Looking back at an exciting year in fintech

2018 was another eventful year for the fintech industry. We saw a new wave of IPOs, record investments and the arrival of PSD2 and Open Banking.

For our team here at Spotcap, it’s been a busy and rewarding 12 months. Thanks to our enhanced product offering, the dedication of our team and our strong partnerships, we experienced tremendous growth in the past year. By year-end, we will have issued nearly EUR 300 million in credit lines to businesses in our five markets, after surpassing the EUR 250 million mark back in September.

Alternative finance on the rise

Demand for unsecured, more flexible funding solutions continues to rise across the globe. Small and medium-sized enterprises (SMEs) often don’t have sufficient collateral to secure finance from traditional lenders, or they are put off by the lengthy application process. They rather concentrate on growing their business instead of spending all their time and energy securing financing. It’s no surprise then, that the global alternative finance market is projected to reach more than USD 760 billion by 2022.

Fintech investment hits record high

Even though 2018 isn’t over yet, investment in the fintech industry has already surpassed last year’s levels. Capital raised in the first nine months 2018 amounted to $32.6bn, a more than 80 percent increase compared to the $17.9bn invested in 2017. The size of deals also kept increasing throughout 2018, reflecting the maturity of the industry.

 

 

It’s reassuring to see that investor confidence is high as sufficient funding is essential for fintech companies to ensure future growth. Established fintechs with proven business models have been particularly successful in securing funding. Spotcap has so far raised around 100 million euros in funding, which has enabled us to optimise our product, invest in our team and enter new markets.

 

Candidates prefer fintechs to banks

As the industry matures, fintechs are becoming increasingly popular employers. According to LinkedIn’s recent Recruiter Sentiment study in the UK, more candidates want to work for fintechs (40%) now than for traditional banks (32%).

This is great news for us as we’re always looking for skilled talent to further strengthen our team. In 2018, we grew our total headcount more than 130 and expanded our C-Suite, including two newly created roles of Chief People Officer and Chief Marketing Officer, to further build our global brand and to ensure we’re all geared up for future growth.

Collaboration is the way forward

The introduction of PSD2 and Open Banking regulations, requiring banks to make data available to trusted third-party providers via APIs, marked the beginning of a new financial ecosystem. We believe that the future of the financial services lies in collaboration – and we’re not alone. A 2018 report by Capgemini found that 91 percent of banks want to partner with fintechs, and 75 percent of fintechs want to collaborate with banks.

Earlier this year, we launched our Lending as a Service proposition and entered into a market-leading strategic partnership with BAWAG Group in Austria. In addition to direct lending under the Spotcap brand, we now leverage our innovative technology in mutually beneficial partnerships to better serve SMEs across multiple markets with unsecured credit.

For us at Spotcap, our strategic partnerships play an increasingly important role for our global growth strategy. Even though legacy systems can make it challenging for banks to integrate new technologies with fintech partners, we believe the right partnerships can be a win-win-win for banks, fintechs and customers.

2018 was a great year for Spotcap. I would like to thank our small business customers, our partners and our fantastic team for their continued support. We look forward to 2019 and to further building on the progress we made this year.