The value of fintech shares continues to skyrocket, making fintech companies an increasingly valuable investment.
In the first three quarters of 2021, investments were poured into fintech companies, almost doubling total investments in fintech throughout 2020, according to new reports from PitchBook.
Fintech startups have matured in recent years, with larger companies now the main players in the venture capital sector. This means that newer fintech companies can expect massive rounds of financing as investors reduce their faith in the staying power of fintech on the stock market.
Conventional wisdom about fintech in recent years has been that the industry would never become a major player in the financial services industry. This idea has been completely refuted by the strong investment of the last year and a half.
Many of the major fintech players have become desirable for traditional financial institutions looking to upgrade their increasingly obsolete systems. Fintech companies have been spectacularly successful in creating products that appeal to modern consumers for their convenience, while proving to be a viable alternative to traditional financing channels.
Several of the top fintech players have had very successful rounds of funding in 2021.
- Stripe, which raised $ 600 million and saw its valuation increase to $ 95 billion
- FTX, which raised $ 900 million and now has a valuation of $ 18 billion
- Chime, who raised $ 750 million for a $ 25 billion valuation
While some still fear that fintech companies will represent new competition for traditional banking institutions, they are more likely to be simply a new part of the financial ecosystem, he said. Bardya Ziaian, a Canadian entrepreneur who has founded several fintech companies.
Traditional banks such as Citigroup and JPMorgan have recently reported continued growth and value in the stock market, although fintech has received massive funding from investors who see them as the future of the financial industry.
“It shouldn’t be so amazing,” Bardya Ziaian dit. “Most people now use some kind of digital payment system that makes the most basic transactions more convenient, simplified and transparent.”
While fintech has paved the way for a financial revolution with its more customer-centric banking approach, there are still other disruptive elements to come.
The next phase of growth in property technologies is likely to be to harness the power of the blockchain. This is one of the main conclusions of Visma | The Onguard Fintech Barometer, which has several years of data on Fintech companies.
According to Visma research, the number of organizations that want to experience the digital transformation in the next 6 to 11 months has more than doubled from 17% in 2019 to 35% in 2021.
Of these, about two-thirds, or 65 percent, have already adopted the technology or discovered the first steps for adoption. This is an increase over 2018, when the figure was 51 percent.
Research clearly shows that the financial sector is increasingly aware of the need to adopt fintech services and other digital transformation strategies, especially given the economic impacts of the pandemic, according to an article in Fintech magazine.
“Four years ago, no one could have predicted the kind of world we would be living in today, and our findings have really demonstrated the impact that last year’s challenges have had on the attitudes of finance professionals towards issues like now innovation and fintech, “said Raymon van Viegen, chief financial officer of Visma On guard. “This translates into a growing trend toward digitalization, data-driven knowledge, and a growing revolution in fintech adoption, with more organizations embarking on digital transformation initiatives with enthusiasm in shorter periods of time than in previous years.” .