Portugal Fintech Report: Top 30 Fintechs and First Unicorn
by Fintechnews Switzerland December 3, 2021Portugal’s fintech industry had a fructuous year 2021 as it welcomed its first fintech startup unicorn and new regulatory development in the booming digital asset industry. Although the country is steadily rising as a startup hub in Europe, several challenges are still hampering the growth of the fintech sector, including the lack of tech talent, according to a new report by industry trade group Portugal Fintech.
The report, titled Portugal Fintech Report 2021, presents an overview of the industry’s progress and main trends, gives a mapping of the top Portuguese fintech companies and shares findings from a survey of these market leaders.
According to the report, the Portuguese fintech industry grew in 2021 as regulators continued to be active in the fintech space. 2021 saw Banco de Portugal issue operating licenses to two cryptocurrency exchanges in the country after announcing that it would start ensuring the regulation of cryptocurrencies.
The year also saw Portuguese financial regulators run the third edition of Portugal FinLab, a program aimed at establishing an accessible communication channel between entrepreneurs and emerging companies and the regulators, and supporting fintech companies in navigating legal and regulatory challenges.
The Portuguese government is currently studying and drafting cross-sector and primary legislation for so-called Technology Free Zones in a bid to facilitate both innovation and experimentation.
Portuguese fintech startups in 2021
In the startup ecosystem, Feedzai became this year the country’s first fintech unicorn startup after raising US$200 million in a Series D funding round. Feedzai provides banks and other financial services companies with artificial intelligence (AI) tools to spot and fight fraud.
Feedzai reaching a billion dollar valuation is reflective of broader fintech funding trends observed this year where startups in the cybersecurity and regtech spaces were favored.
A survey of the top 30 Portuguese fintech companies selected by Portugal Fintech this year shows that cybersecurity and regtech was the top vertical with regards to funding in 2021, making up for 60% of investments, followed by blockchain and cryptocurrency (27%), and insurtech (8%).
Fintech funding trends in 2021, Source: 2021 Portugal Fintech survey
The survey asked Portuguese fintech startups to share their views on key topics including access to capital, the job market, as well as policy and regulation.
Fintech professionals shared challenges in hiring tech talent, especially engineers. In terms of seniority, it was found to be more difficult to find people with about five years of experience.
Most founders (65%) believe there aren’t enough developers in Portugal to fulfil the demand, and 54% expect the cost of talent is expected to increase more than 1.5 times.
The job market, Source: 2021 Portugal Fintech survey
When it comes to regulation, 32% of respondents said accessibility to policymakers increased this year. Overall, 44% of respondents indicated that regulation has had a positive impact on their fintech company.
Policy and regulation, Source: 2021 Portugal Fintech survey
Top Portuguese fintechs of 2021
Out of the top 30 Portuguese fintech companies selected by Portugal Fintech, 27% operate in the payment and money transfer segment, 17% focus on lending and credit, and 17% are insurtech startups.
Top 30 Portuguese Fintech Startups, Source: Portugal Fintech Report 2021
82% of these companies are headquartered in Portugal like insurtech startup Kooli, which was named by Forbes one of top Portuguese startups in 2020; 13% are headquartered in other parts of Europe like Elucidate, a financial crime risk quantification platform headquartered in Berlin; and 6% are headquartered in the US like Feedzai and Anchorage Digital, the first crypto federally chartered bank in the US.
The report also identifies six emerging fintech startups in Portugal. These startup were founded this year and are worth keeping an eye on, the report says.
Yoonik, for example, has developed a proprietary facial recognition technology that can be used in different sectors where identity is relevant including payments.
ExxoTrade is a sustainable finance platform that connects companies with key players in one ecosystem, allowing trades to be easier, faster and more secure for financing and payments.
Anachron Tech provides ready-made APIs and no-code templates to allow financial companies to launch their own fintech products such as robo-advisors and financial planning tools quickly and on a pay-as-you-go model.
Reflora works with companies and forest conservation projects to transform sustainability costs into investments
RM Analytics is a software-as-a-service (SaaS) platform for asset managers that builds data-driven recommendations to create environmental, social and government (ESG) portfolios.
And Zharta is creating a platform for users to request loans in real time using their non-fungible tokens (NFTs) as collateral.
