Financial technology (FinTech) is a rapidly growing segment of the broader financial sector, and the revenues generated by companies in this sector can be significant. BCG estimates that the global fintech market will reach $1.5 trillion in revenue by 2030.
Of course, this is just an estimate, but it’s a good indicator of why companies are competing to be on the cutting edge of new technology. fintech service. Here are two companies that are already well-positioned as fintech grows. Sofi Technologies (NASDAQ:SOFI) and paypal (NASDAQ:PYPL). Here’s why:
SoFi has expanded rapidly in recent years, adding new services and financial products that now include loans, investments, checking and savings accounts, loan refinancing, credit cards, and even estate planning .
To put SoFi’s growth into perspective, consider that at the beginning of 2020, the company had over 1 million members. In December, it announced it now has more than 1 million members. 10 million Membership — Membership has increased 9x in just 5 years.
SoFi’s strong membership base has resulted in impressive financial results. The company reported a 30% increase in revenue to $697 million in the third quarter of 2024, and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased 90% to $186.2 million.
SoFi stock has risen significantly over the past six months, up 137% at the time of writing. This increase has increased the premium for SoFi stock, which now trades at a forward price-to-earnings ratio of 74 times. This is expensive no matter how you look at it, but it may be wise for long-term investors to start with a small position. Owning part of a fintech leader.
While some investors may overlook PayPal when looking for fast-growing fintech companies, this leading fintech company is likely to grow even further. The company’s person-to-person payments app, Venmo, is a great example of how PayPal is aggressively eyeing new growth areas. Venmo is one of the leading payment apps, with an estimated 88 million users, up from 52 million in 2020.
PayPal’s third quarter 2024 revenue increased 6% to $7.8 billion, and non-GAAP earnings increased 22% to $1.20 per share. The company also ended the quarter with free cash flow of $1.4 billion and cash and cash equivalents of $16.2 billion.
The company’s 432 million users worldwide are a testament to PayPal’s leading position in the fintech space. The 9% increase in total payment volume in the third quarter to $422.6 billion proves that the company knows how to keep users using its payments platform.
