New EY industry census finds fintechs are rapidly growing their revenues
Australian fintech revenue jumped 200% this year but fintech companies are still burning $110,000 a month – a new industry census by consultancy EY has found.
Australian fintechs are growing their revenue, with the average fintech company enjoying a 200% revenue bump, a new report by consultancy EY has found.
But while fintechs are growing, they’re also burning through cash, with the average fintech burning $1.3 million a year.
Key findings of the EY 2017 industry census:
“One in seven fintechs stated that they are currently profitable,” the study said.
“Of those that have not started to realise profit, their current burn rate is on average $115k a month. This is an increase in what was seen last year where the burn rate was $84k month.”
The report, entitled FinTech Australia 2017, surveyed 166 fintech companies across the country. It found that the industry was heavily skewed towards New South Wales and men, with 54% of the industry having its base in NSW and 75% of industry staff being male.
As well as revenue, fintech companies are also growing customer awareness, with the survey finding "rapidly growing usage" of fintech. This was particularly true among young Australians, who are more trusting of and able to use new technologies.
Attracting talent, particularly in software and engineering, is still the major challenge for fintech companies, with half of all companies saying they were struggling.
“While emerging government initiatives such as the STEM pathway and entrepreneur visas are likely to assist in the future, talent is mainly recruited through contacts formed by fintech co-founders, however as fintechs mature reliance on recruitment agencies increases,” the report said.
In terms of policy, fintechs overwhelmingly want more government investment in research and development. Fintechs hope more R&D spending will improve their technology and their platform. Another major issue was taxes, with 80% of fintechs wanting them lowered -- particularly capital gains and payroll tax, the report found.
FinTech Australia’s president Simon Cant said the report results illustrated that Australia’s fintech industry was increasingly becoming the first choice of financial services for many Australians.
“The fact that the industry has experienced a tripling in median revenue is a strong sign that fintech firms are acquiring customers and making strong inroads into the traditional financial services sector,” he said.
“This year’s results though show that Australian fintech has really started to come of age, with substantial increases in the proportion of fintechs that now post revenue as well as those that are planning international expansion.”