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A decade of fintech failure? I don’t agree …

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Isn’t the message of the start-up world to fail fast and pivot?

Grant Easterbrook, a fintech consultant and former founder of Go Forward, writes on Techcrunch about four areas of FinTech that didn’t live up to the hype and, in his words, failed. I was intrigued by this, as I don’t think any part of FinTech has failed. Equally, even if it has, failure is good. You learn from mistakes. So, I’m going to pick his thoughts apart a little and give my own take.

In doing so, I’ll share Grant’s musing first and then give my response. Let’s start with:

“Lost in all of the celebration of success and the billions of dollars in venture capital funding are the ideas that did not succeed. Over the last decade, many once-promising innovations failed and did not live up to expectations. It is important to not just celebrate success but also to learn the lessons from failure.”

I’m glad that Grant added the last line, as this is key. But it’s interesting when you have a market that has grown in the last decade from a few to around 30,000 start-ups around the world in the FinTech space, garnering almost half a trillion dollars of investment, that he is claiming many have failed. Of course, not all succeed and many are misguided, but the markets have changed and the failures are learned.

“This article is not focused on highlighting the demise of individual high-profile fintech startups that never justified their lofty valuations. Nor are we reviewing the various failed initiatives undertaken by large corporations, such as BloombergBlack or UBS’ SmarthWealth. Rather, this piece will focus on fintech ideas that received some degree of initial hype and momentum, but ultimately did not live up to their promise.”

So, what are they focused upon? Grant picks out four areas of failure:

  1. Algorithm-based buy/sell/hold advice for investment portfolios
  2. Peer-to-peer (P2P) lending and insurance
  3. On-demand insurance and standalone financial planning apps
  4. Trade-mimicking services

Let’s pick these apart.

Algorithm-based buy/sell/hold advice for investment portfolios

#1 area which Grant has picked is the failure of roboadvisors. Really? He points to Financial Guard, FutureAdvisor, Jemstep and SigFig who had to pivot their business models to survive. Urmm, what about Betterment, Wealthfront, Nutmeg and the rest? At the end of 2021, Betterment was valued at $1.3 billion (a unicorn); UBS was going to buy Wealthfront for $1.4 billion at the end of last year, but didn’t for various reasons; meanwhile Nutmeg was acquired by JPMorgan to support their launch of the Chase UK digital banking app, which shows there’s something in it. In the latter case of Nutmeg, the valuation was around $1 billion (a unicorn), and demonstrates a market that’s succeeded. The failures are those that had the wrong model or management, not the failure of this space.

Peer-to-peer (P2P) lending and insurance

Grant claims that P2P didn’t work because the companies like Lending Club and Lemonade couldn’t attract investors. Interesting. Admittedly P2P lending is challenged right now due to the overall recessionary climate, as demonstrated by Lending Club who has just slashed 14% of its workforce,  but it has not failed. Neither has P2P insurance. Again, there are recessionary issues, but Lemonade has changed its business model significantly so that it’s now partnering with traditional insurance like Aviva. The business works; it’s just the business model that had to change.

[Fintech-led digital lending to surpass traditional lending by 2030]

On-demand insurance and standalone financial planning apps

In this case, Grant picks on a business like Trov. On-demand insurance for a few hours. So, let’s take a look at Trov. Insurance Business Magazine picked up on this story:

“Some of the most-highest-profile known MGAs and young carriers have not lived up to expectations,” [Adrian Jones, a partner at HSCM Ventures which invests in insurance and insurance technology] observed. “In some cases, that was because they didn’t appreciate the insurance fundamentals in the way that they needed to.”

Those companies include Trov, which started out life as an MGA and never made money. Travelers eventually acquired its technology assets which included a platform enabling the embedding of insurance products. There’s also Metromile, which was initially an MGA, which got snatched up by Lemonade, a relatively promising digital insurer that remains unprofitable.

So yes, some InsurTech’s are struggling. But it does not mean the market is broken. It’s more of a case of reinsurance drying up that means these early start-ups cannot offload risk. It’s all signs of a recessionary climate, once again, and that is what is challenging the FinTech world today. Not the fact that these firms have no idea and no future.

Trade-mimicking services

Here, Grant claims that, “as of 2023, investors seeking to outperform the market still primarily use large, established financial brands to manage their money. While BOTS and a handful of other trade-mimicking firms have been relatively successful, the model has yet to go mainstream”. Urmmm … have you heard of eToro Grant?

eToro is the OG and GOAT in this space, and I’ve been a fan of theirs ever since meeting their founder, Yoni Arria, over a decade ago. Some useful stats:

  • eToro generated $1.2 billion revenue in 2021, a 103% year-on-year increase
  • In June 2021, eToro reached 20 million active users
  • It set an IPO valuation of $10.4 billion, a 316% increase on its 2020 valuation

So this is failure? I don’t think so.

All in all, as I cited in last year’s post about the FinTech bloodbath, there are many issues out there with the thousands of start-ups in our space. Many are failing as their cash runway is drying up and failing; their aggressive growth targets are failing; their access to funds is failing; their word-of-mouth is failing; or whatever. However, what is not failing, is the ideas and innovations. After all, isn’t the message of the start-up world to fail fast and pivot?


Chris Skinner Author Avatar

Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog,, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...

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