00:00 Hi, everyone. My name is Jeff Coughlin. I'm a senior editor at Forbes, and I'm joined
00:07 by my colleague, Emily Mason, who's a reporter at Forbes. We both cover fintech, and we're
00:12 going to be here talking about our 2024 fintech 50 list, which is our ninth annual version
00:18 of our list of the most innovative private fintech companies.
00:23 Thanks for the intro, Jeff. So I guess list overall, like what are some themes that you're
00:27 noticing? Any notable trends pop out? Yeah, a few things. I would say among the companies
00:33 that we're doing better are payments companies, companies providing business banking services,
00:39 and other kind of back-end technology providers. And we see that a lot when, you know, the
00:45 industry isn't doing as well. You can't spend as much money on marketing to attract consumers.
00:50 And so that's what we're seeing is some of these back-end infrastructure companies doing
00:54 better. And among the companies that aren't doing as well and had kind of a lesser showing
01:00 on the list are personal finance companies, cryptocurrency companies, and real estate
01:08 companies. Who are some of the top players on the list this year?
01:12 Yeah, so speaking of payments companies, I think two that really stand out in that category
01:17 are going to be Stripe and Plaid. They might not be on the list for too much longer because
01:21 we only feature private companies and they've kind of been stirring IPO rumors for a couple
01:25 years now. Stripe reportedly at the end of last year told employees that they would make
01:30 a decision about going public in the next year. And Plaid hired its first ever chief
01:34 financial officer in October. So that's usually a sign that it might be on the horizon. So
01:40 that's something we're definitely watching. Another big company to keep an eye on is Mercury.
01:46 They're a digital bank for small businesses and startups and they had $95 billion in transactions
01:52 processed in 2023, which was a 95% jump from the year before. So that's definitely like
01:58 a strong showing from them. I think another one to kind of keep an eye on is probably
02:03 Wealthfront. They've been around since 2008 and they're a robo-advisor and they've really
02:08 kind of stuck it out even as they've had competition from incumbents come. So Vanguard and Schwab
02:13 have both launched their own robo-advisor competitors and they've really stuck it out.
02:18 I think they had, it was $200 million in revenue in 2023 and their assets under management
02:24 kind of continue to grow. So they're another strong player to like keep an eye on.
02:28 Yeah, that was a surprising one, especially with Wealthfront. You know, they've been around
02:31 a while, like you said, and to see them kind of really have such a big year where they
02:36 grew revenue so much was really surprising.
02:38 Yeah, and exciting for us. So that's cool.
02:42 Last year was kind of particularly rough for fintech startups. Like, do you want to talk
02:45 about kind of the market overall and what it's looking like right now?
02:48 Yeah, it was 2022 and 2023 were both really rough for fintech. And so what we saw was,
02:58 you know, still continued layoffs. We saw valuations falling. Venture capital certainly
03:05 is going through a dry spot for sure, continues to. I think venture funding in 2022 was around
03:14 $79 billion, which was already down a lot from 2021. And then it was down again to about
03:20 $38 billion in 2023, according to CB Insights. So tough, definitely another tough year for
03:27 fintech. Companies are really focusing on making their cash last longer, you know, burning
03:32 less money, trying to get closer to profitability. So another tough year. Some valuations that
03:40 fell as well that we saw. Ramp was one example. Another was Next Insurance, which fell from
03:47 about $4 billion in 2021 to $2.5 billion from a November 2023 fundraise. But that's just
03:55 part of the market. Just like the publicly traded fintech stocks, we're seeing the valuations
04:00 fall. We see that in the private market as well. It doesn't mean they're not good companies.
04:05 Both of those, Ramp and Next Insurance, are less. They're growing. Good businesses. And
04:11 so it's interesting to see that dynamic play out, though, with the market values falling.
04:16 But that doesn't mean the companies aren't actually doing well and still growing.
04:20 In talking about the rough year for fintech companies, were some of the fintech companies
04:25 affected by the layoffs that we've seen in the tech industry overall?
04:29 Yeah, I mean, I think fintech has not been kind of exempt from layoffs that have been
04:34 prevalent in the broader tech industry. I think in the public market, SoFi, Block, PayPal,
04:39 they're all big, really strong companies that have had to do layoffs. On our list, Navon
04:45 and Melio are two that have had to do layoffs in sort of recent history. And I think it,
04:49 again, just kind of goes to your point that even the strongest companies aren't really
04:52 exempt from the current environment, and they still are kind of having to take steps to
04:56 reduce their cash burn and sort of focus on shifting to profitability and running a really
05:00 efficient business. So that's been interesting. That's kind of a harsh reality of right now.
05:06 Are there any sort of particular services that have come up as like a new need in fintech
05:10 or like kind of a new green space that you're looking at?
05:13 Yeah, there are a couple that come to mind. So one is cyber insurance. And so cyber insurance,
05:21 it's interesting. It's essentially if you want to get insurance in case you get a ransomware
05:26 attack or in case you have, you know, someone falls for a phishing email, and that has grown,
05:33 continues to grow. And that's because cyber attacks keep growing. And similar to that
05:38 is fraud. Fraud keeps growing as well. And because of that, there's a growing need for
05:45 fraud prevention companies. So those are a couple of areas where we see a new need based
05:51 on market dynamics. A lot of the other fintech companies on our list are, it's kind of a
05:58 longer trend of, you know, how do you use technology to make financial services cheaper
06:04 and faster and more accessible? And so, you know, a lot of these companies that are making,
06:12 whether it's payments or bank accounts, cheaper and more accessible, that's kind of a multi-year
06:18 long trend that really has been around since the beginning of fintech.
06:22 Every year for the fintech 50, it's always interesting to look at who are the newcomers
06:26 to the list, because we have a lot of incumbents who make the list many times over. Or should
06:32 I say startups that are incumbents to the list. Who are some of the interesting newcomers
06:38 for this year on the 2024 fintech 50?
06:42 Yeah, newcomers are really exciting. We had 13 on the list this year. I think one that
06:47 was interesting to look at is Pulley. They're kind of a cap management tool for startups.
06:52 The CEO and founder, Yin Wu, is a serial entrepreneur, so she knows startups really well. And it's
06:58 kind of been interesting to watch some drama with one of their big competitors, Carta.
07:01 They kind of got into some hot water with clients because they were reaching out to
07:07 clients' investors and kind of asking them about the shares that they held and if they
07:10 were willing to sell. And that kind of made some of their clients upset. And she kind
07:14 of took to Twitter to push her own platform and say, "If you switch to us, we'll offer
07:19 you discounts." So that's been an interesting kind of dynamic to watch unfold.
07:25 I think the other one that's kind of been interesting is Data Snipper. They're an AI-powered
07:29 tool that lives in Excel, and it sort of helps audit and finance teams reconcile data from
07:35 a lot of different sources and make sure that expense records are adding up and that it's
07:39 all kind of come together in a more efficient way. So they're another really interesting
07:43 one to keep an eye on.
07:44 Yeah, I found that one interesting too. I think they recently hit a $1 billion valuation,
07:49 if I'm not mistaken, and their CEO is the former CMO of Marquetta.
07:54 Yeah, that's really interesting. There's three founders. They're all around 30 years
07:59 old, early 30s. They bootstrapped the business for the first five years. And then, as you
08:04 said, they've reached a $1 billion valuation. So that's really cool.
08:07 Well, Emily, thank you so much for joining me in this conversation. And I can't wait
08:12 to continue the conversation.
08:13 Thank you.
08:14 Thank you.
08:14 [END]
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