What makes a fintech unicorn?

It’s not every day you hear about a unicorn prancing about in your neck of the woods. This week in Australia, a new one horned beast was spotted, with B2B cross border payments startup Airwallex crowned (or should I say horned) with the enviable title of  fastest ever unicorn status downunder.

There are now 326 Unicorns in the world, according to CB insights, or I guess 327 now, given Airwallex’s announcement.

Fintech Unicorns are rarer than some others, occupying 4th place by category:

Category Count
Internet Software Services 82
Other 45
e-commerce 44
Fintech 32
Healthcare 30
On Demand 23
hardware 14
Social 11
Data Analytics 11
Auto Tech 11
Media 8
Travel Tech 7
Cybersecurity 7
dataanalytics 1

The US dominates as the home country for Unicorns, followed by China, the UK and India, and then a very long tail.

Country Count
United States 156
China 91
United Kingdom 17
India 13
Germany 8
South Korea 6
Indonesia 4
France 3
Hong Kong 3
Israel 3
Switzerland 3
Brazil 2
Colombia 2
South Africa 2
Australia 1
Canada 1
Estonia 1
Japan 1
Luxembourg 1
Malta 1
Nigeria 1
Philippines 1
Portugal 1
Singapore 1
Spain 1
Sweden 1
United Arab Emirates 1

You’re most likely to be a Unicorn if your cap table contains SoftBank Group, Tencent Holdings, Sequoia Capital China and Tiger Global Management. I cut funds with 1 or 2 Unicorns from the list.

Funder Count
SoftBank Group 29
Tencent Holdings 29
Sequoia Capital China 21
 Tiger Global Management 20
 Fidelity Investments 19
 Andreessen Horowitz 18
 DST Global 18
 Goldman Sachs 16
 Kleiner Perkins Caufield & Byers 16
 Sequoia Capital 16
 Institutional Venture Partners 15
Tiger Global Management 15
 GGV Capital 14
 Google Ventures 14
 Temasek Holdings 14
Sequoia Capital 14
 Hillhouse Capital Management 13
 Index Ventures 13
 Baillie Gifford & Co. 12
 Kohlberg Kravis Roberts & Co. 12
 Sequoia Capital China 12
 Tencent Holdings 12
 Wellington Management 12
GIC 12
Goldman Sachs 12
 Accel 11
 Coatue Management 11
 Founders Fund 11
 ICONIQ Capital 11
 Khosla Ventures 11
 T. Rowe Price 11
Accel 11
 capitalG 10
 General Atlantic 10
Alibaba Group 10
 New Enterprise Associates 9
 Qiming Venture Partners 9
 Alibaba Group 8
 Bessemer Venture Partners 8
 J.P. Morgan Chase & Co. 8
 Shunwei Capital Partners 8
 Spark Capital 8
 Y Combinator 8
Andreessen Horowitz 8
General Atlantic 8
New Enterprise Associates 8
 Battery Ventures 7
 General Catalyst 7
 IDG Capital 7
 Insight Venture Partners 7
 Morningside Venture Capital 7
IDG Capital 7
 Ant Financial Services Group 6
 CMC Capital Partners 6
 Data Collective 6
 Matrix Partners China 6
 Sequoia Capital India 6
 Yunfeng Capital 6
Qiming Venture Partners 6
Warburg Pincus 6
 CDH Investments 5
 Greylock Partners 5
 Lightspeed Venture Partners 5
 Redpoint Ventures 5
 Ribbit Capital 5
 Silver Lake Partners 5
 Thrive Capital 5
 Warburg Pincus 5
Baillie Gifford & Co. 5
T. Rowe Price 5
Temasek Holdings 5
 Daimler 4
 DCM Ventures 4
 Greenoaks Capital Management 4
 JD.com 4
 JOY Capital 4
 Legend Capital 4
 Polaris Partners 4
 Primavera Capital Group 4
 Qualcomm Ventures 4
 SIG Asia Investments 4
 SoftBank Group 4
 Source Code Capital 4
 TPG Growth 4
 Venrock 4
 ZhenFund 4
Founders Fund 4
Lightspeed Venture Partners 4
 Altos Ventures 3
 Benchmark 3
 BlackRock 3
 Capital Today 3
 CCB International 3
 China International Capital Corporation 3
 China Renaissance 3
 DFJ 3
 EDBI 3
 FirstMark Capital 3
 Foundry Group 3
 Foxconn Technology Company 3
 Gaorong Capital 3
 Genesis Capital 3
 GIC 3
 H Capital 3
 Intel Capital 3
 K2VC 3
 Matrix Partners 3
 Ping An Insurance 3
 Revolution 3
 RRE Ventures 3
 Shenzhen Capital Group 3
 Silicon Valley Bank 3
 True Ventures 3
 Valor Equity Partners 3
Access Industries 3
GGV Capital 3
HSBC 3
Insight Venture Partners 3
J.P. Morgan Chase & Co. 3
Kleiner Perkins Caufield & Byers 3
Silver Lake Partners 3

