HOW TO GO FROM FINTECH STARTUP TO UNICORN

a unicorn startup is a private company valued at over 1 billion dollars now according to CB insights as of May 2023 there are over 1 200 unicorns around the world even beyond that there are now variations of the Unicorn category called Deca currents which are companies valued at over 10 billion dollars and Hector coins which are those companies valued over 100 billion dollars the initial term unicorn was first coined by a venture capitalist called Aileen Lee in the 2013 TechCrunch article where at the time she suggested that companies that were able to hit the significant Milestone of a billion dollar valuation like the Facebooks and Googles of the world were as rare as unicorn however today unicorns are not as rare as they were in 2013 and even in the fintech space there are over 334 unicorns according to fintech lab but as commonplace as unicorns are in our world today it still takes a tremendous amount of effort and work to achieve this feat so in this video I'm going to chat about the 10 stages that a fintech usually goes through from the initial startup stage all the way towards achieving unicorn status and will highlight some popular fintech unicorns in each step of the journey if that sounds interesting to you then let's jump in foreign [Music] welcome back to the channel my name is Jeremy and if you're new here and haven't yet subscribed please consider doing so because on this channel I speak about fintech digital transformation personal and career development now if you're anything like me that I'm sure you've heard or wondered about how those small fintech startups that appear on the scene suddenly Skyrocket to the ranks of some of the most valued companies in the world how do they transform from humble beginnings to become the mythical creatures of the business world called unicorn is there a formula that they follow and is this possible for any other fintech startup with the same dreams goals and Ambitions to emulate thankfully with so many unicorn Founders and investors sharing their Journeys it's not possible to deduce the general steps that these inspiring tech companies go through to achieve unicorn status so with that said let's explore the various stages starting with the first step which is ideation and conceptualization it all begins with spark of innovation where entrepreneurs identify gaps in the financial landscape and develop groundbreaking ideas they go through meticulous research and brainstorming and they conceptualize a unique product or service with the potential to improve an inefficiency in an existing service or address a specific pain point or Gap identified in the financial services industry Brian Armstrong who is the co-founder and CEO of coinbase came up with the idea for his fintech unicorn company after discovering Bitcoin in 2010. he observed the challenges of acquiring and storing digital assets and was inspired to bridge the gap between traditional finance and cryptocurrencies he envisioned a user-friendly and secure platform that would simplify buying selling and storing digital assets and in 2012 he co-founded coinbase which became a leading cryptocurrency exchange and just five years after its Inception the company reached a billion dollar valuation in 2017. again it all started with an idea and the conception realization of the product or service step two is market research and validation with their Concept in hand or in mind fintech startups embark on an in-depth market research Journey they validate their assumptions understand the target audience and analyze the competitive landscape to ensure their idea has Market potential as vusi likes to put it you need to find a gap in the market but also make sure there's a market in the Gap Nick steronski the founder of the fintech Unicorn revolute notice the high fees and inconvenience associated with traditional banking services especially when it came to International transactions he conducted thorough market research examining the pain points of individuals and businesses when it came to cross-border payments currency exchange and Personal Finance Management steronski validated his ideas by surveying potential users conducting interviews and analyzing existing Solutions in the market he recognized the demand for a streamlined and cost-effective digital banking experience tailored to meet the needs of a global and Mobile customer base revolut was born in 2015 offering Fair exchange rates low-cost International money transfers and Innovative financial management tools revolute gained traction by focusing on user-centric features and continuous improvements based on feedback and achieved unicorn status in 2018 showcasing the success of staronski's research driven approach step 3 is product development now with a validated Concept in place fintech startups move into the product development phase The Talented engineers and designers collaborate to build a minimum viable product or MVP that showcases the core features and functionalities of their solution and communicate their Vision in such a manner that it resonates with potential customers iterative development user feedback and rigorous testing lead to an Innovative and user-friendly product tripe the fintech Unicorn co-founded by Patrick and John Collison achieved its unicorn status by leveraging a uniquely differentiated product development approach by focusing on developer-centric Solutions Stripes simplified and streamlined online payment processing for businesses their powerful set of apis and tools made it easier for developers to integrate payments seamlessly reducing complexity and effort this approach resonated with developers and businesses driving adoption and propelling Stripes growth to unicorn status with a valuation exceeding a billion dollars establishing it as a leader in the fintech industry step 4 is seed funding and early stage investment now to bring the product to life fintech startups seek early stage funding they either bootstrap or pitch their idea to Angel Investors Venture Capital firms or participate in incubator programs this initial funding helps cover development costs build the team and prepare for Market entries now obviously obtaining early stage funding for a fintech startups can be challenging due to several factors one challenge is the high level of competition in the fintech space because investors receive numerous funding requests each day the most successful fintech startups navigate this challenge by showcasing a strong value proposition differentiating themselves from competitors and highlighting their Market potential additionally successful fintech startups emphasize the expertise of their founding team demonstrates early traction or Revenue generation and develop a compelling business plan that addresses potential investor concern such as Regulatory Compliance and scalability and certain unicorns have employed very innovative ways of attracting that initial funding monzo formerly known as Mondo is a fintech unicorn that offers digital backing services and achieved early stage funding Success Through a highly successful crowdfunding campaign in 2015. the campaign aimed to raise 1 million pounds from the public and potential customers the campaign gained massive attention and generated significant interest and monzo surpassed its Target in just 96 seconds securing over a million pounds in under 24 hours this early stage funding played a significant role in positioning monzo as a disruptive force in the banking industry and also help monzo establish a loyal and engaged customer base that was emotionally invested in the