Edison Partners Outlines Key Fintech Growth Drivers

One point is abundantly clear in Edison Partners' annual portfolio report: you have to spend money to make money.

The growth equity investment firm's report includes benchmarks, industry guidance, market data and more, and is used by fintech companies like MoneyLion and YieldStreet.

The Results

The study, based on growth-stage technology companies, revealed seven characteristics often associated with quick and sustainable company growth, according to Edison Partners.

• More investment in sales and marketing.
• Strategic pricing.
• Investment in customer success. “New this year, the Growth Index found that fast growers spent six times more to onboard and retain customers. As a result, they grew ARR with existing accounts by 35 percent, retained revenue at 17 percent higher rates, and saw net dollar retention of 102 percent,” according to Edison.
• Higher retention, averaging a 17-percent increase.

Bottom line characteristics include:

• Rapid hiring, accounting for a 22-percent increase.
• Higher revenue per employee.
• Heavy losses.

Why It’s Important

Edison's study, designed to help companies navigate business decisions and determine growth plans, was conducted based on 2018 GAAP revenue growth rates exceeding 30 percent. Data and additional resources are then provided for the diverse lineup of companies among different stages of operation, most of which are growing at a fast pace.

“Fast growers also tend to take a more holistic and disciplined approach to acquisition and retention of their customers and, interestingly, employees alike,” Edison Partners’ Alex Symos said in the company press release.

“They spend with the intention to build a business model for scale, one that will bear exponential returns as the company grows.”

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