The financial services technologies (FinTech) industry has had over 45 venture capital investments, equivalent to US$3 billion in global ventures in 2013. Kantox reported that the number of deals in 2014 and 2015 is projected to hit around 60-70, as the global growth rate of the industry reaches a 26%.
Moreover, Accenture’s “The Rise of Fintech: New York’s Opportunity for Tech Leadership” report on global investments in Fintech is expected to rise to US$8 billion by 2018 in wake of open-source software and cloud technology lowering the barriers to entry for startups.
Many startups have emerged since 2013, with new financial technologies to target sectors that are poorly supported by traditional financial institutions, such as student loans, asset management, stock brokerage and small business/merchants loans.
The following six startups help students, businesses, individuals and investors to save thousands to even millions of dollars by offering a more effective and direct way of dealing with loans, debts, transactions, and security.
San Francisco-based company Sofi was co-founded by CEO Michael Cagney to refinance federal and private student loans in the United States.
SoFi refinance both public and private student loans to a new loan which reflects on an individual’s credibility and status after the university graduation. The loans offered by SoFi helps students save US$11, 000 on average, by gathering investments alumni, individuals and institutions to offer a better interest rate.
Since 2011, SoFi has issued over US$2.5 billion in loans and received around US$2 billion dollars in investments. Some of the investors include former co-founder of Paypal and billionaire venture capitalist/entrepreneur Peter Thiel, Discovery Capital and Wicklow Capital.
Nok Nok Labs
Nok Nok Labs provides mobile applications a secure authentication method without the use of passwords. Using Multifactor Authentication Client (MFAC), Nok Nok Labs allows users to validate payments and transactions using fingerprint and voice recognition.
The feature of Nok Nok’s authentication method eliminates the need to distribute tokens for authentication, thus reducing costs of financial management applications dramatically.
The startup’s authentication technology impressed a Chinese multinational computer technology company Lenovo, and raised US$8.25 million in a Series C funding round from Onset Ventures, Raven Ventures and Lenovo.
With the funding round, Nok Nok Labs aims to “expand the business to take advantage of international opportunities, to meet growing demand in Asia Pacific” and to continue Nok Nok’s strategy of partnering with key regional, strategic investors.
German P2P bitcoin lending platform Bitbond supports small and medium sized online businesses and provides them with credit that are usually not accessible in banks.
Bitbond is the first lending marketplace focused on small businesses like online merchants on e-commerce platforms like E-bay or Alibaba.
The company has handled over 600 loans and currently supports over 10,000 users across 120 countries.
The startup recently raised €600,000 from Point Nine Capital and ResearchGate investor Christian Vollmann.
Wealthfront builds and manages over US$ 2.3 billion in globally diversified assets. The Economist explained that the startup manages portfolios for a fee of 0.25% a year, with sophisticated algorithms that measure risk tolerance and build a diversified portfolio.
According to TechCrunch, large banking/brokerage companies like Charles Schwab that manages trillions in assets also have started using unique algorithms to manage its assets.
The difference between the traditional advisors and brokerages like Charles Schwab and Wealthfront is that, Wealthfront has “saved its clients a total of nearly $10 million in fees.”
Founded by CEO Sohail Prasad, Equidate allows private investors to access top pre-IPO companies.
Equidate has “created contracts tied to the value of an employee’s shares, which have to be vested and owned by them. (Employees can’t participate if they just have options or if they have restricted stock units.)”, techcrunch reported.
Equidate has already connected billion dollar startups with private investors, including Pinterest, Airbnb, Palantir, and One Kings Lane.
TrueAccord is a debt management startup that works with businesses to recover unpaid bills effectively and to make the process of debt collection friendlier. The startup utilizes machine learning and data intelligence to set up payment plans for their clients until the debts are paid off.
Samet, the founder of TrueAccord explained “We want to bring transparency, ease of use and personalization, and that’s why our customers use us.”
Although the startup did not release any information on the number of debts or clients they handle, the startup aims to expand its user base with the multi-million funding round they have secured.