LONDON — GP Bullhound, a boutique investment bank focused on tech, on Thursday published an in-depth report looking at the global fintech industry.
The report found 39 fintech companies around the world already valued at $1 billion or over, and found that global venture capital investment into the sector has risen almost fivefold in the past three years to reach $13.6 billion in 2016.
As well as identifying existing “unicorns” — private companies worth over $1 billion — GP Bullhound also picked out companies to watch. These are business, founded since 2000, that it believes could one day be worth over $1 billion. These calls are based on bankers’ analysis of growth, business models, and market opportunity.
GP Bullhound identified promising businesses in the alternative lending space, data analytics, digital banking, insurance, and asset management. Here are the 17 businesses that made the cut and, in GP Bullhound’s view, could be the next fintech unicorns:
LendInvest — Peer-to-peer mortgage platform
Based: London, UK.
What it does: Peer-to-peer mortgages, focusing on the short-term mortgage market where developers buy a property, do it up, and then sell it on.
Funding raised: £17 million in equity from Atomico.
Why it’s exciting: The startup has lent over £800 million to date, funding over 2,000 properties, and plans to get into the buy-to-let market.
Read more: ‘Online mortgage marketplace LendInvest shrugs off Brexit with 50% jump in investment,’ ‘A big investment bank just signed up to lend over £40 million on mortgage funding platform LendInvest,’ ‘‘Ripe for disruption’: Online mortgage platform LendInvest just raised £17 million to get into buy-to-let.‘
Prodigy Financial — Peer-to-peer university loans for overseas students
Based: London, UK.
What it does: Provides peer-to-peer student loans for people in emerging markets. The company taps into alumni networks to help fund promising students to study abroad.
Funding raised: £9.75 million.
Why it’s exciting: GP Bullhound highlights the fact that it’s a cross-border credit platform and says: “Attractive unit economics per high value loan will support as strong growth later.”
ID Finance — Online lending in Russia
Based: Barcelona, Spain.
What it does: Online lending and credit scoring in emerging markets like Brazil, Russia, and Georgia. Loans hit $96 million in 2016.
Funding raised: £46.7 million.
Why it’s exciting: ID Finance is only five years old but is already the number one online lender in Russia. It also has a defensible technological advantage. GP Bullhound says: “Proprietary and fully automated scoring model employs machine learning to analyse 10k data points in real time.”