The Forbes’ Fintech 50 List And Uncovering Trends In Fintech

I was delighted to see Fundbox make it to Forbes’ Fintech 50 List for the second year in a row. Like the famous saying “Tell me who your friends are, and I will tell you who you are”, the satisfaction I get from seeing my company’s name on that list is very much driven by the high caliber of the rest of the companies that made it.

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Another reason why I like Forbes’ Fintech 50 is because it’s an opportunity to think about the state of the industry as a whole, and how it has changed over the last year, as reflected in the list. Here are some observations from this year’s list:

  • Most companies on the list were also there last year. While one can chalk that down to Forbes’ data gathering and decision making, it’s also a product of how long it takes to build truly great companies in Fintech.
  • Three verticals dominate the list. Capital markets, online credit, and personal investment management account for ~70% of the list in both 2015 and 2016.
  • Insurance and compliance are the emerging categories. The 2016 list includes several companies in two new categories: Metromile and Signifyd (Insurance) and Digital Reasoning (Compliance). Both categories have been gaining a lot of traction recently with both entrepreneurs and investors.
  • Insurance tech seems underrepresented. Compared to how many insurance companies are out there raising significant money from powerhouse investors, there is hardly any representation for insurtech in this years’ list.

Reading these types of lists always gets me curious about the research methodology used to compile them. I suspect many of the writers are susceptible to the observer bias inherent in the industry, as well as the network biases that exist in the tech journalism ecosystem.

Also, there’s obviously a bias towards more established companies, which makes it hard to correctly identify and quantify the emerging trends without more quantitative research about earlier stage companies. I’ll definitely add that to my research TODO list. Stay put.

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