How Fintechs became the leading startup segment in the world.
In a Google Launchpad Accelerator program in San Francisco, which brought together 31 startups from various countries in Latin America and Asia, one point stood out: more than half of the companies there could be identified as belonging to the fintech sector, such as the Brazilian companies Quinto Andar and Mobilis, reports Felipe Moreno, editor-in-chief of StartSe; "fintechs are the main startup segment in several countries around the world – especially those with lagging financial markets, as is the case in many countries in Latin America and Asia," he says.
By Felipe Moreno, in StartSe I recently participated in an accelerator program in San Francisco, the Google Launchpad Acceleratorwhich brought together 31 startups from various countries in Latin America and Asia. One point caught my attention: more than half of the companies there could be considered fintech, such as the Brazilian companies Quinto Andar and Mobilis.
Talking to startups and mentors, one thing stuck in my mind: fintechs are the leading startup segment in many countries around the world – especially those with lagging financial markets, as is the case in many countries in Latin America and Asia. "Fintechs are big everywhere in the world," explained Roy Glasberg, head of the Google Launchpad Accelerator.
Fintechs are the startups that, today, solve CONCRETE problems for people. This is the case with Quinto Andar, which was there, and which effectively solves a financial problem for many people: the surety bond or guarantor when renting a property. Only those who have rented a property know how annoying this can be and even a reason to make the rental unfeasible.
Not surprisingly, two Brazilian fintech startups were chosen among the... 10 most innovative institutions in Latin AmericaCreditas and Contabilizei, along with many others like Warren, Nubank, Guia Bolso, and Viva Real, are always mentioned as some of the most relevant startups in the Brazilian market. No sector attracts as much attention as fintechs, although... other sectors like EdTech are just as promising..
But how did it all begin?
The emergence of the powerful fintech sector can be explained by a major hangover: the hangover from the 2008 crisis. To avoid a new crisis, the public sector in developed countries imposed a series of regulations on large banks – especially those considered "Too Big to Fail." As a consequence, these banks became too inflexible in many sectors, such as bank lending – where some fintechs are concentrated.
Startups, which are much more flexible, have emerged to fill these gaps – and many of them are using the brains of people who left the big banks because they had become less attractive places to work. The increase in competition has been so great that Goldman Sachs expects fintechs to take $4,7 trillion in revenue from the big banks in the coming years.
Meanwhile, in developing markets, technology has emerged as a way to solve classic people's problems. If Brazilian (outdated?) legislation requires a guarantor for renting a property, startups like Quinto Andar emerge and solve the problem. If credit card interest rates and annual fees are too high, Nubank appears.
There was no shortage of opportunities around here.
How can this be strengthened?
And there will be no shortage of new opportunities in the future. Brazil is still lagging behind in a number of financial matters, especially regarding investments or digital payment methods. After all, in China, people can pay most of their bills through the messaging app WeChat (their equivalent of WhatsApp).
It is by understanding this sea of opportunities that the giant credit card company... Visa launched Track.This is a program in partnership with GSVLabs to accelerate fintech startups in Brazil and Silicon Valley (where GSVLabs is located). It's a great opportunity for you to grow your fintech startup. Don't miss out!