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Breaking into the Piggy Bank: Focus on FinTech

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As there is not much time left to apply for Seedcamp Week London (applications close 17th August) we’ve decided to take stock and look at our current Seedcamp family. We gave an overview of the numbers behind Seedcamp in our most recent infographic but this time we wanted to focus on a few areas in particular. Let’s crunch some numbers and see how Seedcamp is investing in the FinTech sector.

An Overview

Let’s start by getting some basic facts about our FinTech startups.

PieChart1 Seedcamp as a seed fund is very horizontally focused so for FinTech to represent such a large portion of our portfolio is indicative of how significant this sector is. We are excited by the companies we have worked with and already have a great network of experts in place to support FinTech companies.

Unlike vertical accelerators or incubators we do not focus on one specific industry as our investment thesis is based on supporting capital efficient businesses. As industries evolve they become more and more cost efficient to serve. Therefore our thesis evolves alongside the startups that rapidly disrupt, expand, and alter industries. Since 2007, we have invested and built expertise across different sectors, including SAAS, Fintech, Marketplaces, Analytics, Mobile, B2B and B2C.  You can read more about this topic here.

piechart years

After investing in one FinTech startup in 2007 Seedcamp didn’t invest in another until 2011. This quiet period coincides with the market crash and reflects how the industry took a few years to recover, affecting FinTech startups too. But once the financial services were more steady FinTech has been a stable sector, with Seedcamp investing in at least 3 FinTech startups every year since 2011. In 2014, we’ve already invested in more FinTech companies than any previous year, and we’d love to invest in even more.

The Teams

piechartlogos

Here are the 12 teams we have invested in and even though they are all from the FinTech industry their products differ vastly. From servicing digital currencies and managing your cashflows, to microfinance solutions and providing accounting tools, Seedcamp has got the area covered and we’re helping our FinTech startups grow rapidly. TransferWise recently announced that they have transferred £1 billion (1,000 million) since launching only three years ago.

Money Raised

FinTech startups have a great track record by being in the Seedcamp family. We can see in the data below how successful they have been in raising follow on investment, owning a large percentage in our total $190million raised.

Financial services is a money-heavy industry and an area that has been ripe for disruption. For a while it felt that banks were too big to break but slowly startups have been chipping away at their services, which in turn encourages more startups to tackle this mammoth industry.

Why FinTech?

FinTech is an area that has received a lot of attention in recent years, and rightly so. The financial services are a traditional industry that has been put under pressure to improve their transparency,  customer management, and overall experience.  Customers are getting used to services being quicker, online, and mobile friendly and the rapid advances in technology has created widespread disruption. FinTech was not immune to this wave of innovation and now we’re at a point where FinTech no longer simply means mobile payments, but also peer-to-peer lending, equity crowdfunding, and money transfer services.

Globally FinTech financing has tripled over the past five years and it is doing especially well in Europe, with the UK and Ireland-based companies taking the lion’s share of Europe’s Fin Tech deals.

“We’re seeing a clear trend of highly-skilled fintech talent seeking opportunities in forward-thinking tech companies, rather than traditional financial firms,” Elliptic CEO James Smith told CoinDesk, “which means we have many great options in terms of growing our team.”

This is an interesting point, and a trend that is being reflected across many industries. From students just out of university to seasoned professionals, more and more workers are favouring the startup-style of work. Instead of joining a big corporation it is much more appealing to start your own company, co-found a project with friends, or join an established startup.

Raise or Fold?

What’s next for FinTech? Will this sector keep growing or will other areas start stealing the lime-light? A recent report concluded that

The digital revolution is radically re-shaping just about every aspect of the banking industry, from customer service expectations to consumers’ understanding of what a bank is. It is also enabling companies to venture into other industries at amazing speeds.

Screen Shot 2014-08-01 at 14.18.56 copyThis re-shaping allows startups to enter the market early, quickly, and become leaders in that field. Of course, banking is just one small area of FinTech, meaning that the potential for growth in other areas is estimated to be huge.

FinTech is a wildly exciting sector to be involved in and we’re looking for more FinTech startups to invest in. We’ve got great traction, global connections, and an established network of mentors and investors with experience in financial technology. With Seedcamp Week London just a month away, there is still time to apply for the chance to join the Seedcamp family.

 

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