The 2018 Fintech100 was recently announced, highlighting dynamic fintechs from around the world that are transforming the financial services industry, from digital payments and lending, to insurtech, to neo-banking, as they attract investment at a record pace.

The 2018 Fintech100 is the fifth edition of the annual report, a collaboration between fintech investment firm H2 Ventures and KPMG Fintech. The Fintech 100 includes the ‘Leading 50’ fintech firms around the globe, ranked based on innovation, capital raising activity, size and reach; and the ‘Emerging 50’, exciting new fintechs that are at the forefront of innovative technologies and practices and are often pursuing new business models.

Key highlights from the 2018 Fintech100 include:

• Chinese fintechs continue to dominate the top of the list, accounting for three of the top five places on the Leading 50 list with Ant Financial in first, JD Finance second and Baidu fourth; Singapore’s Grab was a new entry, taking third place, and US fintech Sofi moved up to fifth place.
  
• Global competition continues to expand, with 36 different countries represented in the full Fintech100, up from 29 in 2017 and 22 countries in 2016. Almost half of the companies on this year’s list (41) were founded and continue to operate in emerging markets.
  
• The US tops the Fintech100 with 18 fintechs placed, including three of the top 10, followed by the UK with 12 and China with 11. Australia and Singapore place strongly with 7 and 6 fintechs respectively.
  
• Payments companies dominate the Fintech100, with 34 in total, followed by 22 in lending, 14 in wealth management and 12 in insurance. “Multi’s” (fintechs offering a broad range of financial services to customers) dominated the top of the list, led by Ant Financial.
  
• Digital or “neo banks” also increased their representation to 10 with Monzo, Number26, SolarisBank and Starling Bank making their Leading 50 debut.
  

Ian Pollari, Global Co-Lead of KPMG Fintech, commented: "The 2018 Fintech100 showcases the increasing diversity and scale of the global fintech market. Payments and lending continue to be the dominant sectors, however wealth management is taking off, with 14 companies on the list and insurtech remains strong with 12 companies. Notable this year is the emergence of neo banks, with 10 on the list – which is the beginning of what we believe will be accelerated growth of digital banking models globally. "

Ben Heap, Founding Partner at H2 Ventures, said: "Venture capital backing of fintech companies continues to accelerate. The companies on the 2018 list have raised over US$52B in venture capital, more than double the total of last year’s list, and more than US$27B of capital in the past 12 months, a 366 percent increase over last year. In terms of major funding rounds, 26 companies on the Fintech100 have each raised US$100M in the last twelve months. The first four companies in the Leading 50 have all raised over US$1B in the last 12 months alone.

"Konstantin Aushev, Head of IT Advisory, KPMG in Kazakhstan and Central Asia, commented: "It is safe to say that the fifth annual Fintech100 came as no surprise – Chinese fintechs have been dominating in the amount of investment again, while the players that are most promising and interesting for investors have been operating in the market of payments and lending. The fact that 10 neo-banks were for the first time ever included in Fintech100 does not mean that this a brand new fintech type. The banks in existence both in Kazakhstan and worldwide tried various mobile banking models using no offices before. However, the fact that they begin evolving more often and attract huge investments is kind of a signal for the market and for the regulators in the first place as, in the rough situation on the financial markets, they will have to choose between strengthening regulation in order to protect the consumer from risks and deregulating the market in order to improve the consumer experience. The latter scenario is unlikely to be chosen in Kazakhstan in the near future. However, even if the second scenario is put into practice, each and every client will not totally switch to neo-banks – they would rather hold their money in more customary instruments."

The top 10 companies in 2018 Fintech100

1. Ant Financial (China)
2. JD Finance (China)
3. Grab (Singapore)
4. Baidu (Du Xiaoman Financial) (China)
5. Sofi (US)
6. Oscar Health (US)
7. Nubank (Brazil)
8. Robinhood (US)
9. Atom Bank (UK)
10. Lufax (China)

Selecting the Fintech100

The Fintech100 were selected following extensive global research and analysis based on data relating to five factors. Two criteria are related to capital raising reflecting the emphasis that venture capitalist investors place on the ability of firms to innovate in order to generate a long term sustainable competitive advantage.

1. Total capital raised
2. Rate of capital raising
3. Geographic diversity
4. Sector diversity
5. X-factor: degree of product, service and business model innovation (a subjective measure that is applied only with respect to companies appearing on the 50 Emerging Stars list).

View the full Fintech100 list here.

About KPMG Fintech

The Financial Services industry is transforming with the emergence of innovative new products, channels and business models. This wave of change is driven by evolving customer expectations, digitalization, as well as continued regulatory and cost pressures. We are passionate about supporting clients to successfully navigate this transformation, mitigating the threats and capitalizing on the opportunities. KPMG Global Fintech comprises professionals in over 45 fintech hubs around the world, working closely with financial institutions and fintech companies, to help them understand the signals of change, identify the growth opportunities and to develop and execute on their strategic plans.