The top three fastest growing fintech firms in the US
This week, Inc released its annual list of the 5,000 fastest growing companies in the US. Check out the three fastest growing fintech firms in the country.
Founded in 2015, YieldStreet is a New York-based fintech startup aimed at democratising investment opportunities in non-traditional markets like real estate, marine/shipping, legal finance, commercial loans and more.
Company founder Milind Mehere is a successful tech entrepreneur who was seeking investment opportunities outside of the stock market that had real collateral and attractive yields.
Reportedly, he soon realised that asset-based investments in asset classes like litigation and real estate were nearly impossible for an accredited investor like himself to access. These investments were dominated by institutions with high minimums and long holding periods that shut out everyday investors.
YieldStreet’s solution to this accessibility problem is its platform that connects accredited investors to asset-based investment opportunities across multiple asset classes, and provides deserving borrowers with affordable capital.
The startup raised $62mn in a Series B funding round in February 2019, which will reportedly be used to expand the platform and lower the bar even further for investors. According to Inc, YieldStreet grew by 10.562% over the past three years, making it the 14th-fastest growing company in the US.
The second-fastest growing financial services company on the list is LendingPoint. Based in Kennesaw, Georgia, the fintech startup increased in value by 9,265% over the past three years.
LendingPoint is a balance sheet lender committed to redefining who is able to access money at fair rates, and empowering consumers to build financial momentum. By focusing less on applicant credit scores and using its own proprietary data analysis solutions, the company works to provide its services to millions of underbanked Americans.
“Our platform saw more originations in 2018 than in 2015, 2016 and 2017 combined, and at the same time our credit performance improved allowing us to facilitate more financing for consumers online and at the point of sale. We are incredibly grateful to our customers and proud of the LendingPoint team,” said LendingPoint CEO Tom Burnside in response to the recent ranking announcement.
Nationwide Mortgage Bankers
Founded in 2011, Nationwide Mortgage Bankers is the oldest of the three fastest growing fintechs. Based in Melville, New York, the company is also the biggest employer, with 400 people working under its roof. In the past three years, Nationwide Mortgage Bankers reported 5,450% growth in revenue.
The company operates as an independent mortgage lender. This week, the company introduced its mortgage service that provides information regarding best homebuying practices to persons who speak Spanish.
The platform, Americasa, was created to educate the Latino community on the best mortgage options available to them. According to the press release, “In the US today, there is a lack of information related to mortgage borrowing available to Spanish speakers. NMB saw an opportunity to better serve Spanish-speaking persons by developing a Spanish language resource for potential borrowers to fill this gap and provide educational resources surrounding the mortgage process.”
Stripe backs Step - the digital bank for teens
The Series C round raised US$100m in capital from a number of backers, including Coatue, TikTok star Charli D’Amelio, actor Jared Leto, and Will Smith’s Dreamers VC, for the enterprise.
Step provides a free FDIC-insured bank account and Visa card to teenagers. The accounts are backed by Evolve Bank and there is no subscription charge for its usage. Users don’t pay for their accounts and there are also no overdraft fees.
The mobile banking app enables parents to set controls and limits on spending and encourage responsible finances. According to data released by the company, 88% of the platform’s users say this is their first bank account.
To date, Step has seen great success in the marketplace. The company has raised more than $175m from investors and now has 1.5m users.
Stripe, which was founded by Irish brothers Patrick and John Collison, previously led Step’s $22.5m Series A round in 2019.
Step's Series B funding round also brought in $50m, and has a distinctly celeb-tinged reputation with investors including Justin Timberlake and the pop duo The Chainsmokers.
Users get access to a free, FDIC-backed bank account, a spending card and P2P payments platform to send and receive money instantly.
CJ MacDonald, chief executive of Step, said the company is aiming to improve the financial futures of the next generation. “Step is the only banking platform that enables teens to start building a positive credit history before they turn 18 and does not charge fees of any kind.
He has previously spoken about the importance of financial literacy for young people. “Money is just one of those things where I think the more educated and equipped you are early, the better decisions you can make down the road,” he told . “And you can also prevent yourself from making costly mistakes. I mean, the average American doesn't have $400 in emergency savings and pays $350 a year in banking fees. If we can help this next generation just ultimately be smarter and more educated as it pertains to money, I think we'll all be better off.”
Kyle Doherty, managing director at General Catalyst and Step board member, explained, “Gen Z is flocking to modern financial solutions that can be easily embedded within their digital lives and Step has a unique model for how to do this right.”
The news follows on from Stripe’s recent announcement that it plans to acquire TaxJar. The fintech, which builds software for online businesses that automates the reporting and filing of sales taxes, will most likely be integrated with Stripe’s billing services.
Currently, No terms have been disclosed but the Boston start-up had raised more than $60m from investors including Insight Partners.
Stripe chief financial officer Dhivya Suryadevara said of the move, “With TaxJar, we will help millions of internet businesses running on Stripe with their sales tax and make it easier for them to sell internationally.”