Despite the industry’s funding woes, some startups–particularly those serving others business—are thriving. Here’s the Forbes Fintech 50 for 2024.
By Jeff Kauflin and Janet Novack, Forbes Staff
The past year has been painful for the financial technology industry, with publicly traded fintech stocks languishing 50% below their late 2021 peak, even as the S&P 500 has surged to new highs. Venture capital funding for fintech startups is even more depressed–it fell more than 70% from $141 billion worldwide in 2021 to $39 billion in 2023, according to CB Insights. Both layoffs and fire sales have spread.
Yet our new 2024 Fintech 50 list is packed with extraordinary entrepreneurs who have adapted and flourished in this environment. Three categories that primarily serve other businesses—Payments, Wall Street & Enterprise and Business to Business Banking–made the strongest showing. They accounted for 27 of our 50 picks and seven of the 13 first-time honorees on this year’s list, our ninth annual honor roll of the most innovative private businesses in fintech. That’s not surprising at a time when me-too startups serving consumers no longer have seemingly unlimited VC funds to lavish on big marketing campaigns, and the real estate and crypto sectors are facing unique challenges.
(You can see the full Fintech 50 2024 list here.)
A fitting poster child for this perhaps boring, but innovative and valuable business-services trend: list newcomer DataSnipper. Based in the Netherlands, it uses artificial intelligence to match data on receipts or bank statements with records of expenses, saving many hours for accountants, who are currently in short supply. DataSnipper already has 1,400 clients, including Deloitte, Ernst & Young, KPMG and PwC, and after growing as a bootstrapped operation for five years, it just raised $100 million at a $1 billion valuation.
Cyber insurance is another business-oriented fintech strong spot, driven by the continued growth of hacking and ransomware attacks. List makers Coalition and At-Bay are using technology–and their founders’ deep knowledge of how hackers operate–to take an expanding share of the $11 billion cyber insurance market. (Read more about the trend here.) Similarly, financial fraud, supercharged by artificial intelligence, is creating opportunities for fintech entrepreneurs. Three of the returning companies on our list–Alloy, Persona and SentiLink–are aimed at stopping individual fraudsters, while newcomer Middesk helps its 600 customers, including both traditional banks and other fintechs, verify that businesses trying to open accounts or take out loans are legit.
To identify such winners, our team of nine reporters and editors analyzed hundreds of companies, evaluating everything from product novelty to customer and revenue growth to leadership team diversity. We interviewed both CEOs and industry insiders. To be considered, startups need to have their headquarters or substantial operations in the U.S. and not be part of a public company.
Two shrinking categories on our list are Real Estate and Blockchain and Crypto. High interest rates continue to slam the real estate sector, hurting startups dependent on home sales, mortgage refinancing or commercial real estate values. Only two real estate companies made this year’s list.
As for Blockchain and Crypto, with FTX founder and now convicted felon Sam Bankman-Fried in jail awaiting sentencing, and Binance founder Changpeng Zhao pleading guilty to multiple violations of the Bank Secrecy Act and stepping down from his position as CEO, the industry is turning the page. A key focus now is on companies that can guide it through an age of increased regulatory scrutiny to build more sustainable growth. That’s reflected in this year’s three crypto and blockchain Fintech 50 listers–infrastructure firms Chainalysis, Fireblocks, and newcomer Gauntlet–which have respective focuses on regulatory compliance, security and the optimization of economic models (and minimization of risk) for decentralized finance.
By contrast, back in 2022, nine crypto companies made the Fintech 50, including FTX, which had recently been valued by investors at an outsized $32 billion, making it the third most valuable fintech company in America.
That brings up another change from past years: In 2024, we didn’t rank the most valuable fintechs, but we added information on when a company last raised funds. That’s because fintech valuations have fallen so steeply from their 2021 highs that the numbers are skewed by when a company last raised funds. For example, list member Ramp grew its client base by an impressive 80% in 2023 to reach 25,000 customers for its corporate credit card and other expense management services. Yet when it raised funds this past August, it was at a $5.8 billion valuation, down from $8.1 billion in early 2022.
Intriguingly, two companies that made our first-ever Fintech 50 list for 2015 and then fell off our roster made a comeback this year: Robo-advisor Wealthfront and lending technology company Zest AI, which changed its name from ZestFinance in 2019. Thanks in part to higher interest rates and its addition of a new automated bond portfolio, Wealthfront’s revenue rose 150% in 2023 to $200 million, while its assets under management climbed to $55 billion. Zest AI more than doubled its revenue in 2023 too, reaching $38 million. It uses AI to try to help lenders grow approvals while reducing credit risk.
Some of the newcomers on our list stood out for the unique niches they’ve found. One example: Carry1st, started by 37-year-old Cordel Robbin-Coker, licenses and publishes mobile games in Africa and runs a payments platform that enables in-app purchases across the continent for such popular games as Call of Duty: Mobile.
Another notable newcomer has been making a strong run in a segment that already had an established leader. San Francisco startup Pulley helps private companies track ownership or “cap tables.” When its larger peer Carta faced customer blowback in January for sharing sensitive information about startups with secondary market investors, Pulley pounced. CEO and cofounder Yin Wu took to X, formerly Twitter, to offer Carta defectors discounts so they wouldn’t be paying on two contracts at once. Pulley now has 4,600 customers, up 109% since the beginning of 2023. That’s a long way from Carta’s 40,000, but since our list seeks to honor those innovators with momentum, Pulley has supplanted Carta on the list.
With additional reporting from Nina Bambysheva, Steven Ehrlich, Emily Mason, Javier Paz, Maria Gracia Santillana Linares, Rina Torchinsky and Hank Tucker.