- This has been a turbulent year for fintechs.
- But a number of fintechs rode the waves of economic uncertainty to great success in 2020.
- Insider Intelligence publishes hundreds of insights, charts, and forecasts on the Fintech industry with the Fintech Briefing. You can learn more about subscribing here.
Fintechs faced various challenges caused by the coronavirus pandemic this year, including volatile markets and low investor confidence. However, some fintechs still managed to accelerate their growth. As 2020 comes to a close, Insider Intelligence has selected the most notable fintechs that made a meaningful impact on the global ecosystem, based on key metrics including funding figures, customer numbers, and product suites.
- Despite operational challenges, Robinhood shone this year and secured over $1 billion in funding—and a potential IPO is in sight. At the beginning of the year, the online trading platform suffered multiple outages, which led to customer queries and even regulatory investigations. However, the outages were caused by sky-high traffic on the platform, and in the first four months of the year alone it added 3 million new users. This has generated extensive investor interest: Robinhood secured $1.26 billion this year across two funding rounds. Moreover, the firm will reportedly go public as early as Q1 2021—and the IPO launch is poised to be a success, considering the recent customer and investor interest.
- Lemonade and Root have proven resilient throughout the pandemic, which was further highlighted by their successful IPOs. Both insurtechs went public in the past few months, with Lemonade raising $319 million and Root securing $724.4 million—marking successful debuts to the stock market. This success owes partly to growing revenues and decreasing loss ratios: Lemonade saw its total revenues grow nearly 240% year over year (YoY) in Q1 2020, while its loss ratio improved from 87% to 72%. Meanwhile, Root reduced its net loss this year and decreased its loss ratio from 96.4% in June 2019 to 81.3% in June 2020.
- Regtech Onfido saw massive demand that will persist beyond 2021. Due to enforced lockdowns worldwide, businesses have become reliant on digital channels for distribution, increasing the need for digital identity verification. As such, digital identification fintech Onfido had a breakout quarter for sales earlier this year, growing 40% YoY in Q2, 22% of which was driven by new customer demand. And the need for digital solutions that can detect fraud is expected to last beyond the crisis, meaning interest and demand for solutions like Onfido's will likely continue to grow in the coming years.
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