It’s a difficult market for private financial technology startups. Venture capital funding has retrenched dramatically, with $39 billion invested in fintech globally in 2023, down from $75 billion in 2022 and a record $141 billion in 2021, according to CB Insights. Established fintechs that burn through the money they last raised at sky-high valuations in the heyday of 2020 and 2021 risk accepting lower values or not being able to raise new funds at all.
Newcomers for their part have to be scrappier to survive–or impressive enough in hard times to win a substantial venture investment.
Talk about scrappy. One newcomer, DataSnipper, was bootstrapped for five years and raised funds just this year at a $1 billion valuation, achieving sudden unicorn status. The Netherlands based company employs artificial intelligence to help audit and finance teams automate their reconciliation processes.
More scrappy behavior: New list honoree Pulley, which helps startups issue and keep track of who owns equity in their companies, was quick to capitalize when larger competitor Carta landed in hot water early this year for sharing some of its clients’ sensitive information with investors. Pulley CEO and cofounder Yin Wu took to X, formerly Twitter, to offer Carta defectors discounts, so they wouldn’t be paying on two contracts at once.
DataSnipper and Pulley are two of the four newcomers this year that cater to large businesses and startups, and they fall under a category we call Wall Street and Enterprise. (The strong showing of this group makes sense at a time when startups no longer have seemingly unlimited VC funds to lavish on big consumer marketing campaigns.) Another is Middesk, which helps clients including Plaid, Mercury and Tesla verify the identities of the businesses they work with. The fourth is Merge, whose platform integrates its clients’ cloud-based accounting, payroll, budget, tax and human resource tools into one system, creating a “one-stop-shop” for all their business processes.
Payments–and specifically payments with an international angle–accounted for two of the 13 newcomers this year. With dual headquarters in Cape Town and New York, Carry1st develops, licenses and publishes mobile games in Africa. Its payments platform, Pay1st, helps games like Call of Duty: Mobile accept local payment methods in different regions across the continent. New York-based Candex uses its international network to help large companies including Dell, Danone or L’Oréal pay their vendors around the globe without onboarding each one individually.
Business to business banking also contributed a newcomer. Helmed by ex-Block executive Lauren Myrick, Found is a digital bank for small business owners and self-employed professionals–think freelancers or owner-operators.
Two first-timers come from the investing space. A cohort of ex-Google executives made their debut on our list as the founders of Arta Finance, a digital platform providing high earners access to the types of alternative investments (like private credit) typically only available to the ultra wealthy through family offices. The other investing newbie is going after a different niche market: the forgetful. Capitalize is an independent platform finding, consolidating and transferring forgotten 401(k)s to one new IRA account with one of their partners like Betterment or Schwab.
On the personal finance side of things, Kudos Technologies is leveraging artificial intelligence to offer a browser installation that helps shoppers pick the best rewards card in their wallet for online purchases. Sunbit is also helping shoppers at checkout with loans designed for unplanned expenses at dental offices or auto repair shops.
Significantly, the one newcomer in the crypto and blockchain category, Gauntlet, aims to help blockchain-based decentralized finance projects, which blow up with distressing regularity, analyze and monitor risk. Real estate has one newcomer too, Groundfloor Finance, an 11-year-old company that packages loans to developers and then small investors to buy in. Rather than relying on venture capital, this low-profile, Atlanta-based survivor has turned to the platform’s own investors for funding.
Arta Finance
Aims to be a digital “family office” that provides high earners and the somewhat wealthy access to the sort of alternative investments (including private equity and private credit) and financial strategies traditionally available only to the very wealthy. Created in 2021 by former Google executives, Arta first operated by invitation only and then opened it up in October 2023 to all U.S. accredited investors (meaning those with investable assets of $1 million plus or income of $200,000 plus for an individual). It plans to launch soon in Singapore.
Headquarters: Mountain View, California.
Funding: $92 million from Peak XV Partners (formerly Sequoia Capital India), Ribbit Capital, Coatue Management and others.
Bona fides: Attracted $100 million in assets and more than 1,200 customers before opening to the public last October.
Cofounders: CEO Caesar Sengupta, 48; Chief Investment Officer Chirag Yagnik, 39; COO David Shapiro, 55; Charles Dong, 32; Edward Chiang, 38—all former Google executives.
Candex
Acting as a sort of master vendor, Candex moves invoices and payments through its system, eliminating the need for clients such as Dell, Danone and L’Oréal, to onboard each supplier individually. The company charges a 3% fee on each transaction it processes. In the past year, Candex has expanded into eight new countries including Japan, Taiwan, Malaysia and South Korea. Today, vendors in 45 countries can be paid within minutes.
Headquarters: New York, New York.
Funding: $85 million from Goldman Sachs, Altos Ventures, NFX and others.
Latest valuation: $300 million, Forbes estimates.
