[Forbes] The Fintech 50
The past year has been brutal for some fintech startups, as valuations crashed, cash dwindled, layoffs mounted and fire sales and failures loomed. With stock prices for publicly traded fintechs off an average of 60% from their peak, private funding has plummeted too–in 2022, venture capitalists invested $75 billion globally in fintechs, down from $140 billion in 2021, according to CB Insights.
Yet many startups continued to thrive, making this year’s Fintech 50–our eighth annual list of the most innovative private fintech companies–extremely competitive once again. To select the winners, our team of reporters and editors evaluated hundreds of companies, analyzing everything from product originality and customer and revenue growth to leadership team diversity. We also interviewed both CEOs and industry insiders. To be considered, companies must have their headquarters or substantial operations in the U.S.
One area that stands out on this year’s list is fraud prevention, a subset of our Wall Street and Enterprise category on the list below. San Francisco-based SentiLink, a newcomer to the list, was founded six years ago by two now-31-year-old data scientists and uses both artificial intelligence and human review to detect fraud. In a crowded field, these young entrepreneurs broke through by tackling what was then a novel and underappreciated problem: synthetic identity fraud, where scammers combine stolen Social Security numbers with fictitious names and real addresses to create phony and deceptively creditworthy identities.
Two other standout categories also operate largely behind the scenes: business to business banking and payments. List newcomer Lead Bank, for example, moves money, issues loans and processes payments for other, more consumer-facing fintech and crypto startups. It was launched just last year by former Square Capital head Jackie Reses, who bought a Kansas City bank to get it started. A secondary sale in April valued Lead at $450 million. Meanwhile, digital bank Mercury, making its second appearance on our list, turned the recent regional banking crisis to its advantage; in the six days after the collapse of Silicon Valley Bank, Mercury added more than $2 billion in deposits and thousands of customers. Nine payments companies also made the Fintech 50 this year, compared with six last year.
Still, there’s no denying that in today’s environment the youngest fintech startups face tough going. That explains why our 2023 list has only 19 companies that have never made the Fintech 50 before, down from 25 newcomers last year.
Edited by Jeff Kauflin and Janet Novack Reported by Nina Bambysheva, Michael del Castillo, Steven Ehrlich, Jeff Kauflin, Emily Mason, Javier Paz, Jonathan Ponciano, Maria Gracia Santillana Linares and Hank Tucker