Fintech, Stripe announced it has raised about $600 million as the company provides the online infrastructure for financial and payment services which gets a big boost from the Coronavirus pandemic.
One aspect that Fintech companies excelled the most is by pushing more digitalization in their financial service rendering. The pandemic which had prompted numerous people to stay indoor had in turn accelerated the need for people to transact online because social-distancing as well as complete lock down of many cities in some countries around the world.
Meanwhile one thing for certain is that this trend of transaction might never go away anytime soon even right when the pandemic gets under the grips of humanity.
“This is a one-way street,” said QED Investors founder Nigel Morris. Stripe whose primary service is allowing companies bill their customers directly online and then allow people make payment had been seeing the good sides of investors as the company was able to raise about $250 million in a Series G round back in September. The latest is an extension of that round and the company is now valued at $36 billion, it said.
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A company which started as of last year which was able to raise about $20 Million in funding late March was Fast which offer an one-click check-out service to customers. The funding round was led by Stripe and according to the founder of the company Domm Holland made it known he started the company because he saw his wife’s grandmother struggling to order groceries online because she forgot her password.
Another company is Finix which basically help companies as well as online platforms add up payment options was able to raise $35 million back in February and another $10 million in March.
Earlier this month, SoFi, an online personal finance company, said it signed an agreement to buy Galileo Financial Technologies, a financial service and payments platform company for $1.2 billion. As some tech start-ups lay off workers, fintech executives say they are snapping up talent.
“For the people that have a strong balance sheet and many years of runway, this is a huge opportunity,” said Mark Goldberg, partner at Index Ventures, which invested in Fast. He has told the company to “go hire amazing people.”
Another company that had been successful in this run is HackerRank which is an online service whereby companies can skill-test their software developers’ coding capabilities made it known that it’s fintech customers uses its assessment platform about 40% of the time in the first three months of this year while the usage of the service by other computer software industry and industry was down to 35% and 39%.
Despite some of the high-profile investment deals in fintech infrastructure, Goldberg says the coronavirus pandemic-induced recession will result in a “healthy pruning” of companies in fintech.
“For us to invest in something, it’s going to have to be really special,” said QED’s Morris. “But there are really special things out there.”
But the landscape is clear showing that online businesses especially Fintech benefited much during the pandemic rather than brick and mortar companies as people needed to stay indoor but performing transactions and making purchases.