Written by Forbes
Investors poured more than $53 billion into fintech startups worldwide in 2019, according to Accenture. With entrepreneurs staging a frontal assault on centuries-old financial institutions, more of the pot than in years past went to digital-first banks and insurtechs.
One example is MoneyLion, a “neobank” whose app offers not only free checking accounts, debit cards and paycheck advances, but also managed ETF portfolios. With more than six million users, it’s making a first appearance on the Fintech 50 this year. Another one to watch is Dave, a $1-a-month app whose five million-plus users get help building their credit scores, plus checking accounts with no minimums or overdraft fees. Investors, including billionaire Mark Cuban, have put $76 million into Dave, and it’s already valued at $1.2 billion.
In insurtech, there are four new companies to break into the ranks, including Ethos, which uses predictive technology to quote term life insurance prices in 10 minutes and verifies applicants’ self-reported data with their medical and pharmacy records, so that most are approved without a medical exam. Investors, including VC firms and Jay-Z, Robert Downey Jr., Kevin Durant and Will Smith, have put $107 million into Ethos, which is now valued at $450 million, according to PitchBook.
In all, 19 companies on this year’s Fintech 50—our fifth-annual list—are first-timers. As always, we’re open to startups with good ideas, no matter how small. Propel has just $18 million in funding from Andreessen Horowitz and Serena Williams, among others, and it’s valued at $55 million. But its mobile app, Fresh EBT, is already enabling two million food-stamp recipients to check their balances, clip coupons electronically and hunt for jobs and social services. Founder Jimmy Chen, 32, grew up in a Kansas City family that had trouble putting food on the table and went on to Stanford and stints at LinkedIn and Facebook.
While new fintechs emerge, the valuations of later-stage companies are ballooning: 13 of this year’s picks are worth more than $2 billion, compared with eight last year. In 2019, payments giant Stripe saw its value swell by $13 billion to $35 billion—three and a half times the worth of the second most valuable fintech, Ripple. It took Digital bank Chime took just nine months to go from $1.3 billion to $5.8 billion in value.
A couple things all our Fintech 50 2020 picks have in common: they’re private companies with operations or customers in the U.S., and they’re making it easier, faster and cheaper to use financial services.
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