But if you’re chasing Fintech Unicorn Status, while Tencent and Sequoia Capital China are still a good name for the cap table, landing money from Accel, General Atlantic, ICONIQ Capital and Kleiner Perkins are the names to look for, compared to the general VC population.

Name Count
Sequoia Capital China 5
Tencent Holdings 4
 Accel 3
 General Atlantic 3
 ICONIQ Capital 3
 Kleiner Perkins Caufield & Byers 3

There is over $1 Trillion worth of value that’s been created in the birth of these Unicorns, for founders and shareholders. It would be fascinating to calculate what value has been delivered per dollar invested/created in productivity gains or cost savings for the community of users they serve.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.

The 5 Banking commandments for your own Bezos moment

Dear Banks,

It only takes an internal memo to ignite your own Bezos moment.

Five clear and crystal commandments[1] (“good artists borrow, great artists steal”) that you can steal from Jeff B.:

  1. All teams will henceforth expose their data and functionality through service interfaces.
  2. Teams must communicate with each other through these interfaces.
  3. There will be no other form of inter-process communication allowed: no direct linking, no direct reads of another team’s data store, no shared-memory model, no back-doors whatsoever. The only communication allowed is via service interface calls over the network.
  4. It doesn’t matter what technology they use. –(tech neutral)
  5. All service interfaces, without exception, must be designed from the ground up to be externalizable. That is to say, the team must plan and design to be able to expose the interface to developers in the outside world. No exceptions.

Bezos ended his 2002 now famous mandate with a chilling little twist:

  • “Anyone who doesn’t do this will be fired.  Thank you; have a nice day!”

Just 17 years later, you can feel free – I would say you should feel inclined to do so – and steal this. You can end your internal memo with a kinder twist:

“Anyone who doesn’t do this will no longer be with the team.  Thank you; have a nice day!”

2019 in Finsev

I am using `Banking` to refer to financial institutions that have traditionally been in the business of serving retail, institutional, and corporate clients across all the spectrum of their needs. The Banking business model has been a PUSH operating model and the opaqueness and regulatory barriers to entry have allowed them to morph into a predominantly product business.

I am celebrating this month 4 yrs with Daily Fintech, during which I have been writing every single week on global innovations in Capital markets, wealth and Asset management[2].

I can safely say by now, that the only sustainable banking model is a PULL operating model that at its core becomes a platform as a service business. Much like Bezos transformed Amazon from a digital bookseller business, into a platform as a service.

For this to happen, the core transformation needed is in the `middle office` (conventional parlance) via APIs. Unless banks realize this, they will become suicidal and victims of a `lemming effect`. Their herd behavior to keep up with digitizing the `front office` to improve their customers` experience and even their engagement; will prove futile. The reason being, that as long as the culture remains that of selling products eventually; banks will find themselves in a commoditized business with margin going to zero.

`Any bank that does not transform its `middle office` via APIs; will become extinct. Thank you; have a nice day!”

 The good news about this transformation is that it has lots of possibilities and variations. But a bank has to start its platformification process, first internally.

Think first Private APIs that enable each and every department to access data and workflows in real time. Then, one can think of Public APIs, Partner APIs, and the Open Banking obligation or opportunity. Banking transformation needs to look more like 2/3 internal APIs in the first phase.

APIpicture 

Caravaggio_-_The_Incredulity_of_Saint_Thomas

Chris Skinner and Jim Marous, have been preaching relentlessly about these issues. But it seems that it is difficult to convince `Doubting Thomas`[3]. There is no reliable data (to my knowledge) on this topic that is essential, despite the fact that it may seem a `detail`. The devil always hides in the details.

 

Over the past 3yrs, I have been monitoring the Financial APIs from the Programmable Web and there is clearly an increase. From 2016 to date, we have gone from 1700+ to 3800+ financial APIs. Of course, there is no quality differentiation or usage stats with this doubling. And none of these stats, are related to the paramount internal transformation measured by Private or Internal APIs, and their usage.

