San Francisco is a leading financial technology hub in the world and home to Silicon Valley. Most cities including London, Singapore, and New York became fintech hubs largely because they had an established financial services sector which then attracted technology innovators. However, with San Francisco fintech hub, it is the availability of cutting-edge technology innovations that have attracted financial technology innovators to the city.
The growth of Silicon Valley and by extension, San Francisco as a technology hub can be traced back to 1939 when Professor Fredrick Terman encouraged two Stanford University alumni, David Packard and William Hewlett to set up an electronics garage in Palo Alto. The place would later be dubbed, “the birth place of Silicon Valley” with the garage growing into a global electronics company, Hewlett-Packard Limited.
In December 1947, Dr. William Shockley, Dr. John Bardeen and Dr. Walter Brattain successfully demonstrated the first transistor made of Germanium. In the same year, Professor William Hansen successfully demonstrated an electron linear accelerator prototype. The following year, construction of a microwave laboratory in Stanford University began. By 1970, several semiconductor and integrated circuits startups had been established in Santa Clara Valley.
Today, Silicon Valley is the home to 39 fortune 1000 businesses in addition to attracting a third of all venture capital investments in the U.S. every year. Global tech giants, Google, Apple, and Salesforce are all located in San Francisco. Additionally, there are over 17,000 angel investors in the city, creating a huge potential for the continued growth of the fintech sector. Currently, San Francisco has the largest fintech talent pool in the world, ahead of London.
Today, some of the largest fintech firms in San Francisco are:
1) Stripe
Stripe allows merchants to process credit cards from their PCs or mobile platforms using some code lines. Stripe has attracted over $ 300 million worth of investments.
2) Credit Karma
Credit Karma is fintech company offering users free access to credit scores and reports. The platform also provides personalized educational resources and financial recommendations. It has been valued at $3.5 billion
3) SoFi
SoFi was founded in 2011 and to focus on helping students get alternative sources of funds for their education. However, the firm has since started providing other financial services such as mortgages, insurance and wealth management. By October 2016, SoFi had provided loans worth over $16 billion.
4) WebFinance
The firm employs financial technology to enable borrowers with simple and safe debts to refinance them by borrowing directly from real people.
5) Upstart
Upstart employs complex algorithms based on areas of study, academic performance among other unique measures to determine the creditworthiness of a prospective borrower. This allows people without conventional collaterals to obtain credit.
The future of Fintech sector in san Francisco is bright with Facebook, Amazon, Google and Apple all venturing into the sector.
