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Covid-19 Impact: Pandemic leaves positive impact on Fintech start-ups

Fintech, businesses with the amalgamation of finance and technology has been gaining traction for some time now.

The global fintech market stood at valuation worth $111 billion in 2019, but this year alone about $22 billion has been raised by fintech startups through 614 deals in the first quarter compared to the $10 billion in 2020 through 560 deals.

Stripe the biggest fintech company around the world is currently valued at $95 billion. During the pandemic year it saw its net worth rise by $35 billion. It processes business transactions for several corporates.




FINTECH MARKETS AROUND THE WORLD

  • THE AMERICAS

North America is said to have the largest fintech ecosystem. It has 10,605 fintech startups as of 2021 the highest number in the entire world. By 2026 this market is its said to be worth $110 billion.

A CB Insights report stated in the first few months of 2021 United States received double the investment, some 220%. From $6.8 billion in 2020 to $12.8 billion in 2021.

Studies have also found that nearly 38% of the personal loans in the United States are granted by fintech corporations.



While the Latin American market is projected to hit $150 billion by the end of 2021. There are about 700 fintech firms in this region.

Most of their fintech startups have raised roughly $600 million in 2020. Neo and challenger banks received the most amount of funding.

  • Europe, Middle East and Africa

Fintech applications usage in Europe alone saw a rise 72% amidst the pandemic. Together these fintech have raised $5.04 billion in the first few months of 2021 compared to $1.8 billion in 2020. This was a staggering 180% jump.

Europe, Middle East, and Africa together have 9,311 fintech start ups as of 2021.

  • ASIA-PACIFIC

Asia Pacific nations together have about 6,129 startups as of 2021.

Asia houses the second largest fintech ecosystem in the world. It raised about $3.6 billion in the first few months of 2021 compared to $1.9 billion the previous quarter.

  • INDIA

When the pandemic hit last year this sector was accelerating with flying colors. Three unicorns came about in the beginning of this year – CRED, Digital Insurance and Groww. Together they raised about $300 million in the first quarter of 2021.

The highest valued fintech startup in India is Paytm, a valuation of $16 billion. It was recently dethroned as the most valued unicorn Edtech start up in India by an  called Byju’s.




Paytm is going to make an initial public offering (IPO) this year in hopes to raise $3 billion and is targeting a net valuation of nearly $30 billion.

At the moment this sector is valued at $50 billion. By 2025 this market in expected to be valued at $ 150 billion, said a report by Boston Consulting Group.

THE FUTURE

By 2026 the market is set to be valued at $324 billion with a growth rate of 23%.

A report by PWC has said that 77% of the financial service incorporations shall adapt to blockchain in fintech for in product, processes and systems operations.