Throughout most of 2021, the global fintech market remained quite resilient in the face of the global pandemic. While some industries managed to outperform initial predictions made by Wall Street analysts, fintech had an explosive year.
With the adoption of fintech products and services growing among consumers, the latest findings revealed that early 2019 saw the sharpest increase in consumers’ adoption of new fintech startups and companies. The Brazilian-based Nubank ranked the highest private financing in 2021, ranking in USD 1.5 billion, the largest the global fintech sector has ever witnessed.
With more than 75% of consumers using these services as of 2019, the coming year will only see more and more companies rapidly adapting and digitizing their services with the use of fintech.
More than any other public sector, including digital marketing, public relations, social media and more – fintech has still proven to outperform current economic conditions. It doesn’t place those who aren’t able to in a negative light, it simply proves how the new year will play host to the booming fintech industry.
The kick-off to the new year has already seen a plethora of exciting and innovative fintech startups breaking the glass ceiling on traditional financing – and investors are eager to jump onto the trend.
While we can expect some sought-after unicorns coming to life this year, and the global fintech industry exceeding the $26 trillion thresholds, here’s a brief look at the first few days of the year so far – and what we can expect for the coming months of 2022.
Russian API Pilots
The first week of 2022 starts relatively exciting, as the Russian FinTech Association (RFA) has commenced with their Open API pilots for Russian fintech companies. Currently, some financial service platforms on the Moscow Exchange and Sravni.ru are looking to be the first of many taking part in the new Open API pilots.
Why is this so significant?
This will enable Russian-based fintech companies to create and establish better and more advanced financial services, both internationally and domestically. Using Open API pilots, these fintech companies and startups will be able to measure whether or not the current Russian financial infrastructure can allow the onboarding of an advanced banking environment.
The integration between fintech companies and the current banking system will allow for more transparent and accessible financial services for consumers. It will also help modernize the current system and will give Russian fintech entrepreneurs more leeway to establish innovative banking and remittance services.
Analysts for Ernst & Young claimed that there were more than 2,300 IPO listings this year, bringing the total amounts invested up to $453 billion. The wild ride fintech has endured throughout 2021 revealed that some major contenders such as Stripe and Plaid will dominate markets if they decide to go public.
Currently, Stripe, Chime, and Plaid are a few of the largest fintech unicorns in the world who are still mainly privatized. And while we’re not quite sure if or not they’ll be going public in the coming year – investors are keeping a finger on the pulse.
But while some aren’t looking to go public soon, there is room for expanding – and in 2021 Stripe managed to raise more than $600 million, allowing them to expand into the European market.
Overall, we can see VC investment for these unicorns is on the rise, and smaller fintech startups aren’t slowing the pace at all. It’s simply a matter of time.
Fintech in Africa is booming and will continue in 2022
It’s been a long time coming, but fintech companies on the African continent saw their best year ever – with predictions that 2022 will look even better.
Across the continent, the four leading nations for fintech startups, Nigeria, South Africa, Egypt, and Kenya (the big four), have seen funding rounds well over $100 million. The biggest of course was OPay that raised around $400 million and conducted more than $2 billion worth of transactions throughout 2021.
The year is mostly off to a great start, as fintech coined the most throughout 2021, raising more than $5 billion in funding – more than any other sector.
But it’s not only here where investment deals are gaining better traction. In Israel, the Melio saw its market valuation reach a staggering $4 billion after striking a $250 million investment in a Series D funding round.
All over the world, investments are strongly being redirected towards the future of fintech startups in both developed and even more developing economies.
There is no other sector, aside from healthcare, sustainable energy, or perhaps eCommerce that has endured a staggering funding year in 2021. Fintech and crypto is also looking promising for the year ahead, with new startups making it easier and a lot more convenient for users to easily transact with their crypto between bank accounts.
With the year just starting, we can expect an even more exciting year on the horizon, as VC investors are looking to put their money on the future of digital banking and advanced remittance services.