Unicorns, mythological creatures, appearing in early Mesopotamian artwork and referenced in ancient Indian and Chinese fairy tales.

In today’s world we use that term to describe a different type of powerful creature: companies that went from nothing to (at least) a one billion dollar valuation. Like the unicorns of ancient India, these contemporary creatures are bold, ambitious, and heroic.

Until about seven years ago, in the financial sector, such unicorns were nothing more than a fairy tale. The financial world, circa 2010, belonged to giants like JP Morgan, Bank of America, Allianz and more. They ruled the financial world and how people and money interacted.

Not anymore.

From Chicago to Shanghai and anywhere in between, a not-so-silent revolution is happening. Winter is coming for the incumbent financial institutions, but for the rest of us, the sun is shining brighter every day.

This is not just an idyllic image: what the new unicorns are offering us is better, faster, easier, more convenient alternatives than what the big financial corporations ever thought we, as consumers, would need.

And when it is given to us, we are adapting to it so smoothly it almost feels like it is something we have been using all our lives, for example:

  • Mobile payments at a local Walgreens store.
  • Paying with your credit card via Square at the local flea market.
  • Lending money from peers, versus banks.
  • Getting a personal loan from the comfort of our couch.
  • Getting a medical or insurance quote without ever interacting with a human being...

Many of these seamless experiences are the product of fintech - an industry that has been growing 3-4 times per year, again and again since 2010.

The industry is still growing at an unforeseen speed in the US and all over the world. In fact, among the top ten fintech unicorns, we see the majority of the growth - and market share - in Asia, not the United States.

Fintech as an industry is here to stay. Due to technological advancements, the widespread use of smartphones, improvements in network and wi-fi infrastructure, financial technologies are in an excellent position continue their growth in the next decade and chip away both market share and profits from traditional financial institutions.

One question many analysts are trying to get an answer to is what sectors within the financial industry will be most impacted by the rise of fintech unicorns. By looking at the top ten unicorns and the primary services they offer, we can see that payments, loans and insurance services form the core industries most likely to be impacted by fintech technologies.

As you go through the list you will notice that among the top ten unicorns, a disproportionate amount of companies are located in China. This may come as a surprise to many financial analysts, however, there are a few key factors that put China at the top of the food chain in terms of the financial revolution (and future potential):

With all this in mind, here are the biggest fintech companies in the world: What they do, what their plans are for the future, and how they make money.

Ant Financial

Website: www.antgroup.com

Year Founded: 2004

What they offer:

Part of the Alibaba Group, Ant Financial has several business units. One of which is Alipay, an online payment service that provides businesses and people with a secure payment channel.  It is one of the most widely used online payment methods in China.

How they make money:

Back in 2014, Alipay said they had 700 million accounts, 80 million transactions daily and a yearly purchase volume of $778 million.  They had a 49% share in the Chinese online payment services. Alipay charges a variable fee for each transaction: free for smaller transactions, up to around 1.2% for high-value transactions.  On top of that, Ant Financial also gets revenues from services that its other business units offer, such as interest from small loans provided by Ant Micro and private bank MYBank, among others.  The company has had two funding rounds, including a $4.5 billion Series B funding round led by China Construction Bank and the China Investment Corporation in 2016.

Current Valuation: $60 billion

Major investors:

  •       China Construction Bank            
  •       China Development Industrial Bank
  •       China Investment Corporation

Where they operate: Ant Financial's Alipay focuses on the online payment market in China, but it has investments in China, the United States and India.

Recent announcements: In February 2017, Ant Financial announced that they were raising money for global expansion, acquiring companies in the US and India. (Source)

Shanghai Lujiazui International Financial Asset Exchange (or Lufax)

Website: www.lu.com

Year Founded: 2011

What they offer:

Lufax is an online trading platform for financial assets and peer-to-peer loans. They attract investors with their wide range of products, liquidity options and a top-notch user experience.  The online market platform is safe, convenient and open.  

How they make money:

In 2015, Lufax recorded an eightfold increase in the volume of transactions online year over year, from their 7+ million active users.  They have a wide range of P2P-driven financial packages that individuals and businesses can take advantage of, as well as several wealth management products. Their most recent funding was led by COFCO and earned them $1.2 billion.

Current Valuation: $18.5 billion

Major investors:

  •       BlackPine Private Equity Partners
  •       China Minsheng Bank
  •       COFCO

Where they operate: Lufax is primarily an online business with users in China, Japan, Hong Kong, Taiwan, Europe, and the United States.

