Financial technology startups are growing in big numbers, and it’s good news for companies that provide services to the nascent firms.
Hot off its massive $230 million Series A funding led by Insight Partners and DST Global, London-based Checkout.com has emerged as a key partner to more than 100 FinTech startups across Europe. The company has reported a significant jump in revenue from last year, growing 60% to $74 million.
Growth has taken its toll on the bottom-line, though. Checkout.com reports that profits have dipped 64% to $2.3 million. It’s been worth it, according to CEO Guillaume Pousaz.
“We’ve always had a very strong foothold into fintech,” Pousaz said. “There is a good trend for us. Fintechs are growing globally and we have a very big fintech portfolio.”
Checkout.com’s growth is slated to continue well into next year. It expects to grow its headcount from 300 to 550 by the end of 2019, with a target of 1,000 employees by close of 2020.
The company has become a favorite for FinTech startups due to its baked-in fraud protection, extensive selection of payment methods (including PayPal, ApplePay, and other ewallet solutions), and processing more than 150 different currencies.
Checkout.com’s focus on easing cross-border payments has made it particularly valuable to some FinTech startups. Companies like TransferWire, which operate to smooth out typically thorny and costly wire transfers have made smart moves to partner with them.
Despite an increasingly crowded market for payment processors, startups in a variety of sectors have gravitated toward Checkout.com’s services, including food delivery companies like Deliveroo and gyms like Virgin Active. Even with fierce competition, there’s money to be made, with chief rival, publicly-traded Adyen, increasing its share value on the Amsterdam stock exchange 70% in the last year.
The FinTech bubble hasn’t burst, and it shows no sign of slowing. Digital banking provider Revolut recently announced expansion plans that will see it grow from 1,500 employees to 5,000, with new operations in 24 territories.
A big part of the change is generational culture. Millennials have been disproportionately hurt by the 2008 financial collapse, which has negatively impacted their trust in established institutions. That has led them into the arms of fintech startups, leaving the last hurdle for these up-and-comers regulatory hurdles that can make or break these growing businesses.