The one piece of evidence that I can share with you, is from Goldman Sachs. Marquee[4], is the GS sophisticated freemium platform for its institutional clients, which I have used as a great example of `Empowering Asset Owners and the Buy Side` WealthTech Book, 2018 Wiley.

Adam Korn, who has spearheaded the project of giving out Marquee for free, reported late last year that:

` After months of work, Marquee now fields more than 100 million API calls each month, about 5 million of which come from outside Goldman’s four walls. Marquee now has roughly 12,000 monthly active users, split evenly between internal and external clients. And the number of users is beginning to increase, according to Korn.`

[1] The API Manifesto Success Story

https://www.profocustechnology.com/enterprise/api-manifesto-success-story/

[2] https://dailyfintech.com/author/efipylarinou/

[3]doubting Thomas is a skeptic who refuses to believe without direct personal experience—a reference to the Apostle Thomas, who refused to believe that the resurrected Jesus had appeared to the ten other apostles, until he could see and feel the wounds received by Jesus on the cross. https://en.wikipedia.org/wiki/Doubting_Thomas

[4] Named in honor of CIO R. Martin Chavez, known by everyone as “Marty”.

Book one hour with Efi – Ask me anything (AMA) for 0.10BTC – Efi@dailyfintech.com

Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer.

 I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.

Subscribe by email to join the 25,000 other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).

How the UK could become the early stage Fintech capital of the world post Brexit thanks to Securities Tokens

brexit

This week is Brexit week. Personal disclosure: I think Remain was the right option. However, as a business person I know that you have to work with whatever actually happens, rather than what you hope will happen and that you look for opportunities in problems that the world delivers to you.

At Daily Fintech we look at world events through the narrow lens of “is it good or bad for Fintech?”

So, here amidst the doom & gloom, is my optimistic case for Fintech post Brexit.

I specifically wrote early stage Fintech capital of the world. The tremendous tax incentives in the UK for investing in startups via Seed Enterprise Investment Scheme (SEIS), is a big driver for early stage. Other places may have bigger pools of capital for doing later stage deals (Silicon Valley is dominant there) but in few places are the incentives as good for early stage – and ventures have to go through early stage to get to late stage (said Captain Obvious).

SEIS offers unparalleled incentives for high income people to invest in startups. Even if a venture fails they get a lot of tax back immediately. On exit, they get zero capital gains tax, after 3 years minimum holding.

SEIS has been around a while. So has Fintech. What is new is the emergence of legal Securities Tokens. Look at these from the perspective of that early stage investor. The investment is priced by the market and can be traded (if Securities Token exchanges get their act together with some reasonable liquidity/spreads). Perhaps more important is it becomes harder for big Funds to come in at the next round on terms that disadvantage you as an early investor (not impossible, just harder).

For the entrepreneur/capital raiser, the fact that SEIS offers zero capital gains tax after 3 years minimum holding puts a de facto lock-up into the terms (because any investor selling before 3 years loses this tax advantage).

If the UK is the place where investors can go from angel/seed to exit within 3 years, the UK is where the best entrepreneurs will want to be – and where the best entrepreneurs want to be will be where jobs and prosperity is created.

What about access to Europe? Entrepreneurs can choose jurisdictional locations and strategies that give access to investors in different locations around the world. Many ventures today are decentralised with people in multiple locations. Consider Ethereum as an example (with developers and other employees all over the world. Talent can choose where they want to live; entrepreneurs and investors follow talent.

What about all those Banks relocating out of London due to Brexit? For those losing jobs and those who depend on them, it is 100% bad news. For Fintechs looking for talent and users it is good news.  Many of the jobs will be automated anyway and an HR policy of “relocate due to Brexit” simply avoids having to fire people due to automation.

So, London could become the early stage Fintech capital of the world post Brexit thanks to Securities Tokens.  There are lots of policy, regulatory, legal and technical issues to make this happen, but nothing that is rocket science. 

The real issue is London as a diverse, fun talent magnet. The passporting/regulatory issues are far more manageable. If Brexit means entrepreneurs cannot recruit talent from around the world regardless of country of origin, religion, colour, sexual orientation, then all bets are off.

The solution is simple. Every startup given SEIS status should have the right to offer work/residency permits to whoever they want, from anywhere, no questions asked.

