Despite market challenges, Fintech continues to attract venture capital
Financial technology (fintech) was caught up in the broader tech industry sell-off due to inflation fears, but the space continues to attract venture capital. This should set up an ideal growth play for fintech, making exchange-traded funds (ETFs) like Global X FinTech ETF (FINX) worth watching.
“Despite the ongoing market turmoil and crypto market meltdown, long-term transformational trends in the fintech sector such as mobile trading apps and digitized financial services have continued to attract strong venture investment in 2022,” noted a PitchBook article.
“Fintech startups raised $53.5 billion in VC funding in the first half, behind 2021’s pace but already exceeding 2020’s total, according to PitchBook data,” the article added.
Certain aspects of fintech are attracting interest, according to PitchBook. For example, decentralized finance and autonomous finance are building on the strength they saw during the pandemic.
“While some areas of fintech — like neobanks and real estate lending platforms — are maturing and attracting more late-stage capital, other areas — like decentralized finance and autonomous finance — are just starting to raise early-stage institutional capital, according to PitchBooks Q2 2022 Fintech Report“, PitchBook added.
High growth potential in Fintech
With fintech opportunities looming in the first half of 2022, there are potential value plays available in the space. Instead of holding various companies that focus on fintech, FINX can be an all-in-one solution for investors.
FINX seeks to provide investment results equivalent to the Indxx Global Fintech Thematic Index. The index is designed to provide exposure to listed companies in developed markets that offer financial technology products and services, including companies involved in mobile payments, peer-to-peer (P2P) and marketplace lending, financial analysis software and alternative currencies, as defined by the index provider.
The fund gives investors exposure to:
- High Growth Potential: FINX provides investors with access to high growth potential through companies that use technological innovations to disrupt and improve the delivery of financial services.
- An unrestricted approach: The fund’s composition transcends classic sector, industry and geographic classifications by tracking an emerging theme.
- ETF efficiency: In a single trade, FINX offers access to dozens of companies with high exposure to the fintech theme.
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