Financial Tech and blockchain-based services are becoming one of the fastest growing industries worldwide. With the globe’s economy seemingly in turmoil and markets having a horrible first week of 2016, things seem gloomy ahead. However, FinTech and distributed ledger startups are still getting injected with lots of funding.
Markets had a bloodbath all week as China opened up the exchanges with severe losses on Monday triggering a domino effect globally. The only commodity stock looking like it was doing fairly decent was Bitcoin. The week also proved positive for many financial tech startups and cryptocurrency services looking for venture funding. The FinTech sector is not slowing up in the least and confidence in investing is strong even with a forecast of a downturn in financial markets. Many businesses got a boost this week from those who still believe the mixing of technology and finances is here to stay.
Gem shines as it raises $7M
Gem, the blockchain API service that builds “your blockchain architecture” and “gives you the tools to go from ideas to production fast,” raised over 7 million dollars this week. The funding round was led by Blockchain Capital, Digital Currency Group, and other investors. Gem has done well with raising venture capital since its inception in January of 2014. Micah Winkelspecht, Gem’s CEO and founder, is pleased with the series A funding round and has great faith in blockchain technology. With over 50+ banks invested in distributed ledger tech, it is no wonder Winkelspecht and so many other startups are so excited.
FinTech defying market woes
One attractive sector that’s growing exponentially as reported by Accenture is online lending platforms. It’s an intriguing shift after the banks crashed in 2008 and failed to rebuild the loan markets. Orchard Platform, a FinTech initiative that works within the growing lending market, has raised 30 million this fall. The company has become one of the latest FinTech lenders to watch within the emerging industry. The New York-based company has been funded by quite a few investors.
“Marketplace lending has been validated as kind of the future of how credit is going to be extended,” Orchard CEO Matt Burton told the press. “Investors have been embracing companies in the space.”
Along with Orchard, another lending service called CommonBond is also attracting investors. The financial company had announced on January 5th that it pulled in $275 million in student lending capacity with big investors joining in including Barclays.
On January 6, more money came to the financial tech world by another series A funding round for $1 million USD to the Indian Bitcoin wallet Zebpay. The mobile application that allows its userbase to buy and sell the digital currency was founded in 2012 by Mahin Gupta and was formerly called Buysellbitco.in. The business appeared as India’s first Bitcoin exchange within the region and has continued its services under the rebrand Zebpay. These company changes also added two partners Saurabh Agrawal and Sandeep Goenka with the company being named best new Bitcoin company at the CoinAgenda conference in 2014. Zebpay says it’s “the fastest and easiest way to buy and sell Bitcoins in India” and aims to strengthen the region’s cryptocurrency adoption.
The Hamburg-based startup Deposit Solutions received a EUR 6.5 million funding round on January 8th this year. Deposit solutions is a bank-to-bank (B2B) based operation focusing in on retail deposits across European nations. The company’s platform enables banks to list and sell within the system cutting costs for banking clientele. PayPal founder Peter Thiel has added his name to the growing list of investors.
“With its unique approach, Deposit Solutions is revolutionizing the value chain in the retail deposit business by creating significant advantages for savers and banks,” explained Thiel. “It offers a clear, distinct competitive alternative secured by a proprietary technology with the potential to become the new back-end for the European retail deposit market.”
FinTech may soon become an oasis amid a desert of constrained markets and illiquidity as investments continued pouring in throughout the last quarter of 2015 and into 2016. Investors like Peter Thiel, Goldman Sachs, Barclays and many other angel investors are placing their bets on the next big startups while giving the nascent industry quite a boost. Look out for FinTech, cryptocurrency and blockchain solutions to continue disrupting the legacy banking system as it continues to rely on its only true advantage – innovation.
What outcomes do you see for FinTech and cryptocurrency markets in 2016? Let us know in the comments below.
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