Do you believe in Unicorns?

It’s mid-summer and quiet, but there is some interesting stuff still happening, particularly when we talk about Unicorns.  Do you believe in Unicorns?

Unicorns, in technology terms, are companies with valuations of more than $1 billion that have launched since 2000. 

There are quite a few of them out there including Uber, Airbnb, Twitter, Whatsapp, Snapchat, Pinterest and more.

In fact, Techcrunch’s latest analysis finds 84 U.S.-based companies belonging to what they call the “unicorn club,” a 115% increase in one year and finding 8 new unicorns born every year.  The largest Fintech unicorns are Square and Lending Club, according to their analysis, but Finovate  find a few others, including Lufax and Klarna.

To put this in perspective, Microsoft’s market value at IPO was $500 million whilst Cisco’s was $300 million.  Alternatively, the market capitalisation of Barclays Bank is just over $60 billion today … about the same as ten Lending Club’s.  The difference being that Barclays is over 300 years old whilst the latter is less than 10 years old.

Now OK, market valuations are not an indication of real value, as the exit value of some of these privately funded firms may be very different to their paper value, but it does show the hype and bluster around Fintech, and tech generally, today.

Meanwhile, from a UK perspective, we have quite a few emerging Fintech unicorns including:

 

Algomi - a social network for the bond market

Founded: 2012

Founders: Stu Taylor, Usman Khan, Robert Howes, Michael Schmidt

Headquartered: Fenchurch Street, London

Funding to date:  £7.7 million ($11.8 million)

Headcount: 130

Founded by former UBS bankers, Algomi has created a social network for the bond market that connects those who want to sell with those who want to buy.  Prior to Algomi, this was done through speculative phone calls wasting a lot of time. It's service is currently used by nine banks, including some of the world's biggest.  The startup, founded in 2012, has offices in New York, Hong Kong, San Francisco and Chicago, and is planning a major push into the US.

 

Crowdcube - equity crowdfunding from selling shares online

Founded: 2011

Founders: Darren Westlake, Luke Lang

Headquartered: University of Exeter campus, Exeter

Funding to date:  £7 million ($10.6 million)

Headcount: 67

Crowdcube is an equity crowdfunding platform that lets businesses raise money by selling shares online. Company's including London's Camden Town Brewery and start-up JustPark have raised a combined £80 million ($122.5 million) on the platform since it launched in 2011.  Founder Darren Westlake has said he was inspired by seeing great ideas on Dragon's Den that got turned down.

 

eToro - lets you follow top traders and automatically copy the trades they make

Founded: 2006

Founders: Yoni Assia, Ronen Assia, David Ring

Headquartered: Canary Wharf, London/Tel Aviv, Israel

Funding to date: £47.5 million ($72.9 million)

Headcount: 200

This 'social' trading platform allows you to follow top traders and even automatically copy the trades they make on things like currency and stocks. The company recently raised $39 million (£25.5 million) to break into Russia and China. It currently has offices in the UK, Israel, Russia, Cyprus and Australia, and is planning to open more overseas soon. The company just this week signed a three-year sponsorship deal with London Premier League football team West Ham.

 

GoCardless - direct debit processing for small businesses

Founded: 2011

Founders: Matt Robinson, Hiroki Takeuchi 

Headquartered: Islington, London

Funding to date:  £7.7 million ($11.8 million)

Headcount: 60

This business uses smart technology to make it much easier for businesses to accept and process direct debits. As well as smart tech, the start-up allows small businesses to accept direct debits by aggregating payments to make it affordable.  GoCardless started life in Silicon Valley's legendary Y Combinator accelerator and recently passed £500 million ($765 million) worth of direct debits processed. The company currently has around 11,000 customers including TripAdvisor, The Guardian, the FT and Box. GoCardless is currently focusing on expanding across Europe.  Founders Matt Robinson and Hiroki Takeuchi are both Oxford graduates who met while working as management consultants at McKinsey. 

 

MarketInvoice - lets companies borrow against unpaid invoices

Founded: 2011

Founders: Anil Stocker and Ilya Kondrashov

Headquartered: Holborn, London

Funding to date: £6.6 million ($10.4 million)

Headcount: 60

This peer-to-peer lending platform lets companies borrow against unpaid invoices online. £400 million ($612 million) has been lent since launch and lending volumes are growing by an average of 30% each month.  Founder Anil Stocker worked at Lehman Brothers before it collapsed, while his co-founder Ilya Kondrashov is a Goldman Sachs alumni.

 

Nutmeg - investment management services for the rest of us

Founded: 2011

Founders: Nick Hungerford, William Todd

Headquartered: Vauxhall, London

Funding to date:  £24 million ($37.3 million)

Headcount: 75

This start-up makes investment management services that are usually reserved for the wealthy available online for sums as small as £1,000 ($1,530). Savers can set goals like buying a house or paying for university and Nutmeg's money managers will invest their cash accordingly.  Investors in the company include ICAP founder Michael Spencer, Carphone Warehouse founder Sir Charles Dunstone and FTSE 100 asset management company Schroders.  Founder Nick Hungerford is another fintech entrepreneur who has fled from the City, formerly working at stock broker Brewin Dolphin and Barclays wealth management.

 

RateSetter - lets people lend their savings to individual borrowers

Founded: 2009

Founders: Rhydian Lewis, Peter Behrens

Headquartered: Southwark, London

Funding to date: £30 million ($10.4 million)

Headcount: 100

RateSetter is a peer-to-peer (P2P) lender like Zopa that lets people lend their savings out to individual borrowers. Ratesetter was the largest P2P lender in the UK by volume last year, lending £292 million ($447 million). The business is already profitable. Prior to Ratesetter, founder Rhydian Lewis worked at boutique investment bank and financial advisor Lazard, which advised the Government on the sale of Royal Mail. Peter Behrens, the other co-founder, was a banker with Royal Bank of Scotland.

 

WorldRemit - cash transfers to emerging markets

Founded: 2009

Founders: Ismail Ahmed

Headquartered: Hammersmith, London

Funding to date: £96 million ($147.7 million)

Headcount: 200

Like TransferWise, WorldRemit offers cheaper international money transfer services than traditional rivals. The Hammersmith based company focuses on transfers to emerging markets like Africa and Asia.  Somali-born founder Ismail Ahmed helped the UN crack down on money laundering before setting up the business.  WorldRemit was valued at $500 million (£326 million) in a recent funding round in which it raised $100 million (£65 million).

 

Zopa - a pioneer in peer-to-peer lending

Founded: 2005

Founders: James Alexander, Richard Duvall, David Nicholson, Giles Andrews

Headquartered: Farringdon, London

Funding to date: Over £35 million ($55 million)

Headcount: 100

Zopa was a pioneer in peer-to-peer lending in the UK. Its platform lets people lend money to consumers and more than £850 million ($1.3 billion) has been lent over its platform.  Before Zopa the company's founders launched online challenger bank Egg in the UK in the late 1990s.  Zopa recently partnered with challenger bank Metro Bank to offer loans to consumers over its platform.

 

UK list sourced from Business Insider