FinTech Scenario in San Francisco- Companies are raising huge fundings quickly
It might not occur to you that you are participating in a revolutionary experience when you transfer some amount to your friends or family for food on apps like Venmo. But surely, with the changing times, fintech has turned its head in every direction of the landscape.
Whether it is paying for a coffee at a local coffee shop, buying movie tickets or even paying your medical bills, fintech is all around you. It has been used for many of the newest technological developments from payments to cryptocurrency. Apps like PayPal, Venmo and other such fintech apps are gaining popularity with the audiences with each passing day.
If we combine the latest technological developments with financial services or applications, fintech has supported businesses. It has greatly supported the startups and disrupted the industry. They are providing better services to businesses and individuals both alike.
Figure and SoFi
The San Francisco-based fintech company co-founded by Mike Cagney is named as Figure Technologies. Mike Cagney is a founder of a more established fintech company SoFi. The company is raising money once again. Figure had previously raised $120 million in equity funding from a gaggle of investors in the month of February. The investors involved are RPM Ventures, partners at DST Global, Ribbit Capital, DCM, DCG, Nimble Ventures, and Morgan Creek.
The company reported that it had sealed an up to $1 billion uncommitted asset-based funding ease on its own custom blockchain from Jefferies and WSFS Institutional Services in the month of May.
Paperwork filed by SEC depicts that the Figure has closed or is about to close on $103 million in Series C funding. Probably, investors are fascinated partially in the company’s growing spate of products.
Figure began granting home loans to older clients who aren’t having any income and have their wealth tied up in their homes. A fast-growing demographics show it has more lately begun to pursue after a demographic that Cagney knows well through SoFi, which is younger people wanting to refinance their student loans.
Figure spoke lately with American Banker regarding the company’s stake in competing for further straight with SoFi, indicating the $1.4 trillion in excellent loan debt as the principal reason it’s diving into the space, and with the “same mousetrap” that Figure has grown to speedily process home loans, which it then securitizes and sells.
Figure’s all financial services business is performed solely on its blockchain, Provenance, that has an extra native token, Hash. It is used to do both- access the blockchain and to memorialize the off-chain replacement of fiat currency.
Cagney co-founded Figure with his wife, June Ou. She is the company’s chief operating officer. She was the chief technology officer at SoFi. The other co-founders in the company include Alana Ackerson and Cynthia Chen. Ackerson was earlier the CEO of the Thiel Foundation. Chen was most lately an investment partner with DHVC (Danhua Capital), a venture funds firm based in Palo Alto, Ca.
As per the website of Figure, they are planning to start a money market product. The company has also discussed in the past of growing into other lines of business, including wealth management, unsecured customer loans, and monitoring accounts, all offered through partner banks.
Also, the other company SoFi has likewise been growing past student loan refinancing under the leadership of current CEO Anthony Noto. SoFi made partial share buying and exchange-traded repositories available to its users earlier this year. The company has also launched a mobile-first cash management account.
What to Expect for FinTech Capital in 2020- San Francisco or London?
San Francisco has a great growing competition when it comes to FinTech startups.
San Francisco was till now called the fintech (financial technology) unicorn capital of the world. 9 out of the world’s 29 fintech unicorns – private companies valued at more than $1 billion are based in San Francisco.
However, according to recent studies, London could soon overtake San Francisco. Till now, London had 7 unicorns of the FinTech world headquartered in the city. The recruitment agency Robert Walters and the research group vacancy soft based in London reported that London was increasing in the potential to threaten San Francisco’s historic dominance of the market. The FinTech sector in London has received more venture capital than any other city and they have secured 39% of all European fintech funding. Berlin’s FinTech sector secured 21% of the cash and Paris was able to secure 18% of the overall funding.
What’s notable in 2019?
Although crypto prices and ICOs collapsed the investment in fintech has surged over the years hitting more than $55 billion worldwide. In 2019, 19 fintechs are valued at $1 billion or more. Also, there are 20 startups making their appearance in the top 50 list. The areas with remarkable additions are payment technology and companies targeting the underserved audiences. The underserved include immigrants without U.S. credit histories or hourly workers living paycheck to paycheck.
FinTech startups are proving to be valuable partners or deadly competitors for the banks. The fintech innovation landscape is a daunting task when it comes to finding solutions for specific financial needs. In the San Francisco Bay Area’s Silicon Valley, it is all present near you right in front of your eyesight.
The global finance capitals are being re-invented in the silicon valleys and many large tech companies like Apple, Google, PayPal, Square, etc and the new generation fintech startups are reimagining the financial services that can be presented in the digital world.
What’s the take for you?
Remember, the rise of fintech can be both an opportunity and a risk. However, it is an opportunity for new entrepreneurs like you and risk for traditional financial institutions. According to PwC analysis, in the year 2020, 23% of the traditional financial institutions could be at risk due to fintech innovations. So, to stop this, many conventional institutions are partnering with new technological organizations.
Basically, all of this is happening to meet the need of the customers who wish to have everything at the tap of their screen. The fintech technology is a hot option right now which is thriving and has a lot of opportunities in the future. As JP Morgan’s CEO Jamie Dimon said, “Silicon Valley is coming.” Fintech companies are innovating the financial services and you too can join them to make the best of the opportunity.
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