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40 Fintechs and 3 Trends Investors Are Watching

In H1 2022, fintech encountered turbulence. Funding dollars dropped, valuations fell and layoffs followed. Here in the Nordics and Baltics, the fintech birthrate sits at its lowest level in 18 years.

In contrast to this summer’s soaring temperatures, some are wondering if a fintech winter is already underway.

To better understand the state of fintech, Lighthouse FINITIV contacted 11 investors from our Investor Circle. Launched in 2021, Investor Circle is a network of 50+ Nordic and Baltic VCs who share our commitment to strengthening the region’s tech ecosystem. Investors we interviewed acknowledged the difficulties but focused on three reasons for optimism.

Layoffs can raise the talent caliber

“During downturns, fewer companies get funded. Hence those who do might find themselves in a stronger position with less competition,” said Erik Lindblad, a Partner at Stockholm-based Zenith Venture Capital. “Simultaneously, layoffs flood the ecosystem with talent. This means that surviving fintechs can raise their talent caliber significantly. We’re seeing this happen today.”

Other investors agree that tough times create more resilient companies–if founders can rise to the occasion. “Incoming employees and venture investors both expect more from downturn founders,” says Dmitrij Sosunov, a Partner at Vilnius-based “Both look for signs that a team can weather the storms ahead.” Startups with credible brands and low burn position themselves to capitalize on the talent opportunity.

Bank-fintech partnerships can flourish

Many investors think banks will outsource more jobs to startups during tough times. “Fintech was born from the last economic downturn precisely because downturns make problems obvious,” says Gwen Sandberg, an Invesment Manager at Helsinki-based Inventure. “The best fintechs I see are collaborating with big companies like banks to verify real problems and scale real solutions.” Investors encourage startups to look for evidence of real problem-solving in the form of early revenue. Banks are especially happy to share the cost of problem-solving with startups when the resulting partnership helps both sides strengthen end-customer relationships.

The B2B / small merchant opportunity

During downturns, B2B fintech businesses often benefit from increased customer urgency. “The opportunity for B2B fintech is still largely untapped, there’s complexity and long sales cycles, yet by us being embedded in the industry we can often build stronger commercial conviction early compared to B2C,” says Oliver Sjöstedt, a Principal at Upfin.VC, a fintech-focused investor launched in Copenhagen this year. “We’re following several B2B megatrends now, including B2B payments, embedded finance and B2B blockchain.”

Within B2B, some investors see specific opportunities in the small merchant space. Many of Europe’s 22.6 million SMEs have low technology penetration; for instance, just 30% of SMEs have a payment system integrated to a digital POS, according to research done by Invenio Growth Consulting. These merchants may soon be faced with a decision to adapt or die. Investors are betting that fintechs focused on small merchants will soon find a host of eager buyers. “There has never been a better time to launch a mobile POS solution,” said Camille Zivré, a seed investor at byFounders. “This technology helps smaller merchants accept payments without investing in expensive hardware that gets outdated quickly.” In June, byFounders led a 4m EUR seed round for Vibrant, the Danish mobile POS solution that won the Lighthouse FINITIV Program in May.

We spoke with the following investors

  • Zenith Venture Capital
  • Luminar
  • Wellstreet
  • Vidici
  • Per Bjorklund
  • Hanna Raftell
  • Firstpick
  • Practica
  • Upfin
  • Byfounders
  • Inventure

Nordic & Baltic startups these investors are watching

  1. Gigapay: payment platform for creators, freelancers and gig workers
  2. Focalpay: Headless checkout with any payment method
  3. Baase: banking-as-a-service provider
  4. Avantir: Platform for companies to manage internal finances
  5. Acuminor: 💡🏠 identify and manage risks related to AML, CTF and sanctions
  6. Minna Technologies: subscription management services for banks
  7. Aura Cloud: banking-as-a-service provider
  8. Treyd: BNPL for trade financing
  9. Esgaia: ESG engagement tracking for investors
  10. Future of Retail: faster payments to suppliers, less inventory for retailers
  11. Texelio: refining financial market news data at scale
  12. Hypido: lender for cross-border home buyers (HQ in Spain)
  13. Everything: social payments (HQ in London)
  14. ARYZE: Asset tokenization, digital cash, programmable money
  15. Vibrant: 💡🏠 mobile POS solution
  16. Januar: B2B banking infrastructure for digital assets.
  17. Likvido: B2B platform for managing internal finances
  18. Valerian:  revenue-based funding for recurring costs
  19. Northstake: crypto solutions for institutions
  20. Asset gift: send crypto gifts to anyone
  21. Grandhood: B2B digital pension solution
  22. ZTLment: regulated, compliant, programable money
  23. All Gravy: on-demand earned wage access
  24. BNPL for merchants
  25. 💡🏠 Omni-channel, compliant wealth management platform
  26. Celsia: EU Taxonomy scoring
  27. ReceiptHero: 💡🏠 digital receipts and customer loyalty solutions
  28. ZirooPay: “internet-free” mobile payment platform for emerging market merchants
  29. Enable Banking: Open banking SDK
  30. Phaver: social DeFi platform
  31. Kernolab: 💡🏠 banking-as-a-Service and embedded finance solutions
  32. Inrento: rental properties investment platform
  33. kevin.: 💡🏠 open banking payments for online & in-store sales
  34. Heavy Finance: a borderless lending marketplace, where farmers meet investors
  35. Watalook: fintech-enabled beauty services booking app
  36. Okredo: open data platform for companies’ data and beyond
  37. Ondato: 💡🏠 KYC Compliance
  38. H-finance: compliant infrastructure enabling FIs / fintechs to use digital assets
  39. Tipit: 💡🏠 cashless tipping straight into waiter’s and bartender’s bank accounts
  40. Jeff-app: financial broker for Asia’s 1 billion unbanked

💡🏠 = Lighthouse FINITIV alumni

Mastercard Lighthouse FINITIV is a search and partnership program focused on finding the next fintech unicorn. Our goal is to strengthen the financial services ecosystem by pairing the energy and innovation of promising Nordic & Baltic fintechs with stability and distribution at large banks.

Fintechs can apply to join the program until Friday, 12 August 2022.

Investors can apply to join the Mastercard Lighthouse Investor Circle and receive invitations to our investor demo days and invitation-only events.

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