It is a real opportunity, but we should never underestimate the ability of politicians to snatch defeat from the jaws of victory. 

What are you seeing? How will this play out? Please go to this thread on Fintech Genome to comment.

Image Source.

Bernard Lunn is a Fintech deal-maker, investor, entrepreneur and advisor. He is CEO of Daily Fintech and author of The Blockchain Economy.

I have no positions or commercial relationships with the companies or people mentioned. I am not receiving compensation for this post.

Subscribe by email to join the 25,000 other Fintech leaders who read our research daily to stay ahead of the curve. Check out our advisory services (how we pay for this free original research).

Podcast with Urs Bolt after Davos, WEF2019

Urs Bolt comes also from the `O​ld Guard` of the finance world and joined the independent fintech movement in late 2017. He has already become a Fintech influencer and builds bridges between Switzerland and China, with his own unique skill set.

We spent three days together in Davos during the WEF and in this podcast, he shares some of his takeaways from the different events he participated in and of course, his insights on the ongoing Techfin transformation in China.

He speaks about Ant Financial, financial education in China, the financial surveillance challenge and much more. Enjoy.

We closed our discussion with a highlight of an upcoming unconference in Davos that is an annual tradition for both myself and Urs. Last year, I did a one hour talk (mostly standup comedy, see here) and Urs participated in the Talk battles.

Check out and join us this year at CryptomountainRocks10 – 12 March 2019. in Davos

20190122_114642.jpg


Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer.

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.

Cheering women Fintech entrepreneurs

women entreprenurs

Happy New Year!

I am starting with a collage post that is a reminder of the importance of diversity and inclusiveness of women in tech and Fintech.

Lets all take note and applaud the 30 women in the Fintech playlists that I compiled in the 1st quarter of 2018.

The women’s market and Fintech – Jan playlist of 10.

Women and Fintech – Feb playlist of 10.

WE for women entrepreneurs in ETFs in the New Economy.

Lets give another round of applause to more women entrepreneurs:

Women investing in the underbanked despite being underfunded

Brazil’s Moeda- the cooperative network for women entrepreneurs on crypto

And last but not least, to our very own Jessica Ellerm, cofounder of Zuper

Image Source

Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer.

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.

Fintech Postcard from Athens – Philosophising on Mental Money Models

Visiting the Oracle at Delphi

It may be one of the few western countries where cash still rules, however things are slowly changing in Greece, the birthplace of western civilisation.

This week I’m writing to you from Athens, having flown 15,317 km from Sydney, Australia to run a gruelling 42.195 km in The Authentic Athens Marathon, this Sunday past. Bizarre, I know, but lots of fun.

It only seemed right then to learn a little about the changes and digital transformation happening in Greece, and try and capture a fleeting snapshot of how the local community is attempting to rouse its innovative spirit, and drive out the economic demons of its recent past. It won’t be easy – the socialised cost of the global financial crisis is still very evident in Greece – from anarchy in Exarcheia to a melting pot of cultures, communities and refugees across the city. In many ways, these are all the ingredients you need for a hotbed of innovation. So what is the firestarter?

In September Efi Pylarinou looked at the necessity for policy reform on the regulatory front to foster the emergence of more fintech activity. In a similar vein, a 2017 report, The Impact Of Digital Transformation In The Financial Services Industry: Insights From An Open Innovation Initiative In Fintech In Greece, from researchers at two Greek universities confirmed this, bluntly stating that ‘the Greek regulation and taxation system prevents the rapid growth of fintech in our country.’

It should be noted however that the government has had some success with regulatory reform to date on the payments front, successfully mandating the implementation of card machines on around 400,000 businesses across the country. The law came into force in full in July 2018, and a consequent rise in VAT revenues was reported. I must selfishly admit its now far easier spending money as a tourist than it was ten years ago, so that has to be somewhat of a good thing.

While a move to cards is a step in the right direction, given fintech is so new in Greece it does seem like a golden opportunity to bypass the plastic money revolution of decades gone and leapfrog to the new world of digital money, as China and emerging economies in Africa and South East Asia have proven to be so successful at, putting the rest of us in the west to shame.

Or maybe there is a chance to leapfrog them again?

Today marks the kick off of Decentralised, a blockchain conference run by the University of Nicosia – the first academic institution in the world to offer a postgraduate degree in digital currency. Efi from Daily Fintech will be speaking on Friday in the morning fintech stream, and she has some fabulous insights and ideas on how blockchain can be unlocked at an infrastructure level to achieve exactly that sort of leapfrog moment.

