What investors are looking for in the next Fintech | FinFan
"Investors are fussier and fussier about their commitment to fintech." Said Shaun Puckrin, product manager at Global Processing Services.
More finicky investments than starving with fintech? Actually, nothing is certain, because fintech is an attractive hot spot for investors. But some recent developments have shown a change of opinion in investor interests.
According to research from Innovate Finance, “The Covid-19 outbreak caused the first half of the year, investments in fintech in the UK decreased by 39% compared to the same period in 2019. Of which, 167 fintech startups were is invested with a capital of 1.8 billion dollars. Compared to $ 3 billion for 263 startups in the first half of 2019. ”
First, investment in fintech in the UK is still up 22% from the second half of 2019. At that time, the amount being funded was only 1.5 billion dollars. This is a good sign that for the rest of the year, investors are likely to increase their investment capital for fintech startups.
Second, many venture capitals or funds are giving more favors and attention to more mature, later-stage fintech companies. More than half of the investment goes to 5 companies: Checkout.com, Revolut, Starling Bank, Onfido, Thought Machine. Is it possible that the instability of the market and the severe economic crisis after the Covid-19 pandemic made investors more hesitant, choosing safer bets? This is evident when the early fintech only call for investment 8% of the total investment.
Is there a "silver lining"?
The Covid-19 pandemic quickly pushed businesses and financial institutions closer to the digitization process; extended previous restrictions on orders that shut those who previously did not want to engage with digital financial services. This stage is like removing the previous bottleneck, fintech is invested more, promoting the development of services to meet the changing needs of consumers. Fintech will need to show their own specialties that set them apart from other companies, with industry-appropriate qualities in order to find investors.
The following four things are the shares that investors are looking forward to from fintech companies.
Strong, different opinion
The fintech market is increasingly crowded, crowded and many mature innovators appear in this field. These people have created norms for others. In this context, unfortunately, traditional banking is no longer the only place where customers can make transactions. Naturally, to get investors to notice you, you need to help them deal with the needs of the market quickly without being someone else. Not only that, your views and orientations also need to be presented meticulously and clearly. If possible, bring market research to prove your capabilities.
At that time, investors will ask themselves questions to close the problem: Why choose you? What is your most special thing? Only you can do this? Only? They also want to know how to defend and build those proposals? By doing this, you are sure to step one foot in the door of investors. For the rest of this, read on below,
Path to profit or exit for fintech companies
This is an extremely relevant point, especially given the recent news surrounding the financial results of many of the significant challenges and how they point out the path to profitability for those who challenge not necessarily. Must be simple or easy.
Under current circumstances, a fintech company needs to have the capacity to prove that such a long-term plan will bring efficiency and financial viability to the business. There are many different paths for investors to make their profits, be it selling a trade or an IPO, but the basic principles for ensuring a successful outcome are often the same. By being able to demonstrate how you can devise a course to attract and serve your customers for less than you can monetize will be on the roadmap of any subsequent pricing. regardless of the outcome.
Whatever your goal, you need a plan to support your ambitions. You need to show understanding that building a scalable and sustainable fintech can potentially require significant capital - you must invest in the right people, partners, and technology to make money. Developing competitive services, attracting customers and importantly, monetizing your services, requires hard work and the ability to adapt to the needs of your customers.
A strong and core leadership team
Ultimately, securing investment is building relationships and what often leads to scales is having the right people in the room. This is why great leadership is so important.
Great leadership means many things: Strong leadership with a vision to build something revolutionary. The skills and expertise to make that vision a reality. Experience overcoming traps and opportunities you'll face. And finally, the ambition and determination to make the business successful no matter what.
Building the right team with the right qualities is often what convinces investors that they are putting their money in the right place.
The right partnership
Linking with the right businesses and financial institutions can bring you many exclusive benefits and solutions to help develop, expand your market share, and market size. They are experienced, mature in the field and it is precious to you. Many of them have made breakthroughs and mastered this game for many years, of course, they have solved all the problems that many people are still facing.
From the investors' point of view, be confident when you are a reliable partner with full of smartest technologies. You are definitely a smart, low-risk investment that many funds or VCs are looking for. You respect their investments and use that money wisely, building real value.
Fintech investments are not dead,
After a period of recent brilliance, all are expecting investment in fintech companies to continue to increase and increase, at least compared to other sectors. But the risks from the market, the epidemic will cause investors to urgently check the potential investments before and more difficult to find a "new child".
By creating differentiated values, complete and detailed planning for the value-creating and profitable roadmap, building a professional team and finding the right partners, fintech companies will participate. Your foundation ensures that helps you create bigger visions, delivering the best real value.