2020 is a new decade for financial technology (FinTech). What is being labeled as FinTech 2.0, promises deeper innovation, customized product offerings, and immense growth in financial services. With over $53 B invested globally in 2019, companies around the world are committed to the replacing legacy banking structures, democratizing access to financial services, and improving the financial lives of consumers globally.

Forbes FinTech 50 showcases the 50 most impactful companies in FinTech (for the US) when it comes to industry innovation and growth, across multiple sectors such as B2B lending, real estate, insurance, payments, blockchain, and personal finance. 

Out of the 50 firms that were recognized in 2020, 24 came from the FinTech hub of the San Francisco Bay Area (San Francisco, Oakland, Mountain View, Palo Alto, San Mateo). Here’s the 2019 list of 25, and the 2018 list of 7. 

Of the 24, there are 13 companies that were also featured in 2019, and 11 newcomers. ‘Insurance’ is a new sector featured in 2020; the ‘Lending’ sector from 2019 became part of ‘Personal Finance.’

Here are the 24 companies from the Forbes FinTech50 representing the Bay Area in 2020 (sorted by category):

BLOCKCHAIN & bitcoin (2):

Both leaders in the Blockchain / Cryptocurrency sector return in 2020 (from the 2019 list) with deeper offerings and expansive partnerships. Despite cryptocurrency struggling to find its official standing in the world of banking, both Ripple and Coinbase have established themselves as top brands in remittances and retail investments.

• Ripple (part of 2018’s DEEP DIVE series) continues to expand its products as a global leader in settlements and transfers.  Replacing costly alternatives such as wire transfers in banks or Western Union, the company facilitates international payments with its cryptocurrency (XRP). 10% of Moneygram’s cross-border transactions to Mexico use XRP. Ripple continues adding institutional clients (now over 300) with some of the biggest names in banking (e.g. Santander and Standard Chartered).  The debate rages on for Ripple’s XRP regarding its status as an unregistered security. Based out of San Francisco, the company is valued over $10B and was founded in 2004 by Chris Larsen, Jed McCaleb, and Arthur Britto.

• Coinbase increases its growth and influence as a top cryptocurrency exchange, growing beyond a retail marketplace and moving towards the needs of institutional investors.  After achieving a milestone of being marked as a regulatory-compliant exchange, the unicorn now offers custodial options to institutions, a consumer wallet with balance rewards, and a wider set of currencies focused on privacy. The biggest announcement in 2020 is its deepening of a partnership with Visa (announced Feb 19th) in which it will launch a crypto-based debit card (without relying on 3rd parties). Based in San Francisco, Coinbase is valued over $8B and was founded in June 2012 by Brian Armstrong (CEO).

PERSONAL FINANCE (6):

As the fintech sector with the largest group from the Bay Area, ‘Personal Finance’ includes the ‘Lending’ category from 2019. There are neobanks, a retail savings and investment platform, and credit providers. Three of the six featured companies have returned from 2019 — Affirm, Chime, and Nova Credit.

• Nova Credit has established itself as a critical tool for immigrants lacking a credit profile from non-US credit bureaus (of over eight counrties including Canada, Mexico, and UK), by gathering data to help US lenders and landlords judge credit worthiness.  By leveraging its data models, Nova has created a “Credit Passport” number — comparable to the FICO scoring standard in the US.  Last year, Nova established a partnership with American Express, in which applicants from Mexico, Canada, UK, India, and Australia are instantly approved for credit cards. Based out of San Francisco, the company recently raised a Series B of $50MM (announced Feb 12th), and was founded from a Stanford graduate class project by Misha Esipov, Nicky Goulimis, and Loek Janssen.

• Affirm continues its growth as a digital lender for point-of-sale transactions (with merchant partners), offering 3 - 12 month loans at a fixed rate of 10% - 30% APR (depending on credit score and other data), without any additional fees. Some of Afform’s 4,000 participating merchants include WalMart, Wayfair, Casper, and Expedia. The launch last October of their mobile app now allows users to get pre-approved for financing before shopping. Affirm acheived unicorn status at the end of 2017 and is now valued over $2.9B — based out of San Francisco, the company was founded by Max Levchin.

• Chime (part of 2020’s DEEP DIVE series) is a digital (mobile-only) bank initially built to help customers avoid fees. With over 7MM accountholders (as of January), the company has expanded to offer overdraft protection up to $100, automatic savings tools (to round-up purchases to the nearest dollar and transfer to a savings account) and payday advance (allows users with direct deposit to access funds two days early through “Get Paid Early”). Based in San Francisco, Chime is valued over $5.8B and was founded in 2013 by Chris Britt and Ryan King.

• Lively created an employer benefits platform that has modernized health savings accounts (HSA), which cover out-of-pocket medical expenses incurred in the future. Employees have access to fee-free investing options (through TD Ameritrade) of the money they’ve contributed tax free in an HSA. Employers pay a monthly fee of $2.95 per employee. Based in San Francisco, the company was founded in 2016 by childhood friends Alex Cyriac (CEO) and Shobin Uralil (COO).

