The Role of ESG Integration in Fintech’s Evolution: Navigating Opportunities

| 4 minutes

In recent years, Environmental, Social, and Governance (ESG) principles have emerged as key pillars guiding decision-making processes, reshaping investment strategies, product development, and risk management practices. This shift not only reflects a growing societal consciousness but also presents fintech firms with an array of opportunities and risks as they navigate the integration of ESG criteria into their operations.

ESG in Fintech:

The rise of ESG principles within fintech is not merely a trend but a fundamental reevaluation of values and priorities. According to recent studies, 54% of corporate directors acknowledge the direct link between ESG issues and their company’s strategy. This indicates a gradual recognition of the importance of strategic ESG considerations with room for further adoption and implementation.

Opportunities (and Risks) for Fintech Companies:

Integrating ESG factors into fintech operations presents numerous opportunities. By aligning with ESG initiatives, companies can foster innovation, attract socially responsible investors, and enhance brand reputation. Also, leveraging this criteria enables fintech firms to address societal and environmental challenges while generating sustainable long-term value.

Ignoring ESG considerations poses risks including administrative scrutiny, reputational damage, and loss of competitive advantage. 49% of investors share that they would no longer invest in companies that aren’t taking action on ESG issues. In an era where consumers and investors increasingly demand transparency and accountability, overlooking ESG factors, prioritization of sustainability and social impact can lead to detrimental consequences like legal repercussions and fines.

Technological Solutions for ESG Integration:

From ESG data analytics to impact investing platforms, sustainable finance products, and ESG risk assessment tools, technology is empowering financial institutions to make informed decisions and drive positive impact. These technological solutions not only facilitate ESG integration but also enable companies to measure and track their sustainability performance effectively.

A great example of this is Clarity AI, a dynamic fintech startup in the ESG sector. Strongly values-driven, Clarity AI sought diverse candidates who shared their vision of having a positive impact on the world through a focus on sustainability. 

Machine learning is at the heart of Clarity AI’s market-leading sustainability tech, allowing it to regularly analyze more than 2 million data points. The platform’s customizability, enabling users to report on as much or as little as needed and break down performance against SDGs at a product or service level, has been instrumental in the firm raising $80 million since 2017.

Best Practices for ESG Integration in Fintech:

Within the fintech industry, the market for ESG has a projected growth rate of around 20% compound annual growth rate (CAGR) in 2024. For fintech companies seeking to embed ESG considerations into their business strategies, adopting best practices is essential. Establishing clear ESG policies, conducting materiality assessments, setting sustainability goals, and engaging stakeholders are paramount. Case studies of fintech firms that have successfully implemented ESG initiatives can provide valuable insights and serve as guiding examples for others in the industry.

The integration of ESG principles represents a pivotal moment in the evolution of fintech. By embracing ESG criteria, companies can not only drive innovation and attract investors but also contribute to a more sustainable and equitable future. As the market for ESG fintech continues to grow, fintech firms must seize the opportunity to lead by example, recognizing that long-term success lies in the alignment of financial performance with environmental and social impact.

As fintech companies navigate this evolving landscape, embracing ESG principles is not only a strategic imperative but also a moral obligation, ensuring that financial innovation is synonymous with sustainability and societal impact.

Is your fintech sales team eager to expand and navigate the evolving landscape of ESG integration? Let us help you grow and thrive. Get in touch with us today to explore how Finiti can help empower your team to seize new opportunities.

How to tell if you’ve seen a unicorn

| 5 minutes

Having focused on Fintech for almost 20 years, we’ve seen many ambitious startups grow to become industry-defining leaders and been lucky enough to help them build their teams along the way, including the likes of PayPal

We might not have a crystal ball, but over the years there are a couple of key things that make a startup stand out as having true unicorn potential. 

Killer Concept 

If your first reaction to a new product or service is “how does that not exist already?”, it’s a good sign they’re onto something big. 

Whether it’s something that vastly improves an existing product or service or an innovation that fills a gap in the market, a great concept is the foundational characteristic of any potential unicorn. 

It can’t just be a good idea. To reach household-name status, startups will need a well-defined business model with a clear path to profitability and sustainable revenue generation.

A-Team 

The next thing to look at is the people responsible for turning that great concept into a business: the leadership team

Low turnover at senior levels and a clearly articulated vision are must-haves when spotting future unicorns. 