Recent announcements: In January 2017, the peer-to-peer lender raised $1.2 billion from investors, raising its valuation to $18.5 billion.  (Source)


Website: www.stripe.com

Year Founded: 2010

What they offer: Stripe makes it easier for stores to do business online, including assistance in managing an online business and offering an easy way to accept and ensure payments.  The company offers Radar, which blocks fraudulent payments; Stripe Atlas, which helps companies incorporate easily in the United States; Stripe Relay and API, which allow stores to easily take their products mobile; and Stripe Connect, which helps them accept payments from all over the world.

How they make money:  Stripe levies a percentage-based fee on every successful transaction, getting around 2.9% of the transaction fee plus a flat rate of 30 cents.  Since August 2010, the company has had eight funding rounds, including the two latest $100 million and $150 million funding rounds.

Current Valuation: $9.2 billion

Major investors:

  •       Google Capital
  •       Visa
  •       Sequoia Capital
  •       Several individual investors such as Peter Thiel, Elon Musk, and Elad Gil

Where they operate: The company operates primarily in the United States with users in the UK, France and the rest of Europe, as well as Australia and different Asian countries such as Japan, India, and Vietnam.

Recent announcements: In January 2017, Stripe announced that Google's Iain McDougall will be joining the company as the head of its UK operations.  The recruitment of the Google veteran is just a part of the company's recruitment binge of the tech world's biggest names, including Sarah Heck and Richard Alfonsi.  (Source)


Website: www.paytm.com

Year Founded: 2010

What they offer: The company recharges credits and payment for mobile, mobile shopping, data cards, DTH, bus tickets, and utility bills.  

How they make money:  The mobile payment company has 200 million users and processes at least 15 million orders in a month. They have had four funding rounds since January 2014, including a $680-million funding led by Alibaba.

Current Valuation: $6 billion

Major investors:

  •       Ant Financial
  •       K2 Global
  •       Mountain Capital

Where they operate: The company has customers all over India.

Recent announcements: In February 2017, the company received new funding amounting to $33 million to jump-start its digital bank services.  (Source)

Zhong An

Website: www.zhongan.com

Year Founded: 2013

What they offer: Zhong An is a property insurance vendor that sells insurance packages online. The online-only insurance company also handles claims online. They offer mobile payment, financing assurance and e-commerce to online businesses and their customers. Products include property insurance, cargo insurance, credit insurance, and liability insurance.

How they make money: A bulk of Zhong An's revenues come from insuring return deliveries for Taobao.com buyers. Other revenues come from other online insurance offerings. In June 2015, the company secured $934 million from three investors.

Current Valuation: $8 billion

Major investors:

  •       CDH Investments            
  •       CICC
  •       Morgan Stanley

Where they operate:  The company operates primarily in China.

Recent announcements: In December 2016, Zhong An pulled the plug on its planned US IPO and instead told its lawyers to focus on an IPO in China. (Source)


Website: www.qufenqi.com

Year Founded: 2014

What they offer: Qufenqi is an electronics seller that allows customers to pay in installments.

How they make money: Apart from revenues they get from selling electronics, they also get higher margins for their installment plans. Funding rounds include a (JPY )three billion series F and a $200 million Series E led by Ant Financial.

Current Valuation: $5.9 billion

Major investors:

  •       Ant Financial
  •       Beijing Phoenix Wealth Holding Group
  •       Kunlun

Where they operate: Qufenqi caters to Chinese consumers.

Recent announcements: Less than a year since its launching, Qufenqi has raised a lot of money from its Series E funding. In July 2016, the company raised another $449 million pre-IPO.


Website: www.sofi.com

Year Founded: 2011

What they offer: The finance company has several lending and wealth management offerings.  They target professionals and individuals and give them access to fixed-rate or variable-rate loans, including personal loans, MBA loans, parent loans, mortgage refinancing, and others.

How they make money: Social Finance, or SoFi, has lent consumers at least $12 billion since it launched. Since September 2011, the company has had 11 funding rounds, the biggest of which is the $1 billion Series E funding led by Softbank.

Current Valuation: $4 billion

Major investors:

  •       Softbank
  •       Silver Lake Partners
  •       Third Point Ventures

Where they operate: While headquartered in San Francisco, California, the company’s lenders come from all over the United States.

Recent announcements: In February 2017, SoFi added another $500 million in funding from investors led by Silver Lake Partners. (Source)

Credit Karma

Website: www.creditkarma.com

Year Founded: 2007

What they offer: A personal finance company that aims to help individuals manage their financials. They also have a tax preparation service that includes free electronic filing.  The company offers tools that help users get personalized recommendations and assistance on getting the best deals on a loan, savings, or credit monitoring.

