The Financial Situation for Tech Companies in the Financial Sector
In the ever-evolving world of Fintech, the landscape of funding has undergone a significant transformation, as highlighted by Tom Filip Lesche, a partner at the renowned venture capital firm, Speedinvest. Based in Vienna, Speedinvest has a substantial portfolio in the Fintech sector, including companies like Bitpanda, Upvest, Billie, Wefox, and Holvi.
According to Lesche, the funding landscape for Fintech startups has become more cautious and selective compared to the past few years. During the Fintech boom, an abundance of capital was available, leading to high valuations and a surge of investments in a wide range of startups. However, more recently, investors have shifted their focus towards unit economics, path to profitability, and sustainable growth.
This change means that while Fintechs are still able to attract funding, the criteria have become more stringent. Investors are now less inclined to fund purely growth-at-all-costs models and prefer startups that demonstrate resilience, solid fundamentals, and the potential for long-term value creation.
Kevin Hackl, a key figure in the Payment & Banking Bubble, echoes similar sentiments. He is particularly active in the Payment, Banking & FinTech space and is involved in discussions about Open Finance, Retail Investing, Crypto Assets, and Digital Euro. Hackl is also a community builder and lobbyist for financial themes at the digital association bitkom.
The podcast, which discusses the current funding landscape for young Fintechs, provides perspectives from both investors and Fintech founders. It covers the Fintech funding scene from the pre-Corona gold rush, through the funding drought, to the present day.
It's important to note that exits and IPOs play a role in the current funding landscape. As Lesche points out, promising business models in the Fintech space are still attracting attention, and successful exits can help to encourage further investment.
For founders looking to raise risk capital, it's crucial to do their homework. The landscape of risk capital providers has changed, and it's essential to understand the new focus on discipline, profitability, and sustainability.
Lesche, who has also founded a company himself, finds these changes encouraging. He believes that this shift towards a more disciplined approach to funding will lead to a healthier and more sustainable Fintech ecosystem in the long run.
In conclusion, the Fintech funding landscape has evolved, moving away from a growth-driven, capital-abundant environment towards one where discipline, profitability, and sustainability are key factors influencing funding decisions. This shift is likely to continue as investors and founders alike seek to create long-term value in the Fintech space.
Technology plays a significant role in shaping the current trend of Fintech businesses, enabling startups to develop innovative solutions for investing, finance, and business operations.
Investors are no longer solely focused on growth-at-all-costs models but are increasingly interested in startups that exhibit resilience, solid business fundamentals, and the potential for long-term value creation, aided by advancements in technology.