And as I spend time wandering the Acropolis, the streets of Plaka and the ruins of the magical Delphi, I can’t help but wonder how the innovative philosophical inquiry baked into the bones of this magical country can be reawakened and applied to our creaking monetary systems. So much of fintech today is a boring but slightly better way of doing what our banks already do. We are on the cusp of revolutionising what money really is, and blockchain has in many ways given us the tools to start that revolution. But we still lack coherent mental money models to use the tools wisely.

You never know, maybe out of the ashes of economic despair can come the intellectual seeds of a new money philosophy, from a new breed of Greek philosophers. Maybe in 1000 years we’ll call Greece not just the birth of western civilisation, but the birth of the new money. If anyone can change the way the world thinks, my bet is on the Greeks.

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.

The Internet of Finance from the East & the 50mil unbanked in Brazil

chinaltam

Much has been written about China’s growing commercial relationships with Latin America. Some have suggested that China is replacing the United States as the region’s most important partner. The focus has been mostly on Chinese infrastructure investments in Latam.

This October one of the Internet of Finance leaders, Tencent invested $180 million in the Brazilian neobank ‘NuBank[1] the largest Latin American digital bank and credit card operator. Nubank, is a 5 yr old Latam FinTech pioneer, who has raised a total of $330 million since it was founded in 2013 by Sequoia Capital ex-partner David Vélez. Clearly, one of the best-funded start-ups in Brazil. To date, it has issued 5 million no-fee credit cards and has opened 2.5 million digital payment accounts.

Nubank’s impressive expansion has spurred growth in the Brazilian Fintech market, with 188 ventures being launched in the past 18 months. This includes standalone Neobanks such as Banco Original, SDBank, LabsBank, beBank. Incumbents have also joined the competition with Digio being one example, launched by Banco do Brasil and Bradesco in 2016 to compete directly with Nubank’s fee-free business model. These strong recent developments have earned Brazil the title of leading FinTech ecosystem in Latin America. [2]

Nubank has streamlined the onboarding process and is offering fast, transparent consumer banking mobile services to make transfers, pay bills and earn interest on deposits. Just recently Nubank got clearance from Brazilian Central Bank to offer loans to its customers which will allow the already well-funded start-up to expand further.

Nubank is the high-growth Latam Fintech that has managed to attract major international attention and investment. The recent Tencent investment is increasing Nubank’s capital by $90 million and repurchasing the equivalent amount from Nubank’s existing shareholders, pushing the neobank’s valuation up to $4 Billion. Tencent President Martin Lau explained that the investment will help Nubank “build a full-service personal finance platform.”[3] The Chinese conglomerate is no stranger to these transactions, with major shareholdings in other FinTechs and Neobanks such as the online bank WeBank, fintech business Voyager of Philippine telco PLDT, online insurer ZhongAn Online P&C Insurance Co Lt, supply chain financing provider Linklogis.

According to Nubank CEO David Velez, the investment is for Nubank a great strategic standpoint to gain insight on- and learn from the Chinese financial market. For Tencent, this is a means of expansion of their existing portfolio of challenger banks and technology-based financial services ventures as well as a robust point of entry to the booming Brazilian FinTech Market.

The Internet of Finance from the East in synergy with the 50mil unbanked in Brazil.

This not Chimerica, the term coined by Niall Ferguson to describe the symbiotic relationship between China and America more than 10 yrs ago.

chimerica

This could be “Chilatam” led by Brazil who has put forward new Fintech regulations to encourage competition in their financial sector that is dominated by the Big 5 banks, much like in the UK or Australia.

#AndtheIronyIs that Chimerica, the award-winning play of Lucy Kirkwood, became 4 part TV series –  “Chimerica”. The play examines contemporary global politics and the relationship between East and West.

#AndtheIronyIs is my Twitter hashtag for cynical Finance tweets.

[1] Reuters, 2018, ‘China’s Tencent invests $180 million in Brazil fintech Nubank’

[2] Finnovista, 2018, ‘Brazil recovers the leading position as largest Fintech ecosystem in Latin America with over 370 Fintech startups

[3] Reuters, 2018, ‘China’s Tencent invests $180 million in Brazil fintech Nubank’ 

Efi Pylarinou is the founder of Efi Pylarinou Advisory and a Fintech/Blockchain influencer.

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.

