies, most of which were startups, were responsible for a 9% drop in funding across the other industries and they continue to grow in 2020.
Whether you deal with trade commodities or are a forex trader, here are the top five American Fintech companies you should know about.
Opendoor was founded in 2014 and is estimated to be worth approximately $3.8 billion. It was founded by Eric Wu, JD Ross, Keith Rabois, and Ian Wong and has reinvented how people buy and sell homes by giving homeowners a platform to sell their houses, receive bids and close in the shortest time possible.
With its headquarters in San Francisco, Opendoor has received recognition from Inman as being the most innovative in the real estate industry and has held this position for three years in a row. Currently, this company operates in 21 cities, has served over 75,000 customers, and rolled out an app last year.
Initially, Sofi was founded in 2011 by Sanford Business School as an alumni financing app that connected current students with past graduates.
It was exclusively meant to finance students but has grown to be a fully-fledged financial platform offering a broad range of services including personal loans, checking accounts, mortgages, insurance, etc. It is a modern hybrid of a savings and checking account but with different restrictions.
In 2018, Sofi was valued at $4.4 billion but dropped by $0.1 billion in 2019. It is currently valued at $4.8 billion.
Plaid was founded in May 2013 by Zach Perret, who is the current CEO and William Hockey, the former Chief Technology Officer, both of whom initially met as consultants. Plaid is a financial services company that develops platforms that enable payment apps to interact with their user’s bank accounts and track funds.
In 2019, Plaid had 2,600 clients and was able to expand into foreign markets; Spain, Ireland, France, and the UK. It also acquired Quovo, one of their competitors for $200 million and announced in January 2020 that Visa would be acquiring them for $3.5 billion. This company is valued at $5.3 million.
This financial services company was founded in 2013 by Vladimir Tenev and Baiju Bhutt and is headquartered in California. Robin Hood has a mobile app that enables traders to invest in EFTs, cryptocurrencies, options, and stocks.
In 2017, Robin Hood began to offer its users free stocks in exchange for referrals, and in 2018 it banned the trading of some high-risk penny stocks and introduced a waitlist for cryptocurrency trading. This list grew by more than 1.25 million by the end of day one.
2019 came with its own set of downfalls starting with a security breach in July 2019, followed by brokerages like Charles Swab completely eliminating their trading fees.
Robin Hood is currently valued at $7.6 billion.
Stripe is an internet-based payment system founded in 2010 by two Irish brothers; Patrick and John Collison. This platform allows people to make and receive online payments and has clients ranging from small ventures to major companies like Facebook.
This technology company is available in 27 countries including the UK and Germany and is currently in public beta mode in Portugal and private beta mode in Greece and Brazil. Stripe has participated in various investments like Paystack, a Nigerian payment processing company that is said to offer similar services.
It provides the following services; payment logistics, issuing of cards, atlas, CLI, Sorbet, and Terminal.
Stripe is currently valued at $35 billion.
What’s the future for the Fintech industry?
2020 will be the year for fintechs, and companies are focusing on providing their customers with holistic solutions. There has also been an acceleration of globalization of fintech companies as key players in the industry start scaling their companies across borders.
Even though fintech acquisitions aren’t uncommon, this year is marked by one of the largest acquisitions in the industry (Visa acquiring Plaid). If the current trends are anything to go by, the future of the fintech industry is solid.