{Note: This post originally appeared at Wired Insights.} Before Mint, financial technology was an afterthought in the reviving Silicon Valley startup scene. Then, in 2009, two years after launching on top of our platform, Mint boasted 1.5 million users and attracted an acquisition of $170 million; that same year, Credit Karma received $2.5 million in Series A funding. Recently, Credit Karma announced $85 million in Series C -- one of the largest rounds for a financial technology company ever. 
Credit Karma's news is a marker signifying the next wave of financial technology that promises to be five times the size of Mint. Mobile payments are expected to reach $90 billion in transactions by 2017, small business solutions like Xero that recently raised $150 million are booming, and over $74 million was invested in startups to utilize Bitcoin. In the not so distant future, many financial technology startups will scale and boast user bases in the millions – something seemingly unfathomable only four years ago. Why now? A number of factors are laying the foundation for this rise:
- The automated, secure flow of financial data streams makes it possible for services to connect users’ financial accounts for all types of purposes.
- For the first time, the proliferation of mobile devices is putting banks, lenders, financial advisors and the like in the back pocket of consumers for any financial decision they make.
- Consumers are more willing than ever before to entrust and share their financial data with third party services.
- The reduced cost of building applications and services is enabling developers to grow their product’s user base without needing to reach a deal with banks directly, which can take years to finalize.
In light of Credit Karma’s funding, I thought it worthwhile to point out five other “future Credit Karma” companies that will grow to five times the size of Mint—and further solidify the burgeoning of this space. Xero Already, the New Zealand-based cloud accounting business is valued at $4 billion. Since the company went public over a year ago, the stock has grown by close to 300 percent. The company’s first 50,000 users took five years to obtain, but in just the last year the company has added 115,000 more. Last October, the company raised a whopping $150 million dollars to fund its US expansion where it has tremendous room for growth, as it takes on Quickbooks. OnDeck Like Credit Karma, OnDeck is a veteran financial technology that launched in 2007 and has raised significant funds (recently announcing a Series E of $77 million). The alternative lending company provides loans to small businesses and in 2013 reported a 150 percent growth of customers. This month the company expects to have distributed $1 billion in total capital to small businesses since its launch. BillGuard BillGuard is saving consumers millions ($50 million to date, to be exact). The first data-driven personal finance security service helps consumers identify misleading, erroneous and unauthorized credit and debit card charges. Last November, the company reported it was growing by 2,500 users per day over a three-month period. At that rate, they’ll be close to a million users by the same time next year. Remember, Mint only had 1.5 million users when it was acquired. Coinbase Just a month after receiving the largest sum of funding for a Bitcoin startup ($25 million led by Andreessen Horowitz), Coinbase announced a partnership with Overtstock.com. One month later, Overstock is already on pace to see $20 million in Bitcoin sales, almost twice as much as they predicted originally. Also encouraging for other e-commerce sites, Overstock discovered that consumers paying with Bitcoin spent on average 34 percent more than customers using credit cards. Meanwhile, Coinbase’s customers are growing rapidly: the company shares its user base numbers publicly and NewsBTC noticed that within one week in February the company had added 30,000 accounts. Personal Capital Led by former PayPal CEO Bill Harris, Personal Capital has the pedigree and traction to lift the company to the next level. The company recently announced that it’s seen huge growth of assets in management upwards of 10% month-over-month, which, if it continues, would equal over a billion in total by the end of 2014. Each of these companies is seeing tremendous traction. Consumers are now looking outside of banks for ways to manage and deal with their financial decisions. In the last five years, there’s been a surge in development for financial services across dozens of verticals including wealth management, small business, personal finance, credit and more. The relatively low overhead cost, with reduced cost of cloud storage and online marketing, has made it possible for these companies to grow without first finalizing a deal with banks to help with distribution. Additionally, each of these companies has created a simple solution addressing a single problem, which is important because of the anxiety and burden that consumers associate with introducing third parties to handle their finances. Agree? Disagree? What other financial technology companies are set to take off? Please leave your ideas in the comments section below. Joe Polverari serves as chief strategy and development officer of Yodlee, and as the General Manager of Yodlee Interactive.
