Fintech

20 Fastest Growing Fintech Companies In 2024

Published

8 months ago

25 May, 2024

20 Fastest Growing Fintech Companies In 2024

In this piece, we will take a look at the twenty fastest fintech companies in 2024. If you want to skip our overview of the financial technology industry and all the recent trends and developments, then you can take a look at the 5 Fastest Growing Fintech Companies In 2024.

Just like nearly every other industry out there, like industrial manufacturing and healthcare, finance has also been significantly disrupted by the onset of computing. Modern day financial systems are significantly different from what we were used to just a couple of years back. Global inter connectivity has meant that transferring funds worldwide takes just a couple of minutes or days depending on jurisdictions. At the same time, consumers no longer have to go to their banks to access their money since online and internet banking has provided them with greater flexibility.

Similarly, just as today’s banking is vastly different from the past, banks are not the only financial companies that regular consumers and businesses can use to manage their money. A growing sector of the market is dominated by firms that are part of the financial technology industry. These firms can be firms that offer digital wallets, like PayPal Holdings, Inc. (NASDAQ:PYPL), or payment gateways like Visa Inc. (NYSE:V). Additionally, the global rise in Internet use has also provided humanity with its own set of digital currencies – the most popular of which is the cryptocurrency coin Bitcoin.

Like all other stocks, financial technology stocks are also dependent on the broader market for their performance. For most of these firms, a robust economy is good for price performance. This is due to the nature of their business models. Firms like PayPal and Block, Inc. (NYSE:SQ) benefit from a robust economy because people are more likely to use their services. This means that the firms earn more commission, and as a result, investors also feel more confident in betting on their shares for future growth.

To see how this works, let’s consider Block and PayPal’s share price performance over the past 12 months and 2022. Starting from NYSE:SQ, the biggest catalyst to its share price over the past year came in October 2023 when the firm released its earnings results for the third quarter of 2023. This revealed that its premier product, CashApp, doubled monthly active users from June for a fresh tally of two million. This also accompanied an all time record for payment volumes, with the figure jumping to a cool $113 million. Naturally, investors were pleased as the shares soared by 11% in the immediate aftermath of the results.

Story continues

Rewinding the hands of time to see how Block’s stock was doing in 2022 – when most of the market was convinced that a recession was just on the horizon – the shares sank a stunning 61% during the year. To jog your memory, in 2022 nearly all high growth and technology stocks, whether those in the consumer arena such as Apple Inc. (NASDAQ:AAPL) or others like Tesla, Inc. (NASDAQ:TSLA), had tanked and lost double digit percentages in the value due to rapidly rising interest rates and inflation. For Block, the downward spiral started at the tail end of December 2021 when it tried its hand at rebranding and jumped into crypto right at the cusp of Bitcoin’s share price crash.

However, while Block has done well over the past 12 months, PayPal hasn’t fared so well. Despite the fact that falling inflation, rising wages, and artificial intelligence have grown consumer and investor confidence in the stock market and the economy, PayPal is struggling because investors expect it to capture lucrative areas of the transaction processing market such as cross border payments. However, as other sources continue to contribute to growth, the stock is seeing restrained love despite the potential that artificial intelligence offers the payments service and digital wallet provider to streamline its services and reduce fraud. And just like Block, PayPal’s shares also bled 62% in 2022, with Q4 2021 earnings igniting a bloodbath after management chose to focus on revenue per user instead of user growth.

Yet, the future might be brighter for PayPal, and here’s what Wedgewood Partners, had to say about the firm in its fourth quarter of 2023 investor letter:

PayPal Holdings also contributed less to portfolio performance than most holdings during the fourth quarter. The total payment volume handled by PayPal during its most recent quarter grew +15%, which helped drive healthy revenue growth and +20% earnings per share growth. Critically, the Company’s new management team has significant opportunity to drive more revenue and earnings growth across the massive, multi-trillion-dollar payments addressable market. PayPal’s rapidly growing payment processing brand, Braintree, represents one of those revenue growth opportunities, either by raising prices, as 7 the Company had previously used a low-price strategy to establish a beachhead in this market, or by adding value-added services. PayPal’s branded checkout remains the largest volume and profit driver for the business, and we expect this to continue to track in-line with e-commerce growth in the near term, and eventually take share as the Company rolls out new features to its over +400 million users and +30 million merchants. We added to our position with the stock trading at just 10X forward earnings estimates during the quarter because there are many more long-term growth opportunities relative to most financial companies that trade for similar multiples and compared to technology companies that trade for much higher multiples.