Dig into the background and experience of those in leadership roles. People with expertise and proven experience in both the sector and a startup environment will be best placed to help businesses navigate challenges and successfully scale. 

Sustained growth

If the idea and the team meet the mark, the next proof of unicorn potential is in the numbers. 

A dazzling balance sheet one financial year might help secure that next funding round, but businesses with true long-term potential will show sustained growth over a number of years

Depending on the product or service, this might be growth in the number of users, the number of markets the business operates in, as well as factors like market share or even an active community on social media. 

Funding 

With sites like PitchBook and Crunchbase, it’s possible to look back and see how much funding a startup has managed to secure and who their backers are. 

Problems with cash flow and funding is one of the main reasons startups fail. 

When a business has managed to secure funding from big-name investors and VCs that know the industry and have a track record of identifying winners, it’s a sign they could be on to something big. 

Reputable funding does more than giving the business a short-term cash boost. Having big-name investors on board acts as a form of social proof, encouraging others to invest and shoring up a startup’s longer-term funding pipeline. 

Time 

It may seem simple, but one of the biggest indications of a startup’s potential is that they’re still around. Surviving year one is a big milestone, but the majority (70%) of businesses fail between years two and five

Passing the five-year mark isn’t a guarantee of long-term success, but it gives you confidence that the business can weather changing conditions and continue to grow. 

Finding your future unicorn

Whether you’re looking for the team to lay the foundations for future unicorn status or you’re on the hunt for the perfect role at the next big name in Fintech, Finiti can help. 

We’re a boutique agency specialising in sales roles within Fintech. Our carefully curated talent network means we match opportunities and people based on much more than CVs and past experience. 

Get in touch with the team today to find out more about Finiti Search, how we work, and the opportunities waiting for you

Unicorns in waiting: 5 Fintech startups to watch

| 5 minutes

The pace of innovation is just one of the many reasons we love working in Fintech; yesterday’s idea can quickly turn into the billion-dollar unicorn of tomorrow. 

There are already more than 300 Fintech unicorns, with four new companies making the cut this year and three previously public companies rejoining the list. With a combined value of $1.55 trillion and counting, there’s no doubt that these giants will continue to shape the Fintech industry.

But who will be next to join their exclusive club? Here’s the top five unicorns-in-waiting that we have our eyes on. 

Codat

Founded in 2017, this software startup has rapidly emerged as a key player in Fintech. 

On a mission to streamline the exchange of financial data between small businesses and financial institutions, Codat has experienced exponential growth. In just six years, their client base has grown to over 10,000 businesses worldwide. 

Fueled by substantial funding, they’ve secured a total of $176.8 million from big names including JP Morgan Growth Equity Partners and Shopify which they’ve invested in enhancing their platform and hiring top talent. 

As they continue to scale, Codat is perfectly poised to revolutionise how businesses interact with their financial data and become a business must-have. 

Clarity AI

Another 2017 startup, Clarity AI leads the way when it comes to sustainable finance. 

Their values-led approach has clients and investors queuing out the door. They’ve secured over $80 million in funding, enabling the company to expand its operations, develop cutting-edge technology, and attract top-notch talent. 

This year, their valuation has skyrocketed to an impressive $450 million. It’s a valuation that’s only set to rise alongside demand for ESG-driven solutions and a more responsible, ethical financial landscape.

SentiLink

SentiLink, an innovative identity verification startup, has rapidly established itself as a leading player in the cybersecurity industry. 

Since 2016, it’s attracted widespread attention earning a place on Forbes’ Fintech 50 list and achieving a valuation of $430 million

Their technology that enables businesses and financial institutions to detect and prevent fraud has been widely adopted. Securing over $85 million in funding, their 300 customers include other major Fintech players and seven of the US’s 15 largest banks. 

As companies look to stay compliant and protect revenue through proactive risk management, we predict it won’t be long before SentiLink become a unicorn. 

Abound

What happens when a former EY director focused on lending and credit analytics and the Global Head of Digital Lending at McKinsey team up? Abound. 

The dynamic duo set about to revolutionise the way individuals access financial assistance with a little help from AI. Focusing on inclusion and responsible lending, Abound wanted to deliver a user-friendly interface with transparent lending options. 

Hugely successful in terms of funding, they recently raised over £500 million which will be used to develop their B2B capabilities and grow their headcount. 

