Publications

Notwithstanding the emergence of FinTech startups in the financial services industry, most of these companies face significant difficulties in breaking even and surviving. This study examines the main managerial, institutional, and financial drivers of FinTech profitability and the time it takes for these firms to break even. The database includes relevant qualitative factors, such as foundational characteristics, the technological profile of the startup, and its funding structure. Using the full population of FinTech startups operating in Spain from 2005 to 2017, we observe that most of these firms are unprofitable within three years of their inception. Combining panel data and survival analyses, we empirically find that large and solvent FinTech firms founded by single entrepreneurs in an incubator or accelerator program are more likely to be profitable and prevail. FinTech firms reach their break-even points faster if they receive funding through seed capital.