Financial technology (fintech) is a fast-growing segment of the broader financial sector, and revenue generated by corporations on this space might be massive. Estimates from BCG put the worldwide fintech market at $1.5 trillion in sales by 2030.
That is just an estimate, after all, but it surely’s a very good indicator of why corporations are competing to be on the innovative of latest fintech services. Two such corporations which might be already in a very good position to learn as fintech grows are Sofi Technologies (NASDAQ: SOFI) and PayPal (NASDAQ: PYPL). Here’s why.
SoFi has expanded quickly over time, adding recent services and financial offerings that now include loans, investing, checking and savings accounts, loan refinancing, bank cards, and even estate planning.
To place SoFi’s growth in perspective, consider that the corporate had over 1 million members initially of 2020. In December, it announced that it now has greater than 10 million members — a 9x membership increase in only five years.
SoFi’s strong membership base has translated into impressive financial results. The corporate increased sales by 30% in 2024’s third quarter to $697 million, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped 90% to $186.2 million.
SoFi’s stock has been on an enormous run over the past six months, rising 137% as of this writing. The gains have driven up the premium for SoFi’s shares, which now have a forward price-to-earnings (P/E) of 74. That is expensive by any measure, but starting a small position might be smart for long-term investors who wish to own a chunk of a fintech leader.
Some investors may overlook PayPal when looking for fast-growing fintech corporations, but this huge fintech player likely still has more growth ahead. The corporate’s person-to-person payment app, Venmo, is an awesome example of how PayPal is willing to look to recent areas for growth. Venmo is considered one of the leading payment apps, with an estimated 88 million users, up from 52 million in 2020.
PayPal’s revenue rose 6% in 2024’s third quarter to $7.8 billion, and its non-GAAP earnings spiked 22% to $1.20 per share. It also ended the quarter with $1.4 billion in free money flow and $16.2 billion in money and money equivalents.
The corporate’s 432 million global users are a testament to PayPal’s leading position in fintech. Its 9% increase in total payment volume in Q3, to $422.6 billion, proves that the corporate knows how one can get its users to proceed using its payment platforms.