Seven Australian fintechs included in KPMG and H2 Ventures annual list of the world’s leading fintechs.
Australian fintech companies made a strong showing in the 2019 Fintech 100, announced today by Fintech Innovators, a collaboration between fintech investment firm H2 Ventures and KPMG Fintech.
Seven Australian fintechs were selected among the world’s leading players, with cross-border payment provider Airwallex the highest ranked Australian firm at #32 on the Top 50 Established firms, having risen from #49 in 2018. It’s followed by challenger bank Judo Bank at #33 and online payment service AfterPay Touch at #47.
On the Top 50 Emerging firms list, Australian fintechs included mortgage provider Athena Home Loans, voice analysis engine daisee, disaster response provider Sempo and smart receipts app Slyp.
As in 2018, payments and transaction companies dominated the list, representing 27 of the ranked firms. On a positive note, wealth companies (19) and insurance companies (17) have both continued to rise in prominence this year. Four of the seven Australian companies ranked are payments companies.
The Asia-Pacific region also dominated for another year, with Ant Financial (China) coming in first place for the second year running, followed by Grab (Singapore) and JD Digits (China). China has dominated the Fintech100 for the past 3 years and this year is no different with three Chinese fintechs in the Top10.
Ian Pollari, KPMG Australia’s National Sector Leader, Banking, and Global Co-leader for KPMG Fintech practice said: "Australia’s fintech ecosystem continues to perform well – with established players like Airwallex and AfterPay expanding globally and SME challenger, Judo raising substantial capital. We are also seeing a continued pipeline of new fintech innovators being launched in Australia – with all four of our local emerging list founded in 2017.”
“Globally, we have seen a rise in companies from across the Asia Pacific (including China) which represent the top 6, and 7 of the top 10 fintech companies in 2019 with China again securing the most top ten positions. In 2019 we have also seen the emergence of India as a fintech force taking out 2 top 10 positions and with 8 companies on this year’s list in total,” he added.
Toby Heap, Founding Partner, H2 Ventures commented: “This year’s Fintech100 reveals a significant increase in venture capital backing of fintech companies. The companies on the 2019 List have raised over US$70B in venture capital (a 35 percent increase on last year’s figure) and over US$18B of capital in the past 12 months.”
“We have also seen a drop in the number of payments and lending companies making the Fintech100. They have been replaced by a surge in the number of wealth, insurance and multi-sector companies.”
Australian fintechs are also benefitting from being at the forefront of several key trends identified:
Flow of capital
The Fintech100 companies in this year’s list have raised over US$18B in the last 12 months. 32 companies on the Fintech100 have raised at least US$100M in the last twelve months alone and the average capital raised by the top 10 companies in the past 12 months is over US$1.25B. Significant Venture investors in Fintech companies include Sequoia Capital and SoftBank, together with strategic investors such as Alphabet (Google’s Holding Company), BBVA and Tencent Holdings.
South East Asia is the latest hot spot
There are more Asia Pacific based companies on the 2019 fintech100 than from any other region. Of the 11 companies that have raised over $1B in the past 3 years, 8 are from the Asia Pacific serving customers in China, India and rapidly emerging markets in South East Asia such as Indonesia, Vietnam and Thailand. The smart money is rapidly flowing to fintechs focused on this region.
An increasing number of fintechs are rapidly globalising across multiple jurisdictions, with examples including Australia’s AfterPay Touch.
Monoline to mainstream
Early fintech innovators with monoline product propositions are now diversifying to fulfil a greater set of mainstream customer needs. Australia’s favourable regulatory developments, such as the Restricted ADI License, are facilitating greater levels of competition and customer choice.
Almost every company on this year’s list is a beneficiary of a global policy shift to putting customers in control of their data, including Australia’s Open Banking and Consumer Data Right legislation, which is driving competition and allowing fintechs to access customer banking data to create faster, more personalised and innovative services.
The Fintech 100 were selected following extensive global research and analysis based on data relating to five factors. These selection criteria are the key metrics used to calculate the rankings of companies in the Fintech100 list because of the emphasis that venture capitalists place on the ability of firms to generate a long term sustainable competitive advantage.
H2 Ventures is a leading early stage venture capital firm based in Sydney, Australia. They run the H2 Accelerator, a twenty week, in-house program focused on fintech, data & artificial intelligence. Founded by brothers Ben and Toby Heap, H2 is reinventing financial services, data and artificial intelligence by bringing together talented entrepreneurs, investors, forward-thinking established organisations and other thought leaders in the world of technology enabled disruption.
The Financial Services industry is transforming with the emergence of innovative new products, channels and business models. This wave of change is driven by evolving customer expectations, digitalisation, as well as continued regulatory and cost pressures. We are passionate about supporting clients to successfully navigate this transformation, mitigating the threats and capitalising on the opportunities. KPMG Global Fintech comprises professionals in over 35 fintech hubs around the world, working closely with financial institutions and fintech companies, to help them understand the signals of change, identify the growth opportunities and to develop and execute on their strategic plans.