Growing 25% year on year, fintech is the fastest growing financial sector, and it's estimated that by the end of this year, it will be worth well over USD 310B. According to PwC, the number of fintech unicorns grew from 36 in 2016 to 159 in 2021. We've seen an explosion of fintechs spanning from remittances to lending, from banking to correspondent banking and financial services infrastructure, without even mentioning blockchain and the rise of blockchain exchanges in the last two years.
This is the premise that kicks off episode one of our second season of Architects of Change - Mambu’s change-centric podcast that celebrates the mavericks championing positive change in their industry, organisation, society and the world. In this season, we keep offering hands-on advice from inspiring entrepreneurs and innovators, and serious up-and-comers, every two weeks on Wednesdays.
In this episode, Bloom Money founder, Nina Mohanty is joined by Carolina Brochado from EQT Growth Fund and Mambu’s VP of Marketing Laurel Wolfe to discuss market trends, investment booms and busts.
Whilst European and South American fintechs have been historically underfunded, today they are finding their way to success by directly addressing and solving customers' pain points, like decacorn Nubank in Brazil. The company's differentiating factor is to offer a credit card which is controlled completely through the means of a mobile app. The app allows its users to track transactions in real time, block their cards, apply for a limit raise and contact customer support. Consumers want more convenience, control and choice in their financial lives. So anything that's going to be catering towards that is likely to gain significant traction. Today, Nubank is the world’s most valuable digital neobank with a freshly minted billionaire female co-founder, Cristina Junqueira.
Being also Brazilian and female in an industry where women are still dramatically underrepresented, Brochado can offer perspective on this by challenging conventional paradigms: “I’ve been in many board rooms where I was the diversity element and I’ve always found it really powerful. I never know in what ways my perspective is going to be different, but it always is.” Brochado is big on the importance of bringing together different kinds of (life) experiences (and viewpoints), and the power of diversity as a vehicle for creativity.
“If I had a big bag of cash, I couldn’t resist investing in something that is female-led, like health-tech” echoes Wolfe. “I also admire brands like Vestiare Collective, Vinted and Etsy because I’m a vintage and resale shopper and I love seeing sustainability and circular economy infiltrating fashion.”
Anecdotal evidence shows how female-led businesses put diversity, purpose and general ESG practices at the core of their businesses, including internal processes and impact on employees. This is opposite to how most businesses operate today, where ideas and products come first, then tackle go-to-market strategies and only look into their corporate responsibilities at a much later stage.
Having said that, the end game seems to be that we don't have to label start-ups as female founded anymore. Women represent roughly half of the world’s population, so that should be reflected in entrepreneurship too, 50% should be women. Today, labelling helps us bring attention to the issue, but eventually to really succeed in harnessing diversity, we should be able to talk about and fund great entrepreneurs, great ideas for what they really are.”
So is it fair to say we've made a lot of progress when it comes to women in senior roles, especially in start-ups? Listen to the Architects of Change’s Fintech ever after podcast, here.