Home Feature A Year In Review: A Look At The Southeast’s FinTech Scene

A Year In Review: A Look At The Southeast’s FinTech Scene

by hypepotamus

It was quite the year for fintechs around the country.

It would be easy to just talk about the roller coaster ride of the cryptocurrency side of the industry. While the beginning of the year was filled with promise for what crypto might be able to do during times of economic uncertainty, the last few months have been marked with horror stories of crypto market crashes and the fallout from FTX’s fall.

On a national level, FinTechs saw a general decrease in funding year-over-year. That wasn’t much of a surprise, given the fact that 2021 saw a record $132 billion in venture funding pour into the sector. This year, facing rocky financial markets and high inflation, many notable international fintechs like Plaid and Klarna made headlines for record layoffs and steep dips in valuations.

 

How are Southeast Fintechs Feeling?

Despite the challenges, local FinTechs are ready to build. That is particularly true for startups in the alternative investment, banking-as-a-service, and lending sectors. 

Georgia alone is home to close to 200 private fintech startups looking to change payments, investing, lending, and banking. 

We asked several startup founders how business went over the last year to get a sense of the FinTech landscape right now. Momnt, a growth-stage Atlanta company focused on embedded finance and lending options, saw significant growth on many levels of their business over the course of 2022. 

The startup graduated from ATDC and closed a $9.5 million Series B from investors Yamaha Motor Ventures and Laboratory Silicon Valley

“The fintech space has seen a lot of high-burn companies flame out and [that] created great opportunities from a human capital standpoint. We expect to see investors trend toward businesses that operate at or near profitable levels versus blowout spending as we’ve seen in the past. While the boom-valuation days may be over, the shift back to quality is great for both the consumer and long-term industry evolution,” said Barclay Keith, CEO and co-founder of Momnt. 

It was also a big year for Charityvest, a venture-backed startup changing the way individuals think about donations and giving back. Despite uncertain market conditions, Charityvest saw a substantial increase in contribution levels year-over-year. 

From our conversations, it seems like many Fintechs are thinking about how to creatively expand their influence in a noisier world where traditional marketing is less effective,” Charityvest’s Stephen Kump told Hypepotamus. “Learning from our own experiences, we recently launched a feature and campaign inviting our users to set a percentage of income goal for their charitable giving and share it publicly with their friends/community. It was a way for our users to express their values and [it] helps us grow our influence.” 

 

 

Trends to Expect In 2023

Barclay Keith over at Momnt said he expects embedded finance options to continue to be a big FinTech trend moving into 2023, adding that there is a “strong alignment of incentives between all stakeholders when real-time financial services are embedded into the consumer’s purchasing process….By weaving the financial services into the transaction, the consumer is more likely not only to get what they really want but also to consume the financial service in real time. The acquisition cost is substantially lower versus direct-to-consumer models while also giving the consumer more choice and control.”

That could mean big things not only for Momnt, but also for startups like Verdata and others rethinking the general payment scene. 

Others believe there is still a lot of innovation to be had around our definition of Pay Day. Several startups, like Alpharetta-based Instant Financial, are looking to change the way employees access their wages. That could be big FinTech sector to watch if wage inflation continues into 2023. 

Another trend to keep an eye on? FinTech as a niche product, says Randy Etheredge, partner at R&Y Labs.

Part of that niche movement was driven originally by the crypto and DeFi app space, which Etheredge said is “democratizing lending” and “forcing the more traditional financial services companies to try to compete with that to stay competitive.” 

He told Hypepotamus that he sees as lot of opportunity with banks and neobanks launching to address very particular use cases (think banks for gig workers, college students, or consumers from specific communities and backgrounds). 

“Whether you’re trying to create a different opportunity for a specific group of people or whether you’re trying to create logic or implementations on top of financial services that allow more control…it’s not just the old school world of deposit and withdrawals anymore,” he added.

 

 

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