Date of last valuation: November 2023.
Bona fides: Annualized revenue grew to just under $20 million at the end of 2023, up from $7 million in 2022.
Cofounders: Jeremy Lappin, 46, a serial entrepreneur whose last endeavor before Candex was a marketplace helping companies find headhunters; Shani Vaza, 47, a former research and development manager for market data firm SuperDerivatives.
Capitalize
Capitalize helps users find old 401(k) accounts and consolidate them into a new IRA at one of its institutional partners, which include Betterment, Schwab, SoFi and Robinhood. In addition to its consumer offering, Capitalize has an enterprise business, where its rollover technology is embedded in the applications of the likes of Robinhood and SoFi.
Headquarters: New York, New York.
Funding: $15 million from Canapi, Bling and Walkabout, among others.
Bona fides: Annualized rollover volume on the platform grew from $250 million at the end of 2022 to $750 million at the end of 2023.
Cofounders: CEO Gaurav Sharma, 39; CTO Christopher Phillips, 48.
Carry1st
Develops, licenses and publishes mobile games in Africa and runs a payments platform that enables in-app purchases across the continent for such popular games as Call of Duty: Mobile. That’s significant since local payment methods in Africa dominate over the card payments which reign supreme in North America. Carry1st’s other partners include Riot Games, Supercell and Activision.
Headquarters: New York, New York and Cape Town, South Africa.
Funding: $58 million from Bitkraft Ventures, Andreessen Horowitz (a16z) and Google.
Bona fides: In 2023, the startup brought in $25 million in revenue.
Cofounders: Cordel Robbin-Coker, 37, a former vice president at Carlyle Group; COO Lucy Hoffman, 37, a former investment banker at Morgan Stanley; and CTO Tinotenda Mundangepfupfu, 38, a software engineer.
DataSnipper
Its AI-powered technology makes auditing and accounting more efficient, “snipping” numbers from loose reams of receipts, bank statements or handwritten notes and matching them with records of expenses while ensuring numbers add up. Accounting firms pay a subscription fee per user for the service, with 500,000 auditors in 125 countries signed on. Revenue grew 150% in 2023 to finish at a run rate of more than $45 million. Datasnipper opened its first U.S. office in New York in 2023 to better serve customers—40% of its revenue comes from the U.S.—and raised $100 million in January to fund further expansion.
Headquarters: Amsterdam, The Netherlands.
Funding: $200 million from Insight Partners and Index Ventures.
Latest valuation: $1 billion.
Date of last valuation: January 2024.
Bona fides: Doubled customer count in 2023 to 1,400 businesses, including all of the “Big Four” firms.
Cofounders: Jonas Ruyter, 32, Maarten Alblas, 32, and Kai Bakker, 31, bootstrapped the business for its first five years after founding it in 2017.
CEO: Vidya Peters, 43, former Marqeta chief operating officer and marketing veteran for Intuit’s Quickbooks who was recruited to take over in 2023.
Found
Launched in 2020, Found is a business banking platform designed for owner-operators, small business owners and self-employed people. Customers can use it to create invoices, manage contractors and track projects. Users range from restaurant owners and Etsy sellers to gig workers and independent business consultants.
Headquarters: San Francisco, California.
Funding: $73 million from Sequoia Capital, Founders Fund and Lightspeed Venture Partners.
Latest valuation: $350 million.
Date of last valuation: February 2022.
Bona fides: Nearly doubled its active users in 2023 to 122,000.
Cofounders: CEO Lauren Myrick, 39, an accountant who spent eight years at Square; Connor Dunn, CIO, 35.
Gauntlet
Aims to help decentralized finance exchanges (such as Uniswap and Arbitrum) to manage risk, while optimizing profitability. The firm’s premier service, Gauntlet Risk for Defi Protocols, has tools for real-time transaction risk monitoring at decentralized autonomous organizations (DAOs). Even during the “crypto winter” of 2023, Gauntlet was able to grow its customer base to 36 major blockchains, up from 29 in 2022. Of 14 mid-sized and large protocols, nine are clients.
Headquarters: New York, New York.
Funding: $45 million from Ribbit, Paradigm, and First Round.
Latest valuation: $1 billion.
Date of last valuation: March 2022.
Bona fides: Helps protect a total of more than $9 billion in clients’ protocol assets.
Cofounders: CEO Tarun Chitra, 35, Chief Technology Officer Rei Chiang, 37, and Chief Operating Officer John Morrow, 36.
Groundfloor Finance
Packages loans to residential real estate developers and then allows ordinary folks with as little $100 to invest, to buy real estate notes online as an alternative to real estate investment trusts or mutual funds. In October 2023, Groundfloor launched a new product which spreads users’ dollars across all investment opportunities on the platform to create a diversified portfolio across 50-100 projects. The company makes its money charging origination fees, closing costs and application fees to its real estate developer borrowers and in 2023 brought in $26.7 million.