 

A Thinktank Fintech initiative out of Greece

“Necessity is the mother of invention” is an English proverb that is not at all outdated. Small countries are developing regulatory frameworks to embrace and take advantage of the so-called “future technologies” because it will enable them to play vital roles in the 4th and 5th industrial revolution. As tech accelerates, it is expected that one generation may actually live through two major revolutions.

Smaller countries, policy-making organizations and think tanks are actively building the next layer to welcome the socio-economic changes that are inevitable.

A Greek think tank, To Diktio, was founded in 2013 with a European focus. To Diktio (the network in the Greek) is a member of the Foundation of Progressive Studies based in Brussels and focused on proposing reforms in Greece and Europe. I would like to thank the President of To Diktio, Anna Diamantopoulou[1] for reaching out to me. We can only grow through collaboration – see partnerships of ToDiktio, here.

To Diktio hosted yesterday a Fintech focused event for its members during which a very thorough Fintech report was presented by Dr. Kourouthanassis, of the Ionian University and Dr. Doukidis, of the University of Athens; and several policy reforms were suggested. I had the honor and pleasure to review the report (in Greek) and also participate virtually in the event to share some of my insights on Fintech global trends and the first necessary steps for Greece to dive into the Fintech opportunity which is much broader than simply reforming banking services (see video here – in Greek only).

The 40-page report offered a thorough overview of Fintech subsectors and also of the policies that have enabled countries to become Fintech hubs.

Naturally, mentioning first the FCA as an early pioneer in the Fintech. Highlighting that the first European Union country that developed a regulatory framework for “specialized banks”, was Lithuania.

The UK and Japan, are the leaders in establishing frameworks to facilitate the Open Banking movement.

Regulatory sandboxes exist in the UK since 2016 and only this summer the Central Bank of Spain announced a Fintech sandbox to be launched.

In Europe, only the UK launched Project Innovate last year to facilitate the dialog between Fintechs and regulators to innovate in the interest of consumers. Only in Australia, there is a comparable setup of the Capital markets authorities who setup as early as 2015, an Innovation Hub program to encourage the cooperation of regulators and innovators.

Fintech pulse

Screen Shot 2018-09-17 at 9.15.36 AM

 

Based on the Greek Fintech report, already in 2018, the median size of M&A fintech deals in Europe has nearly tripled from last year.

 

 

Screen Shot 2018-09-17 at 9.15.42 AM

Challenger banks, a European specialty, are the ones that have absorbed large Fintech investments; Revolut, Atom Bank, and N26.

 

 

Revolut has already opened offices in Greece, this past Spring. The penetration in the Greek market is remarkable. By the end of 2017, Revolut had acquired 55,000 customers in Greece, making Greece the 4th largest country/client for Revolut after the UK, France, and Lithuania. Revolut is planning to triple the customer base in Greece.

The first homegrown Greek challenger bank is PraxiaBank. The two also homegrown e-money companies are Viva Wallet and Tora Wallet. Viva is already well established with 60k retails clients and 280k business clients and 30mil euros of transactions only for 2018.

As expected several payment Fintechs have presence and business in Greece. Payments are the most mature but thin margin Fintech subsector. From the 375+ payment businesses with EU passporting, ten have reps in Greece and 9 have licenses to operate in Greece. From the 170+ e-payment Fintechs with EU passporting, 3 have a presence in Greece.

The largest Greek telco, OTE, has a new subsidiary Cosmote payments with a plain vanilla topup card. But what is more interesting is to watch what OTE does with their dormant insurance license and their newly acquired full banking license.

Opportunity via Fintech

The low hanging Fintech opportunity in Greece lies in alternative funding for SMEs. Greece is one of the few EU countries that lacks a crowdfunding and P2P lending framework.

The Greek government needs to launch a Digital ID platform borrowing design elements and tech from Estonia and India. Combining this with a basic regulatory reform for alternative lending, would be a short and long-term strategic move. In a traumatized economy that is recovering from foreign investments in real estate, Digital identities and access to alternative funding would make magic.

[1] Anna Diamantopoulou, has served in the Greek parliament for 11yrs and as European Commissioner for Employment, Social Affairs and Equal Opportunities (1999-2004). She has served as Minister of Education, Lifelong Learning and Religious Affairs and as the Minister of Development, Competitiveness and Shipping. She active in several European think tanks.

Efi Pylarinou is a Fintech thought-leader, consultant and investor. 

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.