Fintech Families: The New Generation Driving Global Innovation
The rise of “Fintech Families” highlights a new generation of fintech companies whose alumni are driving global entrepreneurship and innovation, creating ecosystems that will shape the future of finance.
In the world of startups, stories of influential groups like the “PayPal Mafia” have become legendary. This group of PayPal alumni, which includes notable figures such as Elon Musk, Reid Hoffman, Peter Thiel, and Max Levchin, went on to create and lead some of the most impactful companies of our time. Similarly, Silicon Valley owes much of its origins to another influential group, the “Fairchildren” — founders who emerged from Fairchild Semiconductor. According to the Computer History Museum, while Fairchild’s market valuation peaked at $2.5 billion, the combined value of its offshoot companies has been estimated at over $2 trillion.
In “Out-Innovate” (HBR), I explored the rise of emerging market mafias, highlighting the influence of first-generation leaders like Mercado Libre in Latin America and Aramex in the Middle East. A recent study by Gilgamesh Ventures and the Wharton School of Business expands on this idea, focusing specifically on fintech. The results are eye-opening, revealing a phenomenon they term “Fintech Families” — a new wave of fintech powerhouses driving global entrepreneurship.
Unpacking the Fintech Families
The study identified 15 fintech companies, coined “Fintech Families,” that have generated a remarkable number of founders. These companies, all founded post-2000 with revenues exceeding $250 million, have collectively produced nearly 3,000 founders across the globe.
Included in this list are well-known entities like Square, Stripe, and Robinhood, as well as Latin American powerhouses such as Mercado Libre and Nubank. However, it’s not just the number of founders that stands out — it’s the significant impact and innovation of the companies these founders are building. A deep dive into the backgrounds of these founders reveals that 50% originated from product and engineering roles, with a significant number also coming from strategy and business operations.
Interestingly, these founders often venture into new sectors, highlighting the versatility of the skills and mindset cultivated at leading fintech firms. The ability to transfer knowledge and adapt to new industries is a testament to the robust foundation these Fintech Families provide.
The Making of a Fintech Family
What makes a Fintech Family? While there’s no definitive formula, the research points to the importance of strong brands. Companies that attract top talent and establish nationally or internationally recognized brands become fertile ground for future founders. Additionally, sufficient liquidity events — like secondary tenders or IPOs — play a crucial role by providing the financial freedom for experimentation and enabling peer angel investment.
Not all companies have the same impact in creating startup mafias. Power laws dominate the startup world, with outlier venture capital (VC) funds often driven by exceptional startups. Similarly, certain companies are exceptional in producing startup mafias, while others are surprisingly absent from the list, such as Shopify from Canada or UiPath from Romania.
The Implications
This research highlights the importance for investors and entrepreneurs to actively build relationships with key talent within these startup ecosystems. Many of today’s top founders honed their skills at successful fintech startups, and the resilience of Fintech Family alumni is particularly noteworthy. Despite recent economic challenges, 2023 saw the highest number of new fintech companies founded by alumni from these firms.
For aspiring founders, the message is clear: joining a leading technology company can offer invaluable experience, networks, and inspiration for future ventures. These companies provide domain expertise, and research suggests that the most successful founders tend to be older, more experienced, and deeply knowledgeable about the problems they are solving.
What’s most exciting about the research is that Fintech Families are not only creating successful companies but also fostering ecosystems of innovation that will shape the future of finance. As many of these companies are still relatively young, the real wave of innovation from these alumni networks may still be on the horizon.
