Arguably one of the most exciting industries on the share market at the moment is the financial technology or fintech industry.
A number of companies have emerged in the last few years, aiming to disrupt certain areas of the financial industry.
Three fledgling companies which I believe have accomplished this and are well positioned to profit are listed below.
Afterpay Touch Group Ltd (ASX: APT)
This payments company recently revealed that its underlying annualised sales are now tracking in excess of $1.5 billion based on its recent monthly performance. I expect this could accelerate over the Christmas period as more retailers come on board and consumer adoption heightens. Ultimately, I feel confident that Afterpay is here to stay and will only get stronger in the future, though investors ought to keep a close eye on its bad debts in future results.
Class Ltd (ASX: CL1)
In its most recent update this self-managed superannuation fund (SMSF) cloud software provider advised that it has grown its market share to 25% of the estimated 598,000 SMSFs in Australia. As impressive as this and its retention rate of 99.4% is, it evidentially wasn’t enough for the market. Since then its shares have sunk over 34% lower and sit just a few cents above their 52-week low. Class was trading on quite a lofty multiple previously, so this correction was probably justified. But with its shares now trading on a more reasonable valuation, I feel it could soon be worth a look again.
PUSHPAY FPO NZX (ASX: PPH)
I have been very impressed with the progress this payment solutions company has made in the U.S. church donation market. Pushpay recently reported a 145% increase in half-year revenue to US$29.7 million. This was driven largely by the winning combination of a 35% increase in customer numbers and a 46% increase in average revenue per customer. Although it still made a loss, management aims to breakeven on a monthly cash flow basis by the end of 2018. I think it will be one to watch next year.