A crash course in fintech

Until a few months ago I thought that the fintech startup ecosystem in Spain was barren. No Spanish city is a world financial hub (not even a regional financial hub). The main players are big and international, true enough, but they tend to be on the very conservative side of things. My industry knowledge consisted, to a very large extent, on my reads about Yaap Money, the joint initiative by three mammoths (CaixaBank, Santander and Telefonica) in the P2P payments/Mobile payments industry. And I also had a chance to meet and admire Kantox, one of Europe's coolest and hottest startups that last year went past the EUR 1Bn mark in traded business.

That was until a few months ago.

In yet another example of the butterfly effect applied to business, events started to happen one after another, I started to get acquainted with people and companies linked to this industry, and I could see that there is a thriving fintech community with very interesting concepts and ideas.

Part of the Spanish investor scene will naturally shun from investing in fintech due to one or more of the following reasons:

1. Regulatory environment
2. Big dominant players
3. Need to spend marketing money for B2C growth
4. Intrinsic fear about the industry due to lack of knowledge

But I came to know Finnovista which is an organization that aims at dynamizing and grouping the Spanish fintech industry. Its managing partner, Fermín Bueno, was kind enough to spend some time with me on the phone talking though the fundamentals of this industry.

I also met and talked with two startups with radically different concepts. Cashually is a cool P2P payments app, with a strong concept, a launched project and it is starting to get client and top line traction. NoviCap operates out of the UK but it has started its operations in Spain with the aim of disrupting the very rancid factoring industry by effectively creating a new asset class and selling it through a very low friction process.

The conversations with Cashually's founders (Sergi Gilart and Alex García) as well as with Novicap's CEO, Federico Travella, have been extremely insightful and have convinced me that, definitively, something is moving in the industry. NoviCap has also been able to leverage on the excellent accelerator/incubator infrastructure in London for fintech startups (such as the Barclays Accelerator or Level39).

At the end of March the fintech community met in Madrid for the RFIx 2015 conference which is the sancta sanctorum for the receivables industry. Alongside with traditional players there were also some disruptive companies like Tungsten which is another fintech solution to optimize the cash tied in with your accounts receivable.

When it finally seemed that I had got some industry exposure, I became overexposed as we did some research for my finance course at EAE Business School when some students asked me for advice for their project of starting up a niche peer-to-peer lending / payslip borrowing platform. In this subindustry we find Spain's two other fintech Godzillas (Yaap Money permitting): Digital Origin (fka Newbanq) where Prime Ventures led a massive EUR 15 MM series A in early 2015. And Peertransfer where Bain invested USD 22MM also in early 2015 (Peertransfer works the college payments industry).

The European payments industry meets in May in Marbella and we can expect a mix of traditional and disruptive players. The investor community needs to be more gregarious and less shy. Money needs to flow with some more generosity. But cool stuff is happening in Spanish fintech.