Two Aussie companies in list of top 50 global fintech firms

24 October 2018 Authored by Consultancy.com.au

AfterPay Touch and Airwallex have been named in the top 50 global fintech companies by the global consulting firm KPMG in conjunction with Australian fintech venture capital investment firm H2 Ventures. Five other Australian and one New Zealand startup are presented in the top 100, with Asia Pacific representing over a third of the index. 

Amongst the world leaders of next generation financial technology companies are two Australian features. Australia has been the focus in recent history of a concerted tech push throughout the Asia Pacific, with Sydney and Melbourne battling it out with Singapore and Hong Kong to become the tech-hub of the Asian region. 

Singapore has a huge advantage when it comes to fintech with the government developing creative regulations which promote digital innovation. Whilst this creates an environment which actively helps encourage startups and has produced a dynamic fintech market – with one Singaporese fintech firm in the top 10 – Greater China and Australia are keeping up the competition. 

And that competition is expected to be worth upwards of US$70 billion in the Asia Pacific alone within two years according to a recent analysis from Frost & Sullivan. Growing at an annual compound rate of 72.5% over the five years to 2020, startups are vying to get a piece of the pie from all over the region. 

Top Fintech firms around the globe, KPMG 2018

In the investment regard, Greater China is flat out dominating. With the total value of deals made last year nearing US$10 billion throughout the Asia Pacific, over $9 billion went to Chinese firms. In comparison, the next largest sum was in India with $339 million. Australia & New Zealand drew in a combined $107 million of financing over the same time period. 

The Founding Partner at H2 Ventures, Ben Heap said that overall, venture capital backing of fintech companies continues to accelerate. “The companies on the 2018 list have raised over $52 billion in venture capital, more than double the total of last year’s list, and more than $27 billion of capital in the past 12 months, a 366 percent increase over last year."

“In terms of major funding rounds, 26 companies on the Fintech100 have each raised $100 million in the last 12 months. The first four companies in the Leading 50 have all raised over $1 billion in the last 12 months alone,” Heap added.

The list itself is comprised of 100 companies representing over 36 countries and together those featured have raised over $50 billion in capital. The majority hail from the US (18), followed by the UK (12) and China (10). Australia does not follow far behind having over seven entries on the list and New Zealand gets a run on the board with one company present.

Fintech sectorial breakup according to KPMG 2018

“Against this backdrop – and with US and Chinese fintechs attracting massive interest, it is encouraging to see Australian companies holding their own and competing on the global stage,” said Heap. 

Australia’s two major fintech success stories this year both originate from Melbourne – a potential blow to the Sydney tech startup scene – and have offices in the UK, Europe, Singapore and China. Ian Pollari, the Global Co-Lead of KPMG Fintech, who is based out of Sydney himself, congratulated the two companies on their achievements.  

“Australia’s fintech ecosystem has once again demonstrated its global relevance, with a strong showing on the 2018 Fintech100. Both Afterpay and Airwallex show that local fintechs with global ambitions are able to attract customers to scale beyond our shores and raise capital from international investors,” he said.

AfterPay is an online platform which provides online shoppers with an option to spread purchases across four equal instalments and owns more than 10% of the total online retailing in Australia. AirWallex facilitates cross-boarder transactions by fixing exchange rates to reduce currency volatility. According to KPMG, their US$80 million Series B injection this year is the second largest funding round in Australian history. 

“Globally, payments and lending continue to be the dominant sectors, with wealth management taking off, featuring 14 companies on the list. Insurtech remains strong with 12 companies. Notable this year is the emergence of neo-banks, with 10 on the list – which is the beginning of what we believe will be accelerated growth of digital banking models globally and in Australia,” Pollari concluded.

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