Investing in Fintech – Not Just for Angels and VCs!

Fintech is one of the most rapidly evolving sectors for large scale investment. According to CB Insights, in the first quarter of 2018 alone, some $5.4 billion USD was invested in fintech worldwide – compare this to 2014, when under $4 billion was invested in the sector over the entire year.

Much of this investment, however, comes at the professional level, from high net worth angel investors, venture capital firms, accelerators and other platforms designed to service “unicorn” startup tech businesses with capital. Up until relatively recently, investors with private portfolios didn’t have a very clear picture of how to invest in fintech, or whether doing so would even be prudent or profitable.

Investors have gone all in on cryptocurrency and blockchain technologies in recent years, but fintech – aside from cannabis – is one of the hottest investment sectors right now. Fintech firms span a wide range of innovative areas in tech, including payments, online lending, money transfers, business-to-business payments, personal finance and banking. This lets investors benefit from the diverse and rapid progression of new ideas in each of these areas.

As fintech services expand, firms are doing battle to offer the most innovative and secure solutions to customers. Many firms are creating multi-component service models designed to expand into 360-degree solutions for digital financial management. The envelope of innovation is being pushed rapidly, drawing the attention of more and more investors.

Another reason that fintech can be an attractive investment is that many fintech firms have realized the value of scaling their services and products such that they can integrate with larger, more traditional financial service providers. These large providers have access to equally large and lucrative markets, and have traditionally offered greater stability for investors than might be found in the startup ecosystem.

The investment landscape is growing to accept fintech as a major area of interest. Investors can now put their faith in fintech-specific ETFs, should they so choose, offering relatively easy entry point to investment in the sector. If you are interested in investing in fintech, it would likely be best to talk to a professional advisor who can provide you with the specific information you will need.

Speaking of fintechs, Progressa was included in this recent list of ‘140+ Fintech Startups Going After Traditional Lenders’!

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