Early-stage investing company Matrix Partners predicts that 2019 will see more fintech firms crossing the $1 billion valuation threshold, according to a report in TechCrunch. That means companies that’ve raised more than $100 million in total equity funding but haven’t crossed $1 billion in valuation, like SigFig, CommonBond, Personal Capital, Betterment and Wealthfront, could finally join the “unicorn club” in 2019.
Continued innovation in the financial services sector “will threaten to end the rule of the financial establishment,” according to Dana Stalder and Allen Miller, investors at Matrix Partners. That’s because as fintechs grow in value and experience, employees who leave are able to act on their own plans for starting something new, leading to more innovation. This “virtuous wave of value creation” could upend the incumbents, a group that dates back 150 years, according to Stalder and Miller. “The incumbents will continue to struggle with innovation, hamstrung by their scale, regulatory burdens, and decades of accumulated technical debt,” they noted.
In 2019, the pair predicts that the total aggregate value of fintech unicorns will cross $90 billion and that fintech liquidity events will exceed $10 billion in one year, something that's never happened before. “The fintech unicorn pipeline is primed for some big outcomes,” they observed.