With these details in mind, let’s look at some of the fastest growing financial technology companies. A couple of notable picks are Riot Platforms, Inc. (NASDAQ:RIOT), Marathon Digital Holdings, Inc. (NASDAQ:MARA), and Lemonade, Inc. (NYSE:LMND).

20 Fastest Growing Fintech Companies In 2024

A person depositing money into an ATM, reflecting the various banking services offered.

Our Methodology

To make our list of the fastest growing financial technology companies in 2024, we ranked the U.S. based holdings of the Global X FinTech ETF by their fiver year annualized revenue growth rate and picked the fintech companies with the fastest growth. A five year rate instead of a three year rate was chosen because it removes the impact of macroeconomic fluctuations of recent years.

20 Fastest Growing Fintech Companies In 2024

20. Sapiens International Corporation N.V. (NASDAQ:SPNS)

5 Year Annualized Revenue Growth: 12.18%

Sapiens International Corporation N.V. (NASDAQ:SPNS) is an Israeli software firm that serves the needs of the insurance industry. The shares Buy on average, and the average analyst share price target is $33.60. It joins Riot Platforms, Inc. (NASDAQ:RIOT), Marathon Digital Holdings, Inc. (NASDAQ:MARA), and Lemonade, Inc. (NYSE:LMND) in our list of the fastest growing fintech companies.

19. Cantaloupe, Inc. (NASDAQ:CTLP)

5 Year Annualized Revenue Growth: 12.95%

Cantaloupe, Inc. (NASDAQ:CTLP) is a small hardware and software company headquartered in Malvern, Pennsylvania. It provides payment hardware and services to businesses. It started 2024 off on a strong note after moving into the sports market through an acquisition.

18. Fidelity National Information Services, Inc. (NYSE:FIS)

5 Year Annualized Revenue Growth: 14.02%

Fidelity National Information Services, Inc. (NYSE:FIS) is one of the biggest financial technology companies in the world. It provides digital banking, fraud detection, and other associated services. The shares are rated Buy on average, and the average share price target is $74.30.

17. AssetMark Financial Holdings, Inc. (NYSE:AMK)

5 Year Annualized Revenue Growth: 14.27%

AssetMark Financial Holdings, Inc. (NYSE:AMK) is a mid sized financial technology company headquartered in Concord, California. It provides software products to financial advisors to help them with their professional tasks. Its latest performance report for March saw AssetMark Financial Holdings, Inc. (NYSE:AMK) maintain the growth trajectory via posting higher flows and platform assets.

16. Vertex, Inc. (NASDAQ:VERX)

5 Year Annualized Revenue Growth: 16.01%

Vertex, Inc. (NASDAQ:VERX) is an American software company that provides compliance, reporting, and other software products. It scored a win in January 2024 after IDC nominated Vertex, Inc. (NASDAQ:VERX) as one of the top players in the tax SaaS industry.

15. Open Lending Corporation (NASDAQ:LPRO)

5 Year Annualized Revenue Growth: 17.61%

Open Lending Corporation (NASDAQ:LPRO), as the name suggests, provides software and services that help lenders determine loan risk, pricing, and other parameters. Higher rates seem to have taken a toll on its financial performance, as the firm has beaten analyst EPS estimates in just one of its four latest quarters.

14. Intuit Inc. (NASDAQ:INTU)

5 Year Annualized Revenue Growth: 19.23%

Intuit Inc. (NASDAQ:INTU) is a California based company that helps businesses and others manage their daily finances, reporting, and compliance requirements. The firm has been doing well on the financial front as of late since it has beaten analyst EPS estimates in all four of its latest quarters.

13. Global Payments Inc. (NYSE:GPN)

5 Year Annualized Revenue Growth: 19.25%

Global Payments Inc. (NYSE:GPN) provides merchants, retailers, and other institutions with the tools to manage their payments, payables, and other financial functions. It is also one of the strongest rated stocks on our list, with an average share rating of Strong Buy and an average share price target of $156.63.

