In the current day and age, the startup ecosystem has brought in a new wave of innovation into the world of business. Across industries, technocrats/businesspeople/domain experts are now working together to explore and solve hundreds of pain points associated with the traditional way of doing business. Financial services industry is no exception as it continues to witness the exponential rise of FinTech startups.
Every year, thousands of FinTech startups are founded around the world across 50+ sub-segments, democratizing innovative technology and improving the experience with the financial services industry for billions. Many of these startups are getting significant traction from both consumers and banks/incumbents. However, one of the biggest challenges these startups have to face on their quest towards scale is funding.
Funding is one of the most (if not the most) important drivers of a startup’s growth. While there has been a significant democratization of financing[1] with crowdfunding, debt, grants, ICOs, etc. coming into the radar, VC funding continues to remain a big frontier for these startups. At MEDICI, as we continue to track 11,700+ FinTech startups and monitor their growth, we see a major trend in startup financing patterns: the number of founders in any startup has a significant correlation with their funding.
Our analysis of 11,700+ FinTech startups, out of which 4,000+ are funded, revealed that a two-founder startup has an almost 2X success rate of getting funded (50.8%) than a one-founder startup (25.6%). The likelihood of getting funded continues to grow even further for 3-4 founder startups (60%). However, as the number of founders increases beyond five, the success rate of the startup getting funded tends to decrease.
Another interesting trend
