Seven Australian fintechs have been ranked among the world’s leading startups in the 2019 Fintech 100, produced by fintech investment firm H2 Ventures and KPMG Fintech.
Four of the seven are payments companies.
Global payments unicorn Airwallex is the highest ranked Australian firm at no. 32 on the Top 50 Established firms up from 49th place last year. Three Australian ventures made the established wlist with neobank Judo at no. 33, with buy now, pay later service AfterPay Touch at 47.
The Top 50 Emerging firms list, features four Australian fintechs included mortgage provider Athena Home Loans, voice analysis engine Daisee, disaster response provider Sempo and smart receipts app Slyp. All four were founded in 2017 – the same year Judo emerged.
Airwallex co-founder and CEO Jack Zhang said they were delighted to be named Australia’s number one fintech.
“We are proud of the positive impact we’ve had on businesses all around the world, by transforming the way they manage their international payments,” he said.
“2019 has been Airwallex’s strongest year yet. We’ve grown significantly in all aspects of the business, and are closing the year with over 400 employees across nine global offices. With ambitious and exciting plans in the pipeline, we look forward to rising to even greater heights in 2020.”
KPMG Australia’s global co-leader for KPMG Fintech, Ian Pollari, said Australia’s fintech ecosystem continues to perform well with new players also emerging.
“Globally, we have seen a rise in companies from across the Asia Pacific (including China) which represent the top 6, and 7 of the top 10 fintech companies in 2019 with China again securing the most top 10 positions,” he said.
“In 2019 we have also seen the emergence of India as a fintech force taking out 2 top 10 positions and with 8 companies on this year’s list in total.”
While payments and transaction companies make up more than half (27) of the ranked firms, H2 Ventures founding partner Toby Heap, said there’d been a fall in the number of payments and lending companies making the Fintech 100, replaced by wealth, insurance and multi-sector companies.
“This year’s Fintech 100 reveals a significant increase in venture capital backing of fintech companies. The companies on the 2019 List have raised over US$70 billion in venture capital (a 35% increase on last year’s figure) and over US$18 billion of capital in the past 12 months,” he said.
China’s Ant Financial topped the list for the second year running. The nation has dominated the Fintech 100 for the past three years and three Chinese fintechs feature in the Top 10.
The 2019 Fintech 100 top 10:
1. Ant Financial (China) is the world’s largest third-party payments platform.
2. Grab (Singapore) uses data and technology to improve everything from transportation to payments across a region of more than 620 million people.
3. JD Digits (China) is a digital technology company, dedicated to providing digital, online and offline all-scenario services around three key points – data, user and connectivity, using emerging technologies such as big data, AI, cloud computing, blockchain and IoT.
4. GoJek (Indonesia) is a multi-services platform with more than 20 services including Gopay, Gobills, Gopoints, Paylater, and Gopulsa serving millions of users in Southeast Asia.
5. One97 Communications (India) is the largest digital payments company in India with more than 380 million registered users and 12 million merchants on-board its Paytm platform.
6. Du Xiaoman Financial (China) provides short-term loan and investment services.
7. Compass (US) is a real estate technology company with a powerful end-to-end platform that supports the entire buying and selling workflow.
8. Ola (India) off the back of its ridesharing userbase Ola Money is making payments easier and simpler.
9. Opendoor (US) makes it possible to receive an offer on a home in just a few clicks, and sell in a matter of days, removing the headaches, uncertainties, and risks from the transaction.
10. Oaknorth (UK) specialises in small-and-medium-enterprise lending using its proprietary data and technology platform.
Heap and Pollari see several key trends that are aiding Australian fintechs.
Flow of capital
The Fintech100 companies on the 2019 list raised more than US$18 billion in the last 12 months with 32 raising at least US$100 million over that period. The average by the top 10 was more than US$1.25bn. The significant venture investors included Sequoia Capital and SoftBank, together with strategic investors such as Alphabet (Google’s Holding Company), BBVA and Tencent Holdings.
South East Asia is a hot spot
More Asia Pacific-based companies feature on the 2019 Fintech100 than from any other region.
Of the 11 companies raising more than $1bn in the past three years, eight are from the Asia Pacific serving customers in China, India and rapidly emerging markets such as Indonesia, Vietnam and Thailand. The pair say the smart money is rapidly flowing to fintechs focused on this region.
An increasing number of fintechs are rapidly globalising across multiple jurisdictions, with examples including Australia’s AfterPay Touch.
Monoline to mainstream
Early fintech innovators with monoline product propositions are now diversifying to fulfil a greater set of mainstream customer needs. Australia’s favourable regulatory developments, such as the Restricted ADI License, are facilitating greater levels of competition and customer choice.
Almost every company on this year’s list is a beneficiary of a global policy shift to putting customers in control of their data, including Australia’s Open Banking and Customer Data Right legislation, which is driving competition and allowing fintechs to access customer banking data to create faster, more personalised and innovative services.
The Fintech 100 was chosen based on five factors: total capital raised, rate of capital raising, geographic diversity, sectorial diversity and X-factor – a subjective assessment degree of product, service and business model innovation used to pick the 50 Emerging Stars list.