company's success step 5 is product launch and user acquisition the much anticipated moment arrives the fintech startup officially launches its products through strategic marketing campaigns targeted advertising and Word of Mouth they attract early adopters and the very first users having a compelling value for position and seamless user experience are crucial for early adoption and traction square a fintech unicorn founded by Jack Dorsey and Jim McKelvey achieved Success Through a unique approach to its initial product launch and user acquisition the company's disruptive Hardware Innovation the Square Reader allows small businesses to accept card payments easily and affordably square took a Grassroots approach Distributing the square reader for free at local events and engaging directly with small business owners this strategy resonated with its target market rapidly driving user adoption and establishing a strong Market presence Square's distinctive product launch and user acquisition tactics play their pivotal role in its success propelling it towards unicorn status and cementing its position as a fintech leader step 6 is early growth and iteration with an initial user base fintech startups focus on scaling operations and driving growth they optimize their business model fine-tuned marketing strategies and expand their customer acquisition channels strategic Partnerships and collaborations often play a vital role in accelerating growth the iterative development Cycles allow them to address pain points add new features and enhance overall user experiences continuous innovation and agile adaptation are key to sustaining growth in this phase PTM a fintech unicorn based in India achieved a billion dollar valuation and unicorn status by excelling and optimizing iterating and expanding through strategic Partnerships and collaborations the Company formed a pivotal partnership with alibaba's ants group leveraging their expertise and Technology transfers to accelerate growth paytm also collaborated with banks merchants and government initiatives to expand its services transforming into a comprehensive digital Financial platform and playing a crucial role in India's digital payments drive now these strategic Partnerships and collaborations enabled paytm to scale optimize it offering Drive adoption and establish itself as one of Asia's most valuable unicorns step 7 are the series ABC funding rounds as fintech startups demonstrate traction and potential they seek additional funding through series A B and C funding rounds Venture Capital firms and institutional investors inject Capital into the company enabling further expansion product enhancements and talent acquisition with each funding Milestone investor confidence grows validating the vision of the startup and propelling them closer to unicorn status SuperCash on African printing startup achieved unicorn status through a series of successful funding rounds its series ABC route provided crucial Investments That propelled its growth and valuation the 6 million dollars raised in the series a round allowed chipper cash to expand its operations and scale its user base the 30 million dollars from the series B round facilitated further Market expansion and the introduction of new financial services and finally the series C round raising 100 million dollars played a pivotal role in accelerating cheaper Cash's growth entering new markets and solidifying its unicorn status these running rounds provided a necessary Capital to enhance its product offering acquire strategic Partnerships and establish triple cash as a leading fintech unicorn in Africa step 8 is international expansion with a solid foundation and resources in place fintech startups expand into new geographic regions targeting on top markets International expansion plays a key role in a fintech startup Journey towards achieving unicorn status by expanding into new markets fintech startups can tap into larger customer bases unlock new revenue streams and gain a competitive Advantage International expansion allows startups to diversify their risk and reduce use their Reliance on a single Market making them more resilient to economic fluctuations it also provides opportunities for strategic Partnerships and collaborations with local players enabling access to local knowledge regulatory expertise and distribution networks additionally expanding internationally Health fintech startups attract larger Investments and gain recognition on a global scale which can significantly contribute to reaching the coveted unicorn valuation new bank a fintech unicorn based in Brazil provides an example of a company whose International expansion significantly contributed to its billion dollar valuation newbank initially started as a digital only credit card issuer in Brazil in 2013. this caused the fintech to gain popularity and disrupted the traditional banking landscape in the country nubank recognized the potential for growth Beyond its local borders and expanded operations into Mexico successfully tapping into a new market new bank's success in Mexico propelled its valuation and its International expansion not only increased its customer base but also attracted significant investment from Global Investors in 2021 the company raised 400 million dollars which valued the startup at 25 billion dollars and solidified its position as a leading fintech player in Brazil and Beyond step 9 achieving scale and revenue growth as International expansion unfolds fintech startups tap into larger customer bases diversify revenue streams and strengthen their financial position they benefit from the network effect as their products gain traction and attract a growing number of users across different countries at the same time they Foster a strong company culture attracting and retaining top talent and cultivating Innovation internally this rapid expansion and revenue growth moves them all the closer to achieving unicorn status brex is a fintech unicorn founded in 2017 that provides corporate credit cards and Financial Solutions tailored specifically for startups and small businesses brexit's success can be attributed to its ability to scale its operations efficiently demonstrating impressive Revenue growth and cultivating a strong company Culture by streamlining the credit card application process and utilizing Innovative technology brex rapidly expanded its customer base and achieved significant scale moreover brexit's emphasis on building a positive work environment fostering Innovation and nurturing employee growth helped to attract top talents and establish a strong brand reputation these factors combine propelled bricks towards unicorn status and finally the magic moment arrives reaching unicorn valuation as the fintech startup achieves extraordinary success surpassing a billion dollar valuation it attains the prestigious status of a unicorn this Milestone reflects the company's market dominance disruptive innovation and potential to reshape the financial landscape and there you have it friends the remarkable Journey from a fintech startup to a unicorn each step requires perseverance Innovation and strategic decision making but with the right idea a talented team and a bit of luck dreams can become a reality in the world of fintech I hope you found this video valuable and if you did remember to hit the like button and leave me a comment have an amazing week and I'll see you in the next video cheers guys [Music]

Channel: Jeremy Quainoo

Views: 1,377

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Id: eKNhAhxZhT8

Length: 14min 49sec (889 seconds)

Published: Mon May 29 2023