12. Mitek Systems, Inc. (NASDAQ:MITK)

5 Year Annualized Revenue Growth: 22.11%

Mitek Systems, Inc. (NASDAQ:MITK) is a California based company that enables businesses and other users to process and manage checks. It was one of the worst performing financial technology stocks in April 2024 after the first quarter results came with a net loss and a revenue miss.

11. Payoneer Global Inc. (NASDAQ:PAYO)

5 Year Annualized Revenue Growth: 26.15%

Payoneer Global Inc. (NASDAQ:PAYO) is an American firm that enables businesses to make and receive payments through a digital platform. The firm has struggled on the financial front as of late since it has beaten analyst EPS estimates in just two out of its four latest quarters.

10. Fiserv, Inc. (NYSE:FI)

5 Year Annualized Revenue Growth: 26.81%

Fiserv, Inc. (NYSE:FI) is a sizeable payments platform provider headquartered in Milwaukee, Wisconsin. Where others have struggled, it has continued to shine as not only has Fiserv, Inc. (NYSE:FI) beaten analyst EPS estimates in all four latest quarters but the shares are also rated Strong Buy on average. The average analyst share price target is $162.33.

9. HealthEquity, Inc. (NASDAQ:HQY)

5 Year Annualized Revenue Growth: 28.33%

HealthEquity, Inc. (NASDAQ:HQY) is a healthcare financial technology company that enables people to manage their expenses, make payments, and conduct other operations. The firm fed its share into the AI hype train in April 2024 when it released a survey that outlined significant interest in the technology among high ranking directors in the health benefits industry.

8. Bitfarms Ltd. (NASDAQ:BITF)

5 Year Annualized Revenue Growth: 34.06%

Bitfarms Ltd. (NASDAQ:BITF) is the first cryptocurrency firm on our list of the fastest growing fintech companies. It is a Bitcoin miner with a presence in the U.S., Canada, and other countries. The recent bloodbath in Bitcoin hasn’t done the firm any favors as it has missed analyst EPS estimates in all four of its latest quarters.

7. Shift4 Payments, Inc. (NYSE:FOUR)

5 Year Annualized Revenue Growth: 35.54%

Shift4 Payments, Inc. (NYSE:FOUR) is a payments processing company headquartered in Center Valley, Pennsylvania. The firm expanded its product portfolio in April 2024 after announcing new products and features for the hospitality industry. Shift4 Payments, Inc. (NYSE:FOUR)’s CEO Jared Issacman is known for his space exploration missions and is gearing up for yet another flight with everyone’s favorite company, SpaceX.

6. Upstart Holdings, Inc. (NASDAQ:UPST)

5 Year Annualized Revenue Growth: 39.68%

Upstart Holdings, Inc. (NASDAQ:UPST) is a California based software company that enables borrowers and lenders to connect with each other. One of the poorest rated stocks on our list, the shares are rated Hold on average, and the average share price target is $19.82.

Riot Platforms, Inc. (NASDAQ:RIOT), Upstart Holdings, Inc. (NASDAQ:UPST), Marathon Digital Holdings, Inc. (NASDAQ:MARA), and Lemonade, Inc. (NYSE:LMND). are some rapidly growing fintech companies.

Click to continue reading and see 5 Fastest Growing Fintech Companies In 2024.

Fintech

US Agencies Request Information on Bank-Fintech Dealings

Published

6 months ago

30 July, 2024

FinCrypt Staff

Federal banking regulators have issued a statement reminding banks of the potential risks associated with third-party arrangements to provide bank deposit products and services.

The agencies support responsible innovation and banks that engage in these arrangements in a safe and fair manner and in compliance with applicable law. While these arrangements may offer benefits, supervisory experience has identified a number of safety and soundness, compliance, and consumer concerns with the management of these arrangements. The statement details potential risks and provides examples of effective risk management practices for these arrangements. Additionally, the statement reminds banks of existing legal requirements, guidance, and related resources and provides insights that the agencies have gained through their oversight. The statement does not establish new supervisory expectations.

