FinTech consolidation trend: Want more attention from potential acquirers?

The FinTech sector continues to see start-ups being founded every year and investor interest shows no sign of slowing down. According to KPMG, VC investment in the sector increased by more than 100% in the last two quarters of 2020. A record-breaking $98 billion in fintech investment was recorded in the first half of 2021. This includes mergers and acquisitions, VC and private equity investments.

The consolidation trend  

With the FinTech sector increasingly growing and maturing and more start-ups being launched, we are expecting to see continued consolidation. FinTech acquisitions happen for a number of reasons, including:

  • Competition – with the market becoming more competitive, M&As can be a solution for start-ups to succeed in a crowded market.
  • Added resources – acquirers can tap into new resources such as talent, technology and customers.
  • Start-up founders wanting to recoup their investment or make more money and possibly move on to form another company.

At Moonlight, we have seen this trend with numerous clients, across different sectors – FinTech, RegTech, technology, etc. In our 20 years+ of experience in the FinTech communications space, we have worked on many acquisitions. This is one of the paths start-ups generally consider as an option for their journey. However, the question of how a start-up gets on the radar of big companies still needs to be answered.

The path to exposure for FinTech start-ups

The journey of getting noticed by potential acquirers naturally starts internally. You will need to have market knowledge and products that solve real pain-points, but you must extend to external communications. For FinTech markets, it can be challenging to know how to distill information and present the benefits to clients without external help. Building a strong brand reputation within your industry can help open doors for both acquisitions and partnerships. This needs to be supported by marketing strategies:

  • Developing clear messaging – the start of any external communications strategy is clearly defining your company’s USPs and benefits to users. It is surprising how many FinTech companies fail to communicate the true benefits of their products, instead choosing to focus on capabilities (we will explore this topic more in depth in a future blog post).
  • Collateral review / creation – the messaging should inform all collateral such as the website, logo, one-pagers and beyond. For companies that already have some of these in place before they work on their messaging, a thorough review needs to be performed, followed by alignment of all content with the outcomes of the messaging session.
  • Social media – in the digital world, social media needs to be part of the any company’s communications. For B2B businesses, LinkedIn and Twitter can be very powerful tools for engaging with potential clients, partners and industry media, as well as prospective buyers, and showcasing your company’s values.
  • Leveraging public relations – specialist FinTech PR and communications companies can very quickly grasp technical concepts. We can transmit the necessary information to your target audience through media outreach, increasing brand awareness through coverage.
  • Participating in industry events and conferences – this includes panel discussions, speaker slots and having a stand at trade shows. Attending relevant events is a great way to network, getting in front of acquirers, possible partners, and potential clients.

The importance of clear communications

For companies to be able to effectively attract clients, partners and acquirers, a clear message is vital. Clarity of communication and targeted media relations will make the difference between successfully building brand reputation and visibility in your sector or fading away into the ‘crowd’.

A communications strategy driven by a company’s USPs and benefits is most effective in placing a FinTech start-up in front of potential acquirers. An all-encompassing strategy – social media, events, awards, public relations, etc. – helps shape brand perception. This means the industry is able to know who you are and what you do.

Due to the very technical and niche nature of the financial sector, we know it is not always easy to find communications specialists who understand what you do. If you are ready to launch or improve your brand, we are here to put our experience to work for you.

Contact us here to learn more about our start-up package.