Despite the funding challenges faced by the financial technology industry, there are startups that have managed to thrive, especially those serving other businesses. Forbes has released its annual Fintech 50 list for 2024, highlighting the hottest fintech startups in the industry.
The past year has been tough for fintech, with publicly traded stocks in the sector falling 50% below their peak in late 2021, while the S&P 500 reached new highs. Funding for fintech startups has also dropped significantly, with a decline of over 70% from $141 billion worldwide in 2021 to $39 billion in 2023, according to CB Insights. Layoffs and fire sales have become prevalent.
However, despite these challenges, Forbes’ new Fintech 50 list showcases entrepreneurs who have adapted and thrived in this environment. The list is dominated by three categories: Payments, Wall Street & Enterprise, and Business to Business Banking. These categories account for 27 out of the 50 startups on the list, including seven first-time honorees. This strong showing is not surprising, as startups focusing on consumers no longer have access to unlimited venture capital funding for extensive marketing campaigns, and sectors such as real estate and crypto face unique difficulties.
One standout company on the Forbes Fintech 50 list is DataSnipper. Founded in the Netherlands, DataSnipper leverages artificial intelligence to match data on receipts or bank statements with expense records, saving accountants significant time. The company already boasts an impressive client base of 1,400, which includes top firms such as Deloitte, Ernst & Young, KPMG, and PwC. After bootstrapping for five years, DataSnipper recently raised $100 million at a valuation of $1 billion.
Cyber insurance is another thriving segment in the fintech industry, driven by the rise of hacking and ransomware attacks. Startups like Coalition and At-Bay are capitalizing on this trend by utilizing technology and the founders’ deep understanding of hackers to capture a growing share of the $11 billion cyber insurance market. Similarly, financial fraud, enhanced by artificial intelligence, presents opportunities for fintech entrepreneurs. Returning companies on the Fintech 50 list, such as Alloy, Persona, and SentiLink, focus on identifying and preventing individual fraud, while newcomer Middesk helps traditional banks and other fintechs verify the legitimacy of businesses applying for accounts or loans.
To compile the Fintech 50 list, Forbes’ team of nine reporters and editors evaluated hundreds of companies based on criteria such as product innovation, customer and revenue growth, and leadership team diversity. They conducted interviews with CEOs and industry insiders. Startups considered for the list had to be headquartered or have substantial operations in the U.S. and not be part of a public company.
While some categories on the Fintech 50 list have shrunk, such as Real Estate and Blockchain and Crypto, others have experienced growth. High interest rates continue to impact the real estate sector, adversely affecting startups dependent on home sales, mortgage refinancing, or commercial real estate values. Only two real estate companies made this year’s list. In the case of Blockchain and Crypto, the industry is undergoing significant changes. With key figures like Sam Bankman-Fried and Changpeng Zhao facing legal issues, the focus now is on companies that can navigate increased regulatory scrutiny and foster sustainable growth. This year’s Fintech 50 list includes three crypto and blockchain companies: Chainalysis, Fireblocks, and newcomer Gauntlet, each offering unique expertise in regulatory compliance, security, and decentralized finance optimization.
Unlike in previous years, the Fintech 50 list no longer ranks the most valuable fintech companies. Instead, it provides information on a company’s last funding round. Fintech valuations have declined considerably from their 2021 highs, making valuations skewed by the timing of the last funding round. For instance, Ramp, a corporate credit card and expense management services provider, expanded its client base by 80% in 2023, reaching 25,000 customers. However, its valuation fell from $8.1 billion to $5.8 billion when it raised funds in August 2024.
Reappearing on the list after initially being included in Forbes’ inaugural Fintech 50 for 2015 are Wealthfront and Zest AI. Wealthfront, a robo-advisor, witnessed a 150% increase in revenue in 2023, reaching $200 million, while its assets under management grew to $55 billion. Zest AI, formerly known as ZestFinance, doubled its revenue in 2023, amounting to $38 million. The company employs artificial intelligence to assist lenders in increasing approvals while minimizing credit risk.
Among the new entrants on the Fintech 50 list are startups with unique niches. Carry1st, founded by Cordel Robbin-Coker, licenses and publishes mobile games in Africa and operates a payments platform that enables in-app purchases across the continent for popular games like Call of Duty: Mobile. Another noteworthy newcomer, Pulley, based in San Francisco, specializes in helping private companies track ownership or cap tables. When the larger company Carta faced backlash for sharing sensitive startup information with secondary market investors, Pulley seized the opportunity. CEO Yin Wu offered discounts to Carta defectors, resulting in a 109% customer growth since the beginning of 2023. Pulley now boasts 4,600 customers and has earned a place on the Fintech 50 list, surpassing Carta’s 40,000 customer count.
The Forbes Fintech 50 list for 2024 showcases the resilience and adaptability of fintech startups amid challenging times. Despite funding obstacles, startups serving other businesses have thrived, and entrepreneurs continue to innovate in various categories. As the industry evolves and regulatory scrutiny intensifies, the list draws attention to the movers and shakers driving impactful change in the fintech landscape.
