- The 2018 EY FinTech Australia Census finds one in five fintechs are now profitable, compared to only one in seven last year.
- Median revenue growth of 125% on last year.
- 43% of Australian fintechs are now over three years old and more than half are considering overseas expansion.
MELBOURNE – Australian fintech revenues are up 2.25 times and more of the startups have hit profitability as the local sector matures, according to the latest EY Census released at the FinTech Australia Intersekt conference.
Almost one in five (19%) fintech companies are now profitable with those aged three years or older now making up 43% of the local industry, up from 31% last year and just 20% in 2016.
The 2018 EY FinTech Australia Census, now in its third year, paints a picture of a sector now established and coming into its own as an alternative within the financial services landscape.
The census, based on an online survey of 151 fintechs across Australia, as well as 12 interviews with fintech leaders between August and September 2018, is the only industry-backed analysis of the Australian fintech industry.
“In the three years since our inaugural Census, we have seen significant growth and a developing maturity within the Australian fintech ecosystem,” says Meredith Angwin, Ernst & Young Australia’s FinTech advisor.
“The outlook among the fintech founders we spoke to this year is positive and bullish.”
The majority (83%) of post-revenue fintechs believe their company will grow in revenue over the next 12 months.
More than half (54%) fintechs surveyed said they were planning to either expand or further expand overseas in the coming year, with the UK (52%), US (38%), Singapore (30%), Hong Kong (30%) and New Zealand (27%) their top targets.
“With fintechs increasingly focused on expansion, it’s positive that over the last year we have also seen an increase in the amount of capital and level of funding available,” says Angwin.
Most fintechs in Australia have received private funding (70%) and six in 10 (63%) have also accessed commercial funding.
Alan Tsen, the chair of FinTech Australia, says the industry is proud of what has been achieved across many policy areas such as equity crowd funding, open banking, comprehensive credit reporting, and the removal of double GST for digital currency.
“The role that we and our leading fintech trailblazers have played in these policy areas has been significant in shaping the financial services landscape we have today,” he says.
“Equally important is the increase in female participation among fintech firms, with this rising to 28% – an increase of 4% in just 12 months.
“While this momentum is pleasing, and the number of notable female founders and co-founders of Australian fintechs is a testament of the attractiveness of start-up businesses, there is still a way to go.”
Other key findings from the EY FinTech Australia Census include:
- 67% of fintechs surveyed expect to add employees in the next year.
- 68% of fintechs are now post-revenue.
- Average capital raised to date is $4.5 million (an increase from $4.1 million in 2017 and $3.9 million in 2016).
- Australian fintech companies have an average of eight full-time and two part-time employees.
- 45% of fintechs agree that attracting qualified or suitable talent is a challenge, with the top three shortages relating to roles in engineering/software (77%), design/user experience (36%) and sales (33%).
- 68% agree accelerators/incubators are important contributors to the success of the sector.
- The top three types of fintech companies in Australia are: payments, wallets and supply chain (24%); wealth and investment (23%); and data, analytics and/or big data (21%).
- 80% of fintech offerings involve B2B distribution and 16% involve B2C only models.
- Australian fintechs see their biggest competitors as incumbents (37%), followed by other local fintechs with a similar offering (27%) and overseas fintechs (23%).