Priya Patel
TLDR:
– Fintech funding has shifted from consumer to business propositions, with business-to-business (B2B) SaaS startups attracting 58% of funding in 2023 compared to just 20% for business-to-consumer (B2C) startups.
– Many B2C companies are pivoting to the B2B arena in order to monetize their technology and achieve profitability.
– Selling technology and experiences to financial institutions allows fintech companies to generate sustainable and predictable revenue through licensing fees and makes their businesses more attractive to investors.
Fintech funding has undergone a shift from consumer to business propositions, with B2B SaaS startups attracting 58% of funding in 2023 compared to just 20% for B2C startups, according to Dealroom.co. Many B2C companies are pivoting to the B2B arena in order to monetize their technology and achieve profitability. This trend is driven by the difficult market for selling banking products to consumers, which is highly competitive, and the fact that financial institutions already have the necessary consumer relationships to scale new technology. Selling technology and experiences to financial institutions allows fintech companies to generate sustainable and predictable revenue through licensing fees, which is a more understandable model for investors. This shift to B2B could be the future of the fintech industry, as consumer fintechs are likely to face more challenges and need to find sustainable growth strategies. The recalibration of the fintech industry could center on the bank-fintech relationship, with fintech companies selling their technology to banks instead of competing with them.
