How to find the best FinTech companies to invest in

FinTech is the future for companies, business owners, and consumers. It allows for a better management of operations, processes for an automated delivery, and use for the financial portion. As our commerce is shifting, companies are picking up on how to improve the world’s  digital life. Most of us are familiar with FinTech companies such as Square and PayPal, and we use them every day whether we know it or not. This article will help you learn how to find the best FinTech companies to invest in.

A Quick Start Guide

Are you familiar with any financial tech companies currently? These companies oversee payment processing, online and mobile banking, person-to-person payments, real estate, and cryptocurrency, just to name a few. These have made our lives easier as we are all connected to the digital world. 

Some are strictly digital; we can make a payment with a tap or a press of a button. These companies seem to be popping up and FinTech is becoming a large market opportunity for digital payments. 

It is not always about the new companies though; some banks and businesses have stepped up their game and evolved with these new technologies making it easier and more efficient for consumers. 

When it comes to FinTech and our technology, everyone wants a piece of it.

Consider How Much and How Long to Invest

Are you new to investing but ready to jump in the water? Have some spare money you want to invest? Start with some you are familiar with. Square and PayPal are a couple of well-known companies. 

Square made it easy for small businesses to accept payments via credit card.  PayPal is a person-to-person payment service, but they have been moving toward purchasing companies that help complement their services. These have the potential to grow in the long term.

If you’d rather get into a company just starting out, you have plenty of choices, as well. Note that FinTech companies are high-growth stocks, and it’s important to consider the growing revenue.  Look back and see how it’s been doing for several quarters or even the fiscal year. A good investment has an established track record of consistent growth.

Consider your investment goals. Are you young and saving for retirement? Are you wanting to play it safe or risk a higher reward? There is no one size fits all solution but considering these will help you gain an understanding of what to invest in.

Research can pay off

Evaluate the balance sheet and a FinTech company’s competition. The balance sheet will show if the company is doing well on paper. The debt-to-income ratio is listed, and if the debt is down, it will be a safer bet. Not all companies within FinTech are profitable right away, but this is a good metric to see how the growth is progressing.

Research the competitors. What makes one FinTech stand apart from another? If they are all the same without a unique twist, this may hurt the support of a company later on. Is there a niche or is an already large company making a switch?

You must even look closely at yourself because as new and exciting as the FinTech world can be, there are sure to be ups and downs in the market. Evaluate your personal goals and how long you want to invest.  

Where to Find FinTech Stocks

There are marketplaces such as Finnovating that will match investors with up-and-coming FinTech companies. Seed Invest is another that helps investors find companies that need backing for vetted ideas or products. Marketplaces provide a place for investors to have all the information in one place and decide which stocks can help them meet their goals yet provide funding for startups.  

FinTech is the new and upcoming sector in the market which came shining in the mists of the COVID-19 pandemic. Our move to the usage of mobile devices for everything has also helped e-commerce sales soar. Not only are we talking about financial services, but under its umbrella we have real estate, tax companies, cryptocurrency exchanges, and betting.  If you’re wondering how to find the best FinTech companies to invest in, do your research! Many business models are adapting, and you may find some hidden gems for investors.