Separately, the agencies requested additional information on a broad range of arrangements between banks and fintechs, including for deposit, payment, and lending products and services. The agencies are seeking input on the nature and implications of arrangements between banks and fintechs and effective risk management practices.

The agencies are considering whether to take additional steps to ensure that banks effectively manage the risks associated with these different types of arrangements.

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Fintech

What changes in financial regulation have impacted the development of financial technology?

Published

6 months ago

30 July, 2024

FinCrypt Staff

Exploring the complex landscape of global financial regulation, we gather insights from leading fintech leaders, including CEOs and finance experts. From the game-changing impact of PSD2 to the significant role of GDPR in data security, explore the four key regulatory changes that have reshaped fintech development, answering the question: “What changes in financial regulation have impacted fintech development?”

PSD2 revolutionizes access to financial technology
GDPR Improves Fintech Data Privacy
Regulatory Sandboxes Drive Fintech Innovation
GDPR Impacts Fintech Data Security

PSD2 revolutionizes access to financial technology

When it comes to regulatory impact on fintech development, nothing comes close to PSD2. This EU regulation has created a new level playing field for market players of all sizes, from fintech startups to established banks. It has had a ripple effect on other markets around the world, inspiring similar regulatory frameworks and driving global innovation in fintech.

The Payment Services Directive (PSD2), the EU law in force since 2018, has revolutionized the fintech industry by requiring banks to provide third-party payment providers (TPPs) with access to payment services and customer account information via open APIs. This has democratized access to financial data, fostering the development of personalized financial instruments and seamless payment solutions. Advanced security measures such as Strong Customer Authentication (SCA) have increased consumer trust, pushing both fintech companies and traditional banks to innovate and collaborate more effectively, resulting in a dynamic and consumer-friendly financial ecosystem.

The impact of PSD2 has extended beyond the EU, inspiring similar regulations around the world. Countries such as the UK, Australia and Canada have launched their own open banking initiatives, spurred by the benefits seen in the EU. PSD2 has highlighted the benefits of open banking, also prompting US financial institutions and fintech companies to explore similar initiatives voluntarily.

This has led to a global wave of fintech innovation, with financial institutions and fintech companies offering more integrated, personalized and secure services. The EU’s leadership in open banking through PSD2 has set a global standard, promoting regulatory harmonization and fostering an interconnected and innovative global financial ecosystem.

Looking ahead, the EU’s PSD3 proposals and Financial Data Access (FIDA) regulations promise to further advance open banking. PSD3 aims to refine and build on PSD2, with a focus on improving transaction security, fraud prevention, and integration between banks and TPPs. FIDA will expand data sharing beyond payment accounts to include areas such as insurance and investments, paving the way for more comprehensive financial products and services.

These developments are set to further enhance connectivity, efficiency and innovation in financial services, cementing open banking as a key component of the global financial infrastructure.

Sebastian Malczyk

General Manager, Technology and Product Consultant Fintech, Insurtech, Miquido

GDPR Improves Fintech Data Privacy

Privacy and data protection have been taken to another level by the General Data Protection Regulation (GDPR), forcing fintech companies to tighten their data management. In compliance with the GDPR, organizations must ensure that personal data is processed fairly, transparently, and securely.

This has led to increased innovation in fintech towards technologies such as encryption and anonymization for data protection. GDPR was described as a top priority in the data protection strategies of 92% of US-based companies surveyed by PwC.

Arid Islam

Financial Expert, Sterlinx Global

Regulatory Sandboxes Drive Fintech Innovation

Since the UK’s Financial Conduct Authority (FCA) pioneered sandbox regulatory frameworks in 2016 to enable fintech startups to explore new products and services, similar frameworks have been introduced in other countries.

This has reduced the “crippling effect on innovation” caused by a “one size fits all” regulatory approach, which would also require machines to be built to complete regulatory compliance before any testing. Successful applications within sandboxes give regulators the confidence to move forward and address gaps in laws, regulations, or supervisory approaches. This has led to widespread adoption of new technologies and business models and helped channel private sector dynamism, while keeping consumers protected and imposing appropriate regulatory requirements.

George Blandford

Co-founder, UK Linkology

GDPR Impacts Fintech Data Security

A big change in financial regulations that has had a real impact on fintech is the 2018 EU General Data Protection Regulation (GDPR). I have seen how GDPR has pushed us to focus more on user privacy and data security.