How they make money:  Credit Karma offers tools that are "always free" - for instance, allowing you to get your credit score without having to pay for the information.  However, they earn money from the ads that they include in their personal recommendations.  This is not to say that you get to see a ton of advertising as you understand it in the traditional sense - instead they come up with personal recommendations where they recommend certain advertising partners that you can work with to refinance your loan or help you with your credit card problems.  The company has had six funding rounds since October 2008, the biggest of which had them securing $175 million in 2015.

Current Valuation: $3.5 billion

Major investors:

  •       CapitalG
  •       Ribbit Capital
  •       Susquehanna Growth Equity

Where they operate: With three US locations in Los Angeles, California, Charlotte, North Carolina, and San Francisco, California, the company offers their services mainly to users all over the United States.

Recent announcements: Credit Karma was able to secure a $175 million funding from Tiger Global Management, Viking Global Investors LP, and Valinor Management in June 2015, raising its total funding to more than $368 million.  The company is on track to launch its IPO sometime soon. (Source)

Oscar Health

Website: www.hioscar.com

Year Founded: 2013

What they offer: Oscar Health focuses on using technology, data and design to help create meaningful and wonderful consumer experience in healthcare.

How they make money:  The insurance company has around 145,000 customers, earning an average of $5,000 per customer.  They have had six funding rounds since 2014, including the $145 million Series C funding led by Founders Fund and $400 million private equity led by Fidelity Investments.

Current Valuation: $2.7 billion

Major investors:

  •       Fidelity Investments
  •       Founders Fund
  •       Formation 8

Where they operate: The company has customers in New York, Texas, and California.

Recent announcements: Oscar Health Insurance, in February 2016, secured $400 million from investors led by Fidelity, a mutual fund giant that is known to be a very conservative investor.  The funding would help Oscar Health target the biggest markets in the United States, or those that comprise 20% of the country's GDP. (Source)


Website: www.mozido.com

Year Founded: 2008

What they offer: Headquartered in Austin, Texas, Mozido is a trusted payment solutions and digital commerce service provider.  They offer mobile payment, loyalty programs, financial services, cloud-based solutions, and mobile offers to clients from all over the world.  These solutions are interoperable using any wireless device and across all wireless carriers.  Their main target customers are non-banking users.

How they make money:  The company delivers online payment services, and their solutions are accessible to more than 6 billion mobile phones, with particular focus on users that have no bank accounts.  That particular sector involves more than 2 billion users.  The company has had four funding rounds since 2011, including securing $185 million from four investors in 2014.

Current Valuation: $2.4 billion

Major investors:

  •       H.R.H. Sheikh Nahyan
  •       MasterCard
  •       Tiger Management Corporation

Where they operate: Mozido has physical offices in the United States, India, China, South Korea, UAE, Africa, Mexico, Jamaica, and Germany, among others.

Recent announcements: In October 2014, the company secured $185 million Series B funding from a group of investors that included UAE Sheikh Nahyan bin Mubarak Al Nahyan, MasterCard, Wellington Management Company, and Tiger Management, pushing its valuation to $2.4 billion. (Source)


As you can see, there are different fintech companies from different parts of the world, and most of them are outside the United States. They offer a wide range of services that help provide businesses other options aside from going directly to a local bank or to conventional investors.

The most notable trend in fintech unicorns is that China seems to be emerging as a breeding ground for these companies. Lists of the biggest fintech companies have always included Chinese companies, but Chinese companies are now dominating the industry with the top three companies on this list being from China.

Moreover, these fintech unicorns are significant because they not only provide an alternative to banks, but they also fill a need: they help customers and businesses fight the outdated technology that plagues bigger banks and more established financial firms. They also allow users to take on the new regulations that they have to contend with after the 2008 financial crisis. Some of these unicorns (like Paytm and Mozido) specifically cater to target audiences that have never dealt with a traditional banking institution.

For instance, with Mozido, buyers who do not have bank accounts would still be able to pay for their purchases online.  Customers are happy because of the convenience, while the businesses are happy because of the sale that they would have otherwise lost if they only offered payment through credit cards.  On the other hand, people who would otherwise not have gotten a loan are now able to with Sofi’s packages.  Or those who are having a problem managing or understanding their finances can get help from Credit Karma.

Businesses are also getting help by making it easier to accept online payments, especially businesses in China where fraud might be a far bigger problem than it is in the United States.  However, more than the convenience and the choices, fintech companies also offer cheaper services.  For instance, Stripe only charges a minimal 2.9% on top of the flat 30 cent flat fee for every transaction it processes, while Alipay even foregoes the transaction fees for smaller transactions.  Meanwhile, Zhong An protects both customers and businesses with its return delivery insurance.

In short, there is a big need in the space, and fintech companies are filling these gaps in a quick and agile manner that banks and traditional financial firms can only dream of. With services that are cheaper and easier to use than what are currently available, why wouldn't consumers go in this direction?