• Tally is a debt consolidation and payoff app focused on reducing credit card debt, avoiding late fees, and other penalties by issuing a line of credit to consumers (at a rate lower than the cards). On an automated monthly basis as this credit line gets pay down, the newly available credit gets applied quickly to outstanding balances, with priority given to the highest-rate cards. Based in San Francisco, the company was founded in 2015 by Jason Brown (CEO) and Jasper Platz (board member), who were both MBA classmates at the University of Chicago.

• Upstart is an online lending platform that uses AI and alternative data (e.g. education, employment history), credit scores, and income information to underwrite personal loans. The company has been able to automate 70% of originations and minimize losses of customers with average credit. Based out of San Carlos, the company was founded in 2012 by Dave Girouard (CEO), Paul Gu (Head of Product), and Anna M. Counselman (Head of Operations).

PAYMENTS (5):

The payments sector continues to be the core of the FinTech industry, featuring the most companies and highest valuations out of all other sectors globally. Some notable heavyweights, Plaid and Stripe, are continuously featured — while newcomers (Finix, Marqeta, and Plastiq) have carved a strong niche to expand from.

• Finix is a payment infrastructure platform that to allows companies to own, manage, and monetize more of their payments experience without the expense of building an in-house processing system from scratch. The increase can be up to 0.4% on each transaction (compared to traditional merchant providers), which quickly adds up for high volume ecommerce and fintechs. Based in San Francisco, the company was founded in 2016 by Richie Serna (CEO) and Sean Donovan.

• Marqeta helps businesses monitor and control the usage of company cards upfront with its processor platform, minimizing unauthorized transactions and fraud. Companies issuing cards to workers or customers can limit the categories and amounts approved; in particular, Instacart uses Marqeta monitor the correct purchase and fulfillment of orders. Square’s Cash App also uses Marqeta to allow consumers to make everyday purchases, transfers, and buy stocks. Based in Oakland, the company is valued over $1.9B and was founded by CEO Jason Gardner.

• Plaid (part of 2018’s DEEP DIVE series) is an indirect part of the Payments sector in FinTech, as the fintech connects payments and finance apps that rely on bank data to integrate with financial institutions (currently over 10K) using its API offerings. Only a handful of FinTech companies have as much widespread engagement in the industry as Plaid when it comes to businesses and individual customers. In January, Visa agreed to buy Plaid for $5.3 billion. The company is based in San Francisco, and was founded in 2012 by Zach Perret (CEO) and William Hockey (CTO).

• Plastiq has a platform that allows credit card usage for small businesses to pay for various expenses, such as rent, inventory and other categories (typically unable to be fulfilled by cards) — for a 2.5% fee. Of its over 50K clients, most are restaurants, doctors, and construction companies. Based in San Francisco, Plastiq was founded in 2012 by Daniel Choi and Eliot Buchanan (CEO) after he graduated from Harvard.

• Stripe (part of 2019’s DEEP DIVE series) is THE giant among FinTech unicorns— first focused on payment processing, and expanding its platform to issuing credit cards, POS software, and billing. The company serves businesses of all sizes in accepting online payments, from small sites to tech giants (Facebook and Amazon). Last year, Stripe made a move to the lending space by featuring its own corporate credit card and small business loans, which paid automatically from online payment receipts. Based in San Francisco, the company is valued over $35B and was started in 2010 by Irish brothers, Patrick and John Collison.

B2B Lending (1):

There are only two companies featured this year in the B2B lending sector, Brex (listed in 2019 and Kabbage (based out of Atlanta). As fintech companies heighten efforts on customization for business users and their complex needs, anticipate the group in this sector to double down in delivering what’s missing in business banking.

• Brex (part of 2020’s DEEP DIVE series) offers corporate cards for startups and entrepreneurs based on the company’s cash and value, instead of personal credit history of borrowers / founders (which traditional lenders still underwrite). The cards have specific rewards toward travel, subscription, or transportation expenses, and can also be customized for verticals such as e-commerce. A second product launched in October 2019, called Brex Cash, is a cash management account capable of replacing traditional bank accounts with no-fee ACH or wire transfers. Based in San Francisco, the company was founded in 2017 by Brazilian entrepreneurs Henrique Dubugras and Pedro Franceschi, who both left Stanford to go full force with Brex.

REAL ESTATE (5):

The real estate sector continues to explode with growth from companies challenging legacy models of home ownership and investment, to the inefficient process of title search. Both Roofstock and OpenDoor have returned from the 2019 list, and three newcomers arrive in 2020 — all based in San Francisco.

• Divvy Homes has a built an on-ramp for homeownership by digitizing the rent-to-own model. The company buys homes that clients select in specific markets, and then becomes their landlord. From each monthly rent payment, a portion goes to a downpayment fund for the tenant to purchase their rental in the future; there’s also a 2% upfront fee paid to cover fees, closing costs, taxes, and insurance. Most renters in this program qualify for a mortgage in less than 3 years. Divvy is currently working in 10 markets (including Atlanta, Cincinnati, Tampa, St. Louis, Phoenix, Minneapolis, Cleveland, San Antonio, and Dallas), in which rent payments are comparable to paying a mortgage. Based in San Francisco, the company was founded in 2017 by Adena Hefets (CEO), Brian Ma (CPO), Nick Clark (CTO), and Alex Klarfeld (software engineer).

