Despite Challenges, Fintech Attracts Venture Capital

Financial technology (fintech) got caught up in the broader sell-off in the tech industry amid inflation fears, but the space is still attracting venture capital. This should set up an ideal growth play for fintech, making exchange traded funds (ETFs) like the Global X FinTech ETF (FINX C+) worth looking at.

“Despite the ongoing market turmoil and crypto market meltdown, long-term transformational trends in the fintech sector such as mobile trading apps and digitized financial services have continued to attract strong venture investment in 2022,” a PitchBook article noted.

“Fintech startups collected $53.5 billion in VC funding in the first half of the year, behind 2021’s pace but already surpassing 2020 totals, according to PitchBook data,” the article added.

Certain aspects of fintech are garnering interest, according to PitchBook. For example, decentralized finance and autonomous finance are building off the strength they saw during the pandemic.

“While some areas of fintech—such as neobanks and real estate lending platforms—are maturing and attracting more late-stage capital, other areas—such as decentralized finance and autonomous finance—have just begun raising early-stage institutional capital, according to PitchBook’s Q2 2022 Fintech Report,” PitchBook added.

With fintech opportunities pushing lower in the first half of 2022, there are potential value plays available in the space. Rather than hold various companies that focus on fintech, FINX can be an all-in-one solution for investors.

FINX seeks to provide investment results that correspond to the Indxx Global Fintech Thematic Index. The index is designed to provide exposure to exchange-listed companies in developed markets that provide financial technology products and services, including companies involved in mobile payments, peer-to-peer (P2P) and marketplace lending, financial analytics software, and alternative currencies, as defined by the index provider.

The fund gives investors exposure to:

  • High growth potential: FINX enables investors to access high growth potential through companies that are applying technological innovations to disrupt and improve the delivery of financial services.
  • An unconstrained approach: The fund’s composition transcends classic sector, industry, and geographic classifications by tracking an emerging theme.
  • ETF efficiency: In a single trade, FINX offers access to dozens of companies with high exposure to the fintech theme.

For more news, information, and strategy, visit the Thematic Investing Channel.

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