One of the biggest winners of the new global economy is the FinTech industry. It is becoming increasingly digitalized, with more personalization of services, which also creates more value even in traditional sectors like the financial sector. Jorge Zuñiga Blanco, an eCommerce and business strategy expert, explains why business growth is different when FinTech is involved.

FinTech companies combine the efforts of both new technology and continuous innovation to provide innovative solutions to improve business management. They often create new ways to do business, often with disruptive and revolutionary approaches.

FinTech entities were only associated with startups that had at least one entrepreneur behind them. They had an idea, but did not have enough liquidity to allow them to continue developing their projects for long periods of time without needing to access external financing. These firms often went bankrupt because they didn’t have enough cash flow or the ability to communicate with potential customers.

Today, FinTech companies are more common than ever. They are established in their respective sectors and engaged in growth phases or direct internationalization. There are also other collaborations with large banks, even if they do not belong to a large financial group. These companies have access to different financing options, which has been a positive thing for them all. It gives them many different ways to capitalize while society is more open to innovation.

Entrepreneurs who are focusing on a disruptive model for their startup have always considered it a risky investment. They often had to resort to traditional methods, such as attracting private investors (often acquaintances) and using a bank credit card line. Zuñiga states that the luckier entrepreneurs might be able to get venture capital firms interested in their project. However, this is not a common reality.

The business angel is a well-known figure. They provide capital as well as advice and experience. This is especially important for startups in their early stages. The Internet has allowed for alternative investment forms, such as crowdlending and crowdfunding. These can be beneficial in attracting new specialists to the entity while allowing it to expand organically to other international markets. All this while communicating to all stakeholders that the company’s growth is digitally enabled, transparent, and autonomous.

Zuñiga explains, “The recent Securities Market Law Reform Bill looks set to give a major boost for Special Purpose Acquisition Companies, which are firms that go public but don’t own assets. They do this because they want to raise capital from investors to buy unlisted companies.”

These bought-out entities are able to take the position of the acquirer on the market and complete an alternative route to the listing. They also have greater flexibility as they don’t need to go through as many controls. Companies in the early stages of their development or growth are especially reliant on SPACs for quick financing.

FinTechs have new financing options that enable them to access liquidity and gain greater knowledge. This allows them to grow faster and position themselves with subjects of interest that will add value to their business model.

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