A few years ago fintech was a a new word that only a selected amount of people use, today is one of the strongest trends that is hitting the markets. Specially to the banks that feeling as if a group of piranhas were attacking their main activities; account management, currency exchange, savings, payments, SME lending and Peer to peer lending.

In the event “the age of fintech innovators” we were able to meet with some of the teams that are leading the fintech scenario in the Baltics. Sweedbank, as one of the hosts of the event, appointed that fintech is one of their focus areas. In the words of Aivaras Janusauskas, head of SSE and marketing department, "We see it's a great trend that will improve the value for our customers".

Funderbeam 

For the last year, Funderbeam has operated a startup-intelligence platform. In a few weeks, the company will add what it bills as the world's startup marketplace. Think of it as Bloomberg, AngelList and Nasdaq having a baby. A global primary and secondary market for early-stage startup investments. Funderbeam serves both sides of the transaction: startups that seek to raise funding across borders, and investors that seek to pool and invest their money through syndicates. 

The big innovation here is the secondary market where investors can trade digital tokens that represent their rights in these syndicates. This delivers a path to liquidity for investors — something that’s been sorely missing in the early-stage investment space. Unlike currency or stock traders, early-stage investments are notoriously illiquid — it takes years until a possible exit. 

Funderbeam has fixed this problem by introducing digital tokens. Essentially, these are “colored coins”, or bitcoins with embedded information that proves the token-holders rights to a syndicate and its underlying investment. Investors trade tokens instead of shares, making the process is quick, easy, and not hindered by national borders. The company uses blockchain technology to verify token ownership and transactions, removing the need for costly third parties.

For startups, Funderbeam’s syndication model enables cross-border fundraising from numerous investors without the risk of dealing with a crowded cap table. Each syndicated investment only adds one investor (the lead investor) to the direct relationship. (The syndicate is essentially a company in the middle that, with the lead investor on its Board, becomes the new shareholder. The lead and backers don’t get direct equity, receiving tradable digital tokens instead. If there is an exit at some point, token holders are paid proportionally to their percentage of the syndicate.) 

The lead sets up the syndicates, manages other investors (backers), and takes care of the day-to-day management of the syndicate. As a result, the lead does most of the heavy lifting, backers can spread their risks across several syndicates, and startups can focus on growing their business.

Savy 

Augustas Saras from Savy, has 7 years experience on business development. He worked the last 3 in financial sector and realised people have problems to start investing. Usually they go to bank and ask for a deposit that nowadays gives very low return. The alternative is stock exchange, forex or similar products that takes a lot of time and payroll. They decided to create a way for small investors to have an alternative that relies in their community based in 3 principles:

• Transparency- you know whom you are lending
• Safe- lenders get the money in their bank accounts.
• Responsible- p2p lending in Lithuania is regulated in national law.

Some interesting data about the achievements of Savy:

• 8000 lenders
• 300.000+ euros in interest earned
• 3.5M+ in money lent
• 50MEUR Total loans applied.
• 27% Average interest rate

Worapay 

Vaidas Adomauskas from Worapay, a mobile payment company, is now focused in UK expansion. Even though Banks are already in contactless cards and some stores are not accepting mobile partners they were able to find a spot. Usually consumers wait around 12 min per day in a queue. What if it was possible to order through mobile and pay? Nowadays every retailer is creating their own app to pay and it doesn't look as good solution because the users need hundreds of apps. These are closed solutions sometimes very ineffective. As an example of innovation we can see in London that oyster card merged different services allowing to use one device for accusing all transports. Now with the apparition of new technologies it can be used with other contactless solutions such as mobile, credit card or smart watches. Their goal is to make one app for ordering solutions with queues. “Order and pay in any retailer”. They are focusing in scenarios to save time like gas stations, coffee shops, food.

Their growth in UK is exponential, currently with around 300 transactions per day. In this sense, Startup Bootcam fintech has leveraged their efforts. Currently they are saving time to Lloyds employees because they order their coffee from their office, go down in their elevator and their coffee is made.

As an advise for new entrepreneurs:

• Focus
• Team
• Contacts

Manu 

Justinas Murauksas presented MANU, a P2P lending company from Vilnius. A new player in the market that has launched a month ago. The presentation was focused on providing some advice for new entrepreneurs, all based on presenter's own experience. Justinas talked about the challenges they faced regarding IT, issues with brand name creation and financing the first loans.

His first advice was to set specific milestones and have clear goals for your project. It sounds like basic thing to do, but without it you might find yourself failing to launch your project on time and spending precious resources for endless search for that "perfect" final stage for your project.

Regarding the brand name after looking for different things they have chosen MANU. Justinas was not expecting that creating a proper name for their company might eat so much time and draw attention of such mega companies like Manchester United.

Despite a very clear positioning as a provider of refinancing loans, they are still validating the needs of the market after the first month in action. Immediately after the launch a lot of customers approached them, but most of them were the ones with biggest financial problems and, as MANU is aiming for maximum security for their investors, majority of these loan seekers could not be helped.

This are some of the successful fintech startups raising in the Baltics and growing worldwide. We hope to see some of them in the next report of the best fintech innovators. (http://fintechinnovators.com/uploads/H2-Fintech-Innovators-2015.pdf)

“From the Baltics to the world boosting financial technologies”

(Article courtesy of Fintechbaltics.com)