Investing in Fintech: A Look into 2022

With more than $50 billion in capital commitments across over 200 investments throughout 2021, Insight Partners had a banner year. While we invest in founders across a wide spectrum of businesses, this series focuses on outlining our theses on four verticals that we’re particularly excited about in 2022: artificial intelligence, fintech/crypto, cybersecurity, and healthtech. 

When the pandemic closed storefronts around the world, $5+ trillion in global retail sales moved online and consumers increasingly adopted digitized financial services. 

That massive change, along with the rise of neobanks and embedded finance, spurred Insight Partners’ investment in almost 30 global fintech companies in 2021 — a 263% increase from 2020. 

As COVID-19’s ripple effects are again poised to impact fintech in 2022, there are several key trends that Insight expects to shape the ecosystem this year:

First, we will continue to see alternative forms of payment provide cheaper, faster, safer, and easier-to-use alternatives to legacy systems. In particular, countries with growing economies and rising middle classes – such as India, Indonesia, Philippines, Mexico, and Brazil – will see increased innovation and growth in digital banking services, eWallets, real-time money transfers, and buy-now-pay-later and other credit products. Because these developing countries have large populations which have traditionally been unbanked and underserved, we expect to continue to see a surge of tech-forward, consumer-centric, and localized fintech companies that can meet people’s needs better than legacy systems. 

In the past year alone, Insight invested in Slice; a challenger credit card targeting new-to-credit users in India; GCash, a leading digital wallet in the Philippines; Flip, Indonesia’s leading and fastest-growing consumer payment platform disrupting the inter-bank transfer market;  Thunes, a global leader in enabling seamless and secure cross-border payments; and Qonto, a leading French neobank for SMEs and freelancers.

While consumers in emerging markets may gravitate towards products that provide faster and cheaper credit, we expect alternative payments products in the US and Europe to be more debit-driven.

We also predict that in 2022 we will continue to see Banking as a Service (BaaS) solutions make it easier for non-banks to launch innovative embedded finance products. Embedded finance – whether from a retailer, airline, or money management app – makes financial services faster, easier, and more readily available and convenient for consumers. It can also provide cheaper access to credit for millions of unbanked or under-banked people. In 2021, Insight invested in M2P, a leading fintech infrastructure platform in Asia and Pomelo, a card issuance company in LATAM.

As the fintech industry continues to pivot and expand with COVID-19 and other global factors, we look forward to supporting new entrants to the market and seeing where 2022 takes us.