Waves of innovation power Fintech’s future. How do you stay ahead?

Innovation is global. This is famous.

But what is not understood is how the best ideas appear across the globe in waves. This is the supply chain of innovation.

Fintech is at the very beginning of this movement. To seize the opportunity it is necessary to understand how it manifests itself and prepare for the next wave.

Let’s start with the first one by examining three examples.

Example 1: worldwide rise of neobanks

A series of next-gen digital banks began to reach significant size and valuation in Europe in mid-2010s. These include companies such as N26, Revolut and Monzo. * They took an ecosystem approach, first getting customers with a bank account and then offering them a range of products and services. Around the same time, Nubank was rapidly scaling up in Brazil offering a credit-driven model (similar to Capital One

COF
). They later added bank account services then with wealth management today. In the U.S., off the tails of the rise of digital banking elsewhere, Chime (a portfolio company of the fund I work with) and others began to scale. There was a different, debt-based model.

This progress affected emerging players in other markets. The business models that followed featured a mix of the successful players everywhere. In Brazil, a combination of trading and credit exchange models is led by the fast-growing digital bank, and in Mexico a range of players are emerging such as Klar (credit-driven) and Albo or Cuenca (account-driven).

Today, players around the world use several business models, some of which are more robust and sustainable than others.

Example 2: buy now pay later

Similarly, next generation “buy now, pay later” (“BNPL”) models are on a global scale in a wave. Affirm, which recently went public over $ 20b, was launched in the US in 2013. Over time, other players began to scale like FinAccel (Singapore, 2015, Cathay Innovation portfolio company) Afterpay (Australia , 2017), Zest Money (India, 2015), Addi (Colombia, 2018) and most recently Alma (France, 2018, also her Cathay Bag Company).

Please see below the map below for an illustration of what it looks like:

These models also scale in different ways. In emerging markets, where there is less online streaming, players are building more of an omni channel approach to cover physical stores with similar offerings.

As the market is more undeveloped, BNPL is expanding to offer a range of solutions, covering other neobank-like products, including bank accounts.

We’re also seeing nearby players looking to offer BNPL as part of their own offering for the same reason (as Grab, the recently announced Superapp sharing division in Southeast Asia, as e-commerce players are just across many markets). This symbolizes the full stack in emerging beginner stages.

I expect to see a cambrian-like explosion of buy-now-pay-later players around the world. Here again, different business models scale and thrive in different ecosystems.

Example 3: Payment Superapps

Active fintech wave superapps are scaling the world today. Launched in China, Superapps will expand their core service with unified payment and identity offer. Through this, they can offer a range of products and services directly in the app. WeChat, from Tencent, started as a social network (similar to Whatsapp in the US), but now offers a diverse app store: today, users can purchase products, access telemedicine and the Get their news completely in one app.

This trend is scaling across the globe, with many beginners around the world looking to change their business models towards becoming a Superapp. And of course, the start-up offer isn’t just a chat. In Southeast Asia, players like Go-Jek and Grab are evolving from a trip-sharing model to a decline in financial services and with it, powering a range of alternatives including food deliveries, massages, visits to doctors, etc. In Latin America, Cabify and Rappi are emerging from the on-demand economy. Elsewhere, as in the case of PayTM in India or Toss in South Korea, the original product was in financial services.

In particular, many of these global innovations are influenced by the original. Consider the impact of Go-Jek on Uber

UBER
and pushing them into financial services and food delivery for example.

This is not an isolated example, or unique to fintech

The three examples above are just a few of many. The best ideas will follow the world and will be reproduced everywhere.

For example, just to consumer insurtech players like Lemonade (tenants), Hippo (home) and Root (car) built early in the US but similar models are scaling up all over the world.

Revenue-based finance – an alternative to venture capital – is becoming a powerful force. Many key players, such as Clearbanc in Toronto, Lighter Capital in Seattle, scale outside of Silicon Valley.

Fintech’s infrastructure, including models like Plaid, is growing globally.

And of course, these trends are not just fintech, but different models, such as social trading, cycling sharing, and so on.

Why this is important:

Of course, it is impossible to see the future. But as William Gibson once said: “The future is already here. It is not yet fairly circulated. ”

For founders, investors and ecosystem builders, identifying these trends early offers a window into the models that could emerge locally and the opportunity to find a chair that will shape it. .

The success of early players in any particular move offers a halo to the wider space. The success of Nubank, Chime and others builds on the wider neobank space, as Affirm’s IPO in buy-now pays off later.

While frontiers seem to be rising all over the world, success in innovation requires a global perspective now more than ever.