• Roofstock provides a digital marketplace for investors interested in the leased single-family rental market by providing resources for analysis, purchase, and selling properties. Active in 25 states, the company works mostly in properties with tenants in place. Roofstock’s platform works similar to managing a stock portfolio, in which investors are only focused on asset allocation instead of purchasing, repairing, and then leasing homes. The company offers 12-months of guaranteed rent on vacant homes it sells. Based in Oakland, the company was launched in 2015 by Devin Wade, Gary Beasley (CEO), Gregor Watson, and Rich Ford (CDO).

• States Title brings efficiency and automation to this niche sector within real estate, by speeding up the title search process. Instead of causing delays in the closing of a real estate transaction, States Title can review and clear titles for homes in minutes based on online ownership data and predictive analytics (from machine learning). This speed and automation is a huge saver on title fees by reducing title officers and time to close. Based in San Francisco, the company was founded in 2016 by Max Simkoff and Daniel Demetri.

• Opendoor is considered an “iBuyer” and helps both existing and prospective homeowners. The company purchases properties directly from homeowners looking to sell in a few days (avoiding the time needed for listing), and sells directly to buyers from the portfolio of properties it owns without added on fees from traditional agents. Sellers can receive all-cash offers (in 21 cities) from Opendoor’s website, review bids within 24 hours, and finalize the transaction in two weeks. Opendoor’s app allows buyers to schedule their own open house tour and bid on homes. Based in San Francisco, the company was founded by Keith Rabois (board member), Eric Wu (CEO), Ian Wong (CTO), and JD Ross.

• Unison offers an equity-participation platform for homebuyers and owners in 30 states. The company gives the homebuyer an option of selling some of the future appreciation in their houses, by assisting with the initial down payment (up to 10% of purchase price) to make the purchase. In return, Unison and its investors take up to 33% of the appreciation (or loss in a down market) when the house is sold. For existing homeowners, the company is able to provide a similar product but as a no-payment, equity line of credit up to 20% of the home’s value. Based in San Francisco, the company was founded in 2004 by Thomas Sponholtz (CEO).

INSURANCE (3):

The intersection of insurance and technology (InsurTech) has a growing movement as its own sector within FinTech (new category for the Forbes FinTech50 list). Companies such as Lemonade and Metromile, which cater to auto insurance, are being joined by others in the life insurance, home insurance, and business insurance. Each of these three first-timers are disrupting separate segments within insurance, based on analytics and innovative business models.

• Ethos has created a platform that can quote term life insurance in minutes through its app, based on predictive analytics and an applicant’s data (both self-reported and medical) without a health exam. The company’s policies have level premiums for 10 - 30 years with a cap of $1.5 million coverage, and are available in every state but New York. Based in San Francisco, the company was founded in 2016 by Peter Colis (CEO) and CTO Lingke Wang (CTO), both roommates at Stanford Business School.

• Hippo Insurance is making an impact in the home insurance space through it streamlined application and claims process that relies on public data, satellite imagery, and smart home devices. The company acquired Sheltr in November to perform home maintenance inspections twice per year, and is live in 21 states. Based in Palo Alto, the company was founded in 2015 by Assaf Wand (CEO) and Eyal Navon (CTO), both from Israel.

• Next Insurance is a mobile-first insurance carrier focused on small businesses by packaging services, specifically as general liability, professional liability, commercial auto and worker’s compensation. These packages are then tailored to specific business trades, such as contractors or restaurants, and are available in every state but New York. Based in Palo Alto, the company was founded in 2016 by Guy Goldstein (CEO), Alon Huri (CTO), and Nissim Tapiro (VP of R&D).

WALL STREET & ENTERPRISE (2):

Out of the 4 companies in this category, two are based in New York (Behavox and Trumid) and the other two in the Bay Area. Both Addepar and Carta return from the 2019 list, and have added more integrations with enterprises and achieved increased growth in assets under management.

• Addepar has a cloud-based software platform for tracking and analysis of asset holdings, specifically for private offices, banks, and advisors — offering integration with industry leading companies such as Salesforce, Quovo, iCapital Network, and Morningstar.  Addepar interfaces with big financial platforms like Morningstar, Citco Fund Services, Quovo, iCapital Network and Salesforce. Based out of Mountain View, the company was started in 2009 by Joe Lansdale and Eric Poirer (CEO).

• Carta focuses on management and cloud-based tracking of capital (i.e. ownership, shares, value, and options) in private companies for employees and investors alike, working with multiple unicorns in the startup space (such as Coinbase and Robinhood).  One of their milestones for 2019 was reached as Carta was able to build a secondary marketplace for private assets. Based out of Palo Alto, the company was started in 2012 by Henry Ward (CEO) and Manu Kumar in 2012.

As the FinTech industry opens a new decade of 2020, be on the lookout for new companies, new industry sectors, established companies expanding their product suite, and unicorns being bought out or going public. The emergence of new players from the San Francisco Bay Area shows how open the playing field is when it comes to delivering innovative financial services to consumers who need it most.

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