The FinTech sector has seen many startups come on to the scene, and these firms are coming with new solutions for commercial and retail clients. These startups are usually backed by large investment pools even when there is no evidence of them being profitable and there is no track record of them being a safe investment.
One example of such startups is Numbrs Personal Finance, a Swiss FinTech company that has recently entered the market. The firm has attracted a large sum of investment. In the most recent round of investment, the company received $40 million, and the total invested in it has come up to about $200 million. One of the most prominent individuals who have invested in the firm is the former CEO or Deutschland Bank, Josef Ackermann.
Numbrs and investors’ confidence
Numbrs provides a service that has become popular in the FinTech industry. The company has an application through which users can manage their bank accounts in a single app. It also gives a user options to buy a variety of financial products. Such an app brings convenience to banking because one doesn’t need to access several different apps for their different bank accounts. The direct access to financial options from an app is also a service that will intrigue a lot of investors.
After the last investment round, there are over 50 investors that have put their money into Numbrs. Individuals and families alike have shown confidence in the startup and poured their money in it. Martin Saidler, CEO of Numbrs, said that the last investment round attracted old and new investors. This large pool of investors seems to have a lot of confidence in Numbrs because they are putting in significant amounts of money in a company that has just come on to the scene.
Numbrs not yet profitable
Although all these investors have come in and chipped in with their funds, Numbrs has not generated any profit to date. The app has been running since 2014 in Germany and Saidler says that they aim to break even in 2021. For a company that has not generated any profit in 5 years, the eagerness investors have to put their money in it is confusing. The firm hasn’t been tried and tested and yet, investors are flocking to provide their funds.
Companies that provide services similar to those offered by Numbrs are supposed to be challenging banks and financial institutions that provide their clients with financial options to buy. It is yet to be seen whether such services will become more popular than traditional banking services.
Numbrs has been dubbed a $1 billion unicorn which is the future of financial technology. Time will tell whether Numbrs is actually a great investment that will bring significant profits to its investors or its just another firm that will fall off once investor funds dry up.