NYCA Partners, a New York based venture capitalist firm, announced its closing of the latest venture capitalist fund (125 million dollars) aimed at backing financial technology startups. The company continues to seek out the latest Silicon-Valley startups to make a quick penny in such an aspiring industry. Following its initial $30 million backing in 2014, the firm has continued its growth while providing financial support for a number of companies, including a few public ones. The first wave of financial technology was focused on building brand name products and services, but now the hype is around partnering with local startups to find the newest technology.
I find this topic very interesting and relevant given how common startups are around the Silicon Valley. The upward trend in large investments is very fitting given how much such technologies and ideas can sell for. While, the article did not go into specific details about the companies they have backed in the past, I am interested to research the sort of returns that its investors have received. While, 125 million dollars may sound like a lot, I expect this number to keep rising at exponential rate in the next few years.
http://www.reuters.com/article/nyca-fundraising-idUSL1N1FH01U
I agree with Trevor that this is only the beginning of increasing venture capitalist spending on the fintech industry. In the post-crash era, fintech startups really started to create a buzz and hype, but have now also shown that they can last and are here to stay. In this way, it makes sense that venture capitalists are seeing this opportunity and moving in on it in, looking for the next big break in fintech.
In the long term, I see this industry consolidating up to a couple of companies that innovate and offer fintech that is the most efficient and effective, so we will surely see a lot of investment in the industry, but many companies are also likely to fail in their infancy due to the high levels of competitiveness we will see.
It will be interesting to see what sorts of companies are able to service the infancy phase that Kabir is referring to. I believe that many of these fintech startups have goals of simply creating a valuable product in hopes of being acquired by a larger firm.