Founders Dr Michelle He and Gerald Chappell predict their balance sheet will hit the $1 billion mark by 2025, but we think these two have the potential to exceed even their own expectations.  

Cleo

Calling Gen Z, your personal financial assistant is here: meet Cleo. Jargon free and powered by AI, this increasingly popular app enables users to take control of their personal finances and make more informed financial decisions.

Named one of the best money saving apps of 2023 by the Metro, the Cleo team have already secured $137.5 million in investments, $80 million of which was in June this year, which they plan to use to grow their team by almost 60%

With their valuation now sitting at the $500 million mark – five times their 2020 valuation and huge potential for B2B integrations, Cleo is set to become the go-to money management tool of the digital banking age. 

Creating unicorns

Achieving this kind of growth doesn’t happen on its own – it needs a great team, and having the right sales leaders in place is a critical hire for any Fintech startup. 

We’re incredibly proud of the role Finiti Search has played in finding the right people to take startups from ideas to unicorns-in-waiting and love watching business grow into household names. 

If you’re looking for the perfect person for an open role or want to chat more about shaping your future sales team, get in touch to find out more about Finiti Search and our talent network and unique approach.

Happy 10th birthday unicorns! What we’ve learnt from a decade of raising unicorns

| 5 minutes

You know what they say: they’re all grown up before you know it! 2023 marks a decade of the so-called unicorn startups.  Rare and valuable, achieving “unicorn” status is a start-up dream-come-true for founders and investors alike. But the unicorns of 2023 are starting to look a little different to their mythical friends from previous years. 

What is a unicorn? 

Venture capitalist and founder of Cowboy Ventures, Aileen Lee created the term in 2013 to describe billion-dollar software companies. 

Some believe the term only applies to startups, whilst others pin it down more, defining unicorns as VC-backed companies valued at $1 billion or more. 

Companies lose their unicorn status if their valuation drops below $1 billion or they no longer need VC backing due to being acquired or going public. 

How common are unicorns? 

According to PitchBook’s Unicorn bible, there are currently 1323 active unicorns globally, a huge increase from the 39 startups that met Lee’s criteria back in 2013.  

Some of the best known and most valuable include Chinese sensation ByteDance, Stripe, and the now infamous OpenAI

Are they endangered?

Despite the huge increase in billion-dollar valuations over the last ten years, unicorns are starting to become more rare again. 

Companies achieving unicorn status hit a peak in 2021 when 606 startups proudly donned their shiny white coats and placed glittery single horns on their heads. 

That number dropped by 42% YOY with only 349 unicorns crowned in 2022. Now halfway through 2023, only 44 startups have achieved that billion-dollar valuation.

Where can I find a unicorn? 

Much like in Fintech, the US is the place to go if you’re looking for unicorns; just over half (695 companies) call the US home. 

China has around a third of that number (265), with India (66), the UK (45) and Germany (27) below the 100 unicorn threshold. 

But don’t saddle up and head for the US just yet. In 2023’s class of unicorns, less than half are in North America (48%), with the percentage of unicorns in Asia growing to 32%, up from around 20% in 2022. 

What does my unicorn do all day? 

This year’s unicorns are also a little different when it comes to how they make their billions. 

In the 2021 peak, the top industries for unicorns were IT, healthcare and consumer-facing products and services. 

Whilst IT remains first past the post, B2B and energy focused businesses have climbed up the tables, taking second and third place respectively. 

The next decade of unicorns 

In the current economic climate, funding is harder to come by and investors are more wary. 

Startup valuations reflect this. In Q1 2023, only 71% managed to achieve a higher valuation than previous rounds, with almost one in five experiencing a “downround”.  

Unicorns are becoming rarer, and that’s a trend that’s likely to continue. But that might not be a bad thing. Unicorns are supposed to be rare. They’re the magical exception to the tough reality of startups. 

Being less focused on racing to the billion-dollar valuation might just give some promising startups the room they need to breathe, reflect, and to build a sustainable business that’s a trusty steed rather than a glamorous myth.

Need your next jockey? 

Whether you’re at the billion-dollar mark or fresh out of the stable, we focus exclusively on putting the right sales team in place to grow your Fintech business. If you’d like to find out more about sales roles in the start-up sector, we’d love to hear from you. And if your business is growing in this industry and is looking to attract some great talent, we think Finiti Search can help. 

Get in touch to find out more about how we can help – no more horse puns, we promise.