The US has consolidated its leadership in FinTech despite a challenging year, to stand head and shoulders above the UK and other big players, such as India and China.
The reason for the US’ increasing dominance is clear. According to market analysis firm CBInsights, multimillion-dollar FinTech startups can now be found in 43 US states – 86 percent of the country.
By contrast, much of the UK’s strength in this sector is centred in London, which is feeling the strain from a historically deep recession, not to mention continuing uncertainty over Brexit.
In 2019, booming FinTech startups could already be found in 35 US states – 70 percent of the country – showing that innovation is spreading in 2020, despite the economic challenges created by the coronavirus.
Last year, the number one startup in each of 35 US states had raised over $5 million in equity funding, and $9.5 billion overall, according to CBInsights.
This year, the firm has again mapped the most successful startups in each US state that hosts a growing FinTech company. Collectively, the 43 have raised nearly $12.6 billion.
In 2020, the most well-funded US FinTech startup is California’s SoFi, with $2.5 billion in disclosed equity investments. The San Francisco-based personal finance platform offers an array of financial products.
Next on the list is New York-based health insurance player Oscar Health, with $1.5 billion in disclosed equity funding.
But not everything is centred in obvious tech hotspot California or financial centre New York. North Carolina-based bill pay platform AvidXchange is next on the list, with $1.1 billion.
There are 10 unicorns among the 43 most successful companies by state. These are: Toast (Massachussetts, with a valuation of $4.9 billion valuation); SoFi ($4.8 billion); Root Insurance (Ohio, $3.7 billion); Bright Health (Minnesota, $3.4 billion); Oscar Health ($2.6 billion); AvidXchange ($2.4 billion); Clover Health (New Jersey, $2.2 billion); Avant (Illinois, $1.9 billion); Remitly (Washington, $1.5 billion); and C2FO (Kansas, $1.1 billion).
Nineteen of the 43 startups have each raised over $100 million in disclosed equity funding, including Utah-based expense management platform Divvy ($253 million) and Missouri-based PayIt ($133 million), which enables payments between citizens and government.
A further six startups have raised up to $10 million apiece. The leading startup by state with the least amount of funding is Montana-based AdvicePay, with $3 million.
- In each country that has a booming FinTech sector, canny innovators have benefited from changes in consumer and business behaviour during lockdown, such as a shift to online banking and ecommerce. Nonetheless, funding levels are falling back in many parts of the world, as the sector consolidates.