Headquarters: Atlanta, Georgia.
Funding: $10 million from retail shareholders, Medipower, Fintech Ventures.
Latest valuation: $234 million.
Date of last valuation: October 2023.
Bona fides: By early 2024, the startup’s 240,000 customers had invested more than $1 billion on the platform.
Cofounders: Brian Dally, 52, and Nick Bhargava, 39, started the company after the 2000 Jobs Act introduced a new exemption which allows small investment offerings without the hefty compliance burden larger companies are subject to.
Kudos Technologies
Launched in 2022, Kudos Technologies offers a browser-based smart assistant that helps shoppers pick the best reward card in their wallet for each online purchase. The app also offers special rewards from thousands of participating merchants, all of which pay a commission to Kudos. In 2023, Kudos grew to 150,000 registered users, up from 5,000 users at the end of 2022.
Headquarters: Los Angeles, California.
Funding: $17 million from QED Investors, SciFi VC, Patron and others.
Latest valuation: $45 million.
Date of last valuation: September 2023.
Bona fides: Participating merchants include Walmart, Priceline and Lowe’s.
Cofounders: Tikue Anazodo, CEO, 32 Ahmad Ismail, CTO, 29.
Merge
Merge sells a platform that helps companies integrate their cloud-based accounting, payroll, budget, tax, and human resources systems. The company offers hundreds of integrations. CEO Shensi Ding likens the concept to a one-stop-shop for takeout that allows you to order Chinese, Indian or Italian without having to deal with each restaurant’s quirky site.
Headquarters: San Francisco, California.
Funding: $75 million from Accel Partners, New Enterprise Associates, Addition and others.
Latest valuation: $325 million.
Date of last valuation: October 2022.
Bona fides: Merge’s 300 customers include ByteDance, Korn Ferry and Ramp. Reached $14 million in revenue in 2023, up from $8 million in 2022.
Cofounders: CEO Shensi Ding, 31, and Gil Feig, 30, the duo are best friends from Columbia University, where both studied computer science.
Middesk
Using data from primary sources, including the Secretary of State offices in all 50 states, Middesk helps its customers verify businesses trying to open deposit accounts, take out loans or get onboarded to payments rails while keeping fraudulent companies out. Despite competing with legacy databases such as Dun & Bradstreet and Lexis-Nexis, this startup already has 600 customers, including national and regional banks and business banking fintechs such as Mercury and Bluevine.
Headquarters: San Francisco, California.
Funding: $80 million from Insight Partners Canapi Ventures, Sequoia Capital and others.
Latest valuation: $760 million.
Date of last valuation: July 2022.
Bona fides: Customers ran 2.5 million checks on businesses last year, up from 1 million in 2022, with Middesk receiving a small fee for each one.
Cofounders: CEO Kyle Mack, 33, and CTO Kurt Ruppel, 38, previously worked together at Checkr, which runs background checks on job candidates.
Pulley
Cap table management firm competing with larger peer Carta, which faced customer blowback in January for sharing sensitive information about startups with secondary market investors. Pulley promised to cover the remaining cost of defectors’ contracts if they switched by the end of the month and added hundreds of customers in January. Its robust fundraising model tells founders exactly how much their stakes will be diluted in complex early-stage rounds, and an offer letter tool automatically updates the cap table when a new employee accepts. Last year, Pulley began tracking token distributions for Web3 and blockchain firms. Plans start at $1,200 per year for startups with up to 25 stakeholders.
Headquarters: San Francisco, California.
Funding: $50 million from Founders Fund, Stripe, YCombinator and others.
Latest valuation: $250 million.
Date of last valuation: October 2022.
Bona fides: Has 4,200 customers, up 90% since the beginning of 2023.
Cofounders: CEO Yin Wu, 35, serial entrepreneur who sold a previous company to Microsoft; Mark Erdmann, 40, expert software engineer.
Sunbit
Founded in 2016, Sunbit provides point-of-sale consumer financing for large unplanned expenses incurred at thousands of businesses, such as dental offices and auto repair shops. The company had more than two million loan customers in 2023, up from 1.6 million in 2022. Nearly 10,000 dental practices use Sunbit’s patient financing tech.
Headquarters: Los Angeles, California.
Funding: $256 million from Zeev Ventures, Group 11, Chicago Ventures and others.
Latest valuation: $1.1 billion.
Date of last valuation: May 2021.
Bona fides: Brought in $191 million in revenue in 2023, up from $129 million in 2022. Cofounders: CEO Arad Levertov, 46, who served in Israel’s Shayetet-13 unit, often referred to as the Israeli Navy Seals; chief revenue officer Tal Riesenfeld, 46; CTO Ornit Maizel, 44; head of AI Tamir Hazan, 49.