New York, a city famous for its financial sector, has long been an innovation stronghold. Nowadays, when technology combines with finance, fintech startups blossom in every season. Many of these are using technology to disrupt the innermost workings of the traditional finance industry.
NYC's financial industry is now more and more technology-oriented. JPMorgan, Goldman Sachs and more big names have positioned themselves as 'technology groups', increasing their investments in innovation all the time. Last month, Goldman Sachs promoted tech executives to their top committee. And according to Forbes, JPMorgan has a USD 11.4 billion technology budget this year, a 5.6% uptick from last year's USD 10.8 billion. Bank of America's IT spend was second, at USD 10 billion, followed by Wells Fargo at USD 9 billion and Citigroup at roughly USD 8 billion."
The total VC investment amount for the period between 2012 to 2019 is over USD 5 billion, and the total trading transactions constitute nearly 350 investment records. The above chart tells the story of capital as it raised interest in fintech several years ago – but it was not until 2018 that investment began to explode. In 2018, the funding volume was five times more than 2017, and the next year it had raised nearly 60%. The number of records shows the same pattern.
Currently, the Basel Committee on Banking Supervision divides financial technology into payment settlement, deposits, loans and fundraising, investment management and market facilities. Market facilities including almost all the technology we tend to hear of today, such as AI, blockchain, big data and cloud computing.
Among our 20 companies, 9 belong to the market facilities sector. The investment management and lending sector occupy 4 places and payment settlement occupies 3. In market facilities, AI is the most popular technology, then comes SaaS and blockchain. Companies on this list are very diversified and each its own focus, occupying a complex niche in the industry.
According to EqualOcean Analysis, these companies have generated a total of 12 funding records and raised USD 2.4 billion in funding since 2015. Fintech startups based in NYC are closely related to Wall Street and most management teams in these fintech firms have more than 10 years' experience in the financial area. But the CEOs or Co-founders seldom have a strong technology background.
The situation in China is very different. China's unicorn fintech startup Ant Financial has a background of E-commerce and is worth USD 150 billion – fintech in NYC is more diversified, with each company homing in on a particular target, while China's fintech startups expand their businesses in multiple directions, often to as many areas as possible.
AdvisorEngine is a wealth management platform for investment advisors. Investment advisors value client relationships and provide service through both face-to-face communication and completely digital, low-touch interaction.
Braavo Capital aims to help app companies to raise funding. It uses data, integration and automation to deliver performance-based funding that's customized for each company.
Bread powers customized pay-over-time solutions. They use technology to help retailers build much stronger customer relationships to grow sales and establish a reputation.
Chainalysis is a blockchain company that provides data and analysis for governments, exchanges and banks. They provide deeper insights to let customers what happens in blockchain and how people use cryptocurrency.
Climb is a lending company focused on helping students get enrolled in their dream schools and programs. They find and partner with schools that prepare students with high salary potential.
Digital Asset provides business application solutions with expert industry expertise and software development tools. They create their own programming language called DAML for distributed ledgers, blockchains and databases.
Eprodigy financial partners with the financial industry in New York to provide business financing and servicing solutions. They are an expert at merchant cash advance space, a front and back end software solution, automated underwriting, and ACH processing.
Forter helps retailers grow sales, lower costs, and improve customer experience via offering fraud solutions. It delivers real-time, completely automated fraud prevention for those online merchants.
Lemonade is a unicorn fintech company powered by AI and behavioral economics, providing renters and home insurance policies for homes, apartments, co-ops and condos in many US States and in Germany. Their recent most evaluation was USD 1 billion to USD 10 billion.
MoneyLion was founded in 2013 by a team of leading technologists and financiers, using superior analytics and machine learning-based technology to let customers control their financial goals through borrowing, saving and investing.
Octane Lending is a point of sale financing platform focused on niche consumer lending markets. Their web-based platform helps dealers save time by eliminating the need to rekey customer information and helps move more units by opening dealerships to more prime/subprime lending sources.
Petal card, Inc uses machine learning to analyze a customer's full digital financial record to make credit honest, simple and accessible.
Paxos is on a mission to modernize finance by mobilizing assets at the speed of the Internet. As the first regulated Trust company with blockchain expertise, Paxos is uniquely positioned to mobilize and custody assets digitally.
R3 is a financial innovation firm building the new operating system for financial services. It works with a broad ecosystem from both the private and public sectors to develop on Corda.
Socure provides consumers and businesses with a next-generation security SaaS solution to fight against the risk of identity theft and related fraudulent activities.
Stash is one of the fastest-growing consumer investing and banking digital platforms. It pioneers the future of personal finance by uniting investing, banking and education into one seamless experience.
ThetaRay is a provider of unknown threat detection solutions to critical infrastructure, financial institutions, and other verticals. Its advanced analytical solutions operate with unprecedented speed and accuracy, enabling clients to manage risk and detect various frauds.
TradeBlock offers financial institutions with a range of execution and analysis tools for digital currency markets. The company acts as a global source of data that shares analysis relating to cryptocurrencies, trading, regulations, mining, protocol updates, blockchain analysis, and economic developments.
Trumid Financial brings efficiency to credit trading through data, technology and innovative products. Trumid Market Center, the company’s electronic trading platform, provides corporate bond market professionals with direct access to liquidity and market intelligence.
YieldStreet provides effortless ways to institutional quality investments and believes the power of technology to drive equality and transparency. They connect accredited investors and borrowers to find asset-based investments and raise capital quickly.