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17 fintech businesses that could one day be worth over $1 billion

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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 — Online mortgage platform

LendInvest — Online mortgage platform

Ian Thomas, left, and Christian Faes, the cofounders of LendInvest.LendInvest

Founded: 2013.

Based: London, UK.

Employees: 100+.

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 £980 million to date, funding over 3,000 properties, and plans to get into the buy-to-let market.

Prodigy Finance — Peer-to-peer university loans for overseas students

Prodigy Finance — Peer-to-peer university loans for overseas students

Cameron Stevens, CEO Prodigy Finance.Prodigy Finance

Founded: 2006.

Based: London, UK.

Employees: 50-100.

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

ID Finance — Online lending in Russia

ID Finance founders Alexander Dunaev (left) and Boris Batin (right).ID Finance

Founded: 2012.

Based: Barcelona, Spain.

Employees: 380.

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.”

Ebury — Financing for small businesses trading overseas

Ebury — Financing for small businesses trading overseas

Juan Lobato, founder and CEO of Ebury.Ebury

Founded: 2009.

Based: London, UK.

Employees: 300.

What it does: Digital financing for SMEs, with a particular focus on funding for businesses involved in cross-border trade.

Funding raised: £90 million.

Why it’s exciting: GP Bullhound says Ebury’s platform is “highly scalable” and says the business has a “loyal customer base displaying high levels of repeat revenue.” It adds that Ebury was valued at over $500 million in its last funding round.

iZettle — Mobile phone linked card readers

iZettle — Mobile phone linked card readers

iZettle

Founded: 2010.

Based: Stockholm, Sweden.

Employees: 450.

What it does: Makes portable card readers that link to smartphones for small businesses and sole traders. It has recently also pushed into lending, based on transaction data from the terminals.

Funding raised: £146 million.

Why it’s exciting: GP Bullhound says the company has “successfully built a broad user base in mature and high-growth markets,” and says the push into new businesses like lending are promising for growth. The company is reportedly already worth around $500 million.

WorldRemit — International money transfer on your smartphone

WorldRemit — International money transfer on your smartphone

WorldRemit

Founded: 2010.

Based: London, UK.

Employees: 330.

What it does: Remittance — lets people send money to family and friends overseas via their mobile.

Funding raised: £150 million+.

Why it’s exciting: Remittances is a $600 billion-a-year market and WorldRemit’s digital focus gives it a pricing edge against legacy players like Western Union, which has an expensive branch network.

Source: Business Insider, Apr. 20, 2017

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