GDPR means we have to handle personal data much more carefully. At Leverage, we have had to step up our game to meet these new rules. We have improved our data encryption and started doing regular security audits. It was a little tricky at first, but it has made our systems much more secure.

For example, we’ve added features that give users more control over their data, like simple consent tools and clear privacy notices. These changes have helped us comply with GDPR and made our customers feel more confident in how we handle their information.

I believe that GDPR has made fintech companies, including us at Leverage, more transparent and secure. It has helped build trust with our users, showing them that we take data protection seriously.

Dr. Rhett Stubbendeck

CEO & Co-Founder, Leverage Planning

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Fintech

M2P Fintech About to Raise $80M

Published

6 months ago

30 July, 2024

FinCrypt Staff

Application Programming Interface (API) Infrastructure Platform M2P Financial Technology has reached the final round to raise $80 million, at a valuation of $900 million.

Specifically, M2P Fintech, formerly known as Yap, is closing a new funding round involving new and existing investors, according to entrackr.com. The India-based company, which last raised funding two and a half years ago, previously secured $56 million in a round led by Insight Partners, earning a post-money valuation of $650 million.

A source indicated that M2P Fintech is ready to raise $80 million in this new funding round, led by a new investor. Existing backers, including Insight Partners, are also expected to participate. The new funding is expected to go toward enhancing the company’s technology infrastructure and driving growth in domestic and international markets.

What does M2P Fintech do?

M2P Fintech’s API platform enables businesses to provide branded financial services through partnerships with fintech companies while maintaining regulatory compliance. In addition to its operations in India, the company is active in Nepal, UAE, Australia, New Zealand, Philippines, Bahrain, Egypt, and many other countries.

Another source revealed that M2P Fintech’s valuation in this funding round is expected to be between USD 880 million and USD 900 million (post-money). The company has reportedly received a term sheet and the deal is expected to be publicly announced soon. The Tiger Global-backed company has acquired six companies to date, including Goals101, Syntizen, and BSG ITSOFT, to enhance its service offerings.

According to TheKredible, Beenext is the company’s largest shareholder with over 13% ownership, while the co-founders collectively own 34% of the company. Although M2P Fintech has yet to release its FY24 financials, it has reported a significant increase in operating revenue. However, this growth has also been accompanied by a substantial increase in losses.

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Fintech

Scottish financial technology firm Aveni secures £11m to expand AI offering

Published

6 months ago

30 July, 2024

FinCrypt Staff

Aveni, Investment Management, AI, NLP, UK

By Gloria Methri

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Artificial intelligence Financial Technology Aveni has announced one of the largest Series A investments in a Scottish company this year, amounting to £11 million. The investment is led by Puma Private Equity with participation from Par Equity, Lloyds Banking Group and Nationwide.

Aveni combines AI expertise with extensive financial services experience to create large language models (LLMs) and AI products designed specifically for the financial services industry. It is trusted by some of the UK’s leading financial services firms. It has seen significant business growth over the past two years through its conformity and productivity solutions, Aveni Detect and Aveni Assist.

This investment will enable Aveni to build on the success of its existing products, further consolidate its presence in the sector and introduce advanced technologies through FinLLM, a large-scale language model specifically for financial services.

FinLLM is being developed in partnership with new investors Lloyds Banking Group and Nationwide. It is a large, industry-aligned language model that aims to set the standard for transparent, responsible and ethical adoption of generative AI in UK financial services.

Following the investment, the team developing the FinLLM will be based at the Edinburgh Futures Institute, in a state-of-the-art facility.

Joseph Twigg, CEO of Aveniexplained, “The financial services industry doesn’t need AI models that can quote Shakespeare; it needs AI models that deliver transparency, trust, and most importantly, fairness. The way to achieve this is to develop small, highly tuned language models, trained on financial services data, and reviewed by financial services experts for specific financial services use cases. Generative AI is the most significant technological evolution of our generation, and we are in the early stages of adoption. This represents a significant opportunity for Aveni and our partners. The goal with FinLLM is to set a new standard for the controlled, responsible, and ethical adoption of generative AI, outperforming all other generic models in our select financial services use cases.”