I work in PR and have represented quite a few startup fintech companies. What puzzles me is that there are masses of these companies all around the world, yet they all seem to do the exact same thing (p2p payments, digital wallet stuff, transfer money to a business via an app etc.) They also market themselves in exactly the same way. Yet every day I see yet another utterly generic fintech company raise tens of millions of dollars in a funding round to do what every other app does.
I find this puzzling because surely fintech applications should work like a social network, ie it makes sense for everyone to be on the same application, in the same way Twitter works because lots of people are on Twitter.
I used to live in China and everyone there uses either WeChat Pay or AliPay and that’s it, and it works beautifully because everyone in the entire country is plugged into the same system (in China I could literally text money to my friends to pay them back for getting drinks, as well as pay my electric bills in the same manner). I actually had this conversation with a startup founder (although he works in agritech) and he basically said this to me, so I think I’m onto something.
Any insights you have are appreciated.
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Investing in startups is basically like a lottery. Most of them fail, but very occasionally one goes to the stratosphere and everyone who invested substantially in it becomes a billionnaire. It’s not really possible to tell in advance which is which, but some people think they can. Those people like to throw a lot of money at startups (some of them are just ordinary people with a few thousand to spare, but some are very wealthy or are in charge of investing a bank’s money or something). Fintech is trendy at the moment, so if you set up a reasonably compelling fintech startup, you will probably be able to attract significant investment.
> yet they all seem to do the exact same thing (p2p payments, digital wallet stuff, transfer money to a business via an app etc.)
One factor you shouldn’t overlook is that many startups are attempting to get involved in questionable activities, or take advantage of legal loopholes. For example, the main reason we now have all these “buy now pay later” companies, which are functionally equivalent to credit card companies, is that by not being credit card companies they can evade all the regulations that were introduced to address past abuses by credit card companies. Or, on a more ambitious level, you have stuff like Wirecard, which started out as an atttempt to evade restrictions on payments for gambling and porn that exist in many countries, and then turned into a gigantic Enron-style accounting scam. Obviously companies like this are not very upfront about their goals and tend to spin stories about their amazing technologies and services.
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