A year in review: A look at the Southeast’s FinTech scene

It was quite the year for fintechs around the country.

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

On a national level, FinTechs saw a general decline in funding year-on-year. That wasn’t particularly surprising, given the fact that 2021 saw a record $132 billion in venture funding flow into the sector. This year, with rocky financial markets and high inflation, many notable international fintechs such as Plaid and Klarna made headlines for record layoffs and steep falls in valuations.

How do Southeast Fintechs feel?

Despite the challenges, local FinTechs are ready to build. This applies especially to startups i alternative investmentbanking-as-a-service, and lending sectors.

Georgia alone is home to close to 200 private fintech startups want to change payments, investments, lending and banking services.

We asked several startup founders how their business fared in the past year to get a sense of the FinTech landscape right now. Momenta growth stage Atlanta company focused on built-in financing and lending options, saw significant growth at many levels of their business during 2022.

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

“The fintech space has seen many high-burning companies flame out and [that] created great opportunities from a human capital point of view. We expect to see investors trending towards businesses operating at or near profitable levels versus blowout spending that we have 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 development,” said Barclay KeithCEO and co-founder of Momnt.

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

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

Trends to expect in 2023

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

It could mean big things not only for Momnt, but also for startups like Verdata and others who are rethinking the general payments scene.

Others believe there is still a lot of innovation to be gained around our definition of Pay Day. More startups, such as Alpharetta-based Instant financial, wants to change the way employees access their pay. It could be a big FinTech sector to watch if wage growth 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 this niche movement was initially driven 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 it to remain competitive.”

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

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