Fintech 50 2020: The Newcomers

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Reported by Jeff Kauflin, Michael del Castillo, Ashlea Ebeling, Antoine Gara, Sarah Hansen, Samantha Sharf, Kelly Anne Smith and Hank Tucker. As the financial technology industry balloons, with venture capital funding growing at a faster pace than the rest of the tech sector, new fintech startups keep emerging.
Nineteen of the picks for our fifth annual Fintech 50 have never appeared on the list before. Many are digital-first banks, insurance startups and payments companies, which ate up a big chunk of fintech funding last year. One example is Dave, a Los Angeles-based neobank whose $1-a-month app offers checking accounts with no overdraft fees and cash advances of up to $100. Another is Insurify, an auto and home insurance comparison site founded by Bulgarian immigrant Snejina Zacharia that uses artificial intelligence to more cheaply sell policies online.
Payments startups are also thriving. Fattmerchant, based in Orlando, bundles online and in-store credit-card processing and sales analysis into one monthly subscription service. CEO Suneera Madhani says the service costs 30-40% less than what traditional payment processors charge. San Francisco startup Plastiq lets small businesses use a credit card to pay for expenses for which cards usually aren’t accepted—such as rent, inventory and contractors—and charges a 2.5% fee.
Here are the 19 newcomers to the 2020 Forbes Fintech 50:
Dave Headquarters: Los Angeles
With its cartoon bear mascot and “Banking for Humans” pitch, Dave’s $1-a-month app offers users checking accounts with no minimums or overdraft fees; automated budgeting; cash advances of up to $100; and the ability to build up their credit scores through reporting of rent and utility payments to credit bureaus.
Funding: $76 million from Section 32, Mark Cuban, Norwest Venture Partners and others; latest valuation of $1.2 billion
Bona fides: Five million-plus users, estimated 2019 revenue of $90 million
Cofounders: CEO Jason Wilk, 34, who founded three other startups prior to Dave; CTO Paras Chitrakar, 40; Chief Design Officer John Wolanin, 37
Divvy Homes Headquarters: San Francisco
A digital take on the old rent-to-own model, Divvy buys homes clients select and then becomes their landlord. A 2% upfront fee and a portion of monthly rent can be converted into a downpayment if the tenant wants to buy later. Currently available in six markets, including Atlanta, Cleveland and Dallas.
Funding: $66 million from GIC, Andreessen Horowitz, Caffeinated Capital and others; latest valuation of $163 million*
Bona fides: Bought 900 homes last year, and is now receiving 10,000 applications a month
Cofounders: CEO Adena Hefets, 33, whose parents had to purchase a home with seller financing because they couldn’t qualify for a mortgage; chief product officer Brian Ma, 34; CTO Nick Clark, 37; senior software engineer Alex Klarfeld, 29, who made this year’s Forbes 30 Under 30 list
Ethos Headquarters: San Francisco
Uses predictive technology to quote term life insurance rates in about 10 minutes via its app and verifies applicants’ self-reported data with their actual medical and pharmacy records, requiring no medical exam for most buyers. The policies Ethos sells, designed specifically for its platform, have level premiums for 10 to 30 years and cap out at $1.5 million in coverage. Available in all states except New York.
Funding: $107 million from GV, Accel, Sequoia Capital and others, including celebrity investors Jay-Z, Robert Downey Jr., Kevin Durant and Will Smith; latest valuation of $450 million*
Bona fides: Partners with heavyweights Legal & General America to issue policies and Munich Re and RGA as reinsurers
Cofounders: CEO Peter Colis, 30, and CTO Lingke Wang, 29, were roommates at Stanford Business School when they hatched Ethos
Everledger Headquarters: London, England
Developed a blockchain to track the movement of goods from raw materials source to sales, with its first application tracking diamonds to make sure they don’t come from conflict zones. Now expanding to track cobalt, having signed a contract with the U.S. Department of Energy and a battery trade group in New Zealand.
Funding: $20 million Tencent, Graphene, Rakuten and others Latest valuation of $100 million
Bonafides: 2 million diamonds totalling 900,000 carats are currently being tracked on Everledger’s blockchain, which is being used by 100 stores at the Fred Meyer Jewelers chain in the U.S.
Founder & CEO: Australian Leanne Kemp, 47
Fattmerchant Headquarters: Orlando, FL
Small businesses have traditionally had to use different vendors to process credit card transactions in-store and online, and a separate tool if they want to analyze their sales. Fattmerchant bundles these services into one product for a monthly subscription rate that it says ends up costing users 30-40% less than traditional processors’ per-transaction charges.
Funding: $18 million from Fulcrum Equity Partners Latest Valuation of $140 million
Bona fides: Processed $2.3 billi...