Monday , June 24, 2019

The Unicorn Herd Enrolled Yet More Fintech Members Last Year Following an Active 2017

The financial news has been full of dire stories about the beating tech stocks have been taking lately, but less well publicized is the action in private equity—specifically the creation of new payments-related unicorns.

According to data from New York City-based CB Insights, which tracks private valuations, at least half a dozen fintech startups saw their valuations in 2018 climb to or past $1 billion, the generally accepted threshold for unicorn status. That pace follows a frenetic 2017, when 10 fintechs achieved that lofty goal.

The six new unicorns include three digital banks—Brazil’s Nubank ($2 billion) and the United Kingdom’s Revolut ($1.7 billion) and Atom Bank ($1.25 billion)—as well as peer-to-peer payments company Circle Internet Financial ($3 billion), China’s mobile brokerage Tiger Brokers ($1 billion), and Policybazaar ($1 billion), an India-based mobile insurance market.

All told, CB Insights estimates more than 300 startups worldwide are now on the unicorn list. Some 52 had been added last year by August, according to the latest detailed list CB Insights has compiled. Other payments-related firms on the list include Affirm ($2 billion), AvidXchange ($1.4 billion), Coinbase ($1.6 billion). Funding Circle ($1 billion), Gusto ($ billion), Kabbage ($1 billion), Klarna ($2.5 billion), One97 Communications ($5.7 billion), and Stripe ($9.2 billion). Gusto offers a cloud-based payroll service. One97 is the operator of India’s Paytm mobile-payments service.

But winning a lofty valuation from investors doesn’t protect a company from committing blunders. Robinhood Markets Inc., a Menlo Park, Calif.-based financial-services startup that joined the list in 2017 and now boasts a $5.6 billion valuation, last month ditched a checking/savings account it had announced only in November that included no fees, a 3% interest rate, and a Mastercard debit card.

And in 2016, a U.K.-based e-commerce provider and point-of-sale terminal maker called Powa Technologies Ltd. failed after a meteoric rise that saw it achieve a $2.7 billion valuation.

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