The world’s top business school students are flocking to start-ups in the fast-growing fintech sector at a rapid pace.
These nimble companies have raised significant venture capital and hype, with promises to disrupt the big banks in areas such as payments, lending and even with bitcoin’s blockchain. MBAs are attracted to the innovation and while fintech has been on their radar for some time, the smaller start-ups in this space are increasingly alluring.
“There are a lot of start-ups using technology in the finance industry looking for MBAs,” says Sue Thorn, director of careers at Warwick Business School. “And these days, MBAs are interested in joining start-ups,” she says, adding that there is a “thirst to be entrepreneurial”.
“Fintech is a booming trend,” says Ways Hassas, an MIT Sloan MBA student who is organizing a “tech trek” to Silicon Valley, where Sloanies will meet Square, the payments start-up that floated on the NYSE in November.
At Columbia Business School in New York, home to fintech companies such as “roboadviser” Betterment and financial planning start-up LearnVest, which are hoping to challenge Wall Street, students are interested in the blending of finance and tech, says Regina Resnick, associate dean for careers.
She says MBAs are cognizant of the necessity to look at boutique firms and seed companies for their careers — many fintech start-ups are big in ambition but small in stature. “We have a rich ecosystem for start-ups and innovation, which are areas of strong interest,” adds Sue Kline at MIT Sloan’s MBA Career Development Office in Massachusetts.
Lara Berkowitz, executive director for the Career Centre at London Business School, close to a cluster of top fintech start-ups such as P2P lenders Funding Circle and TransferWise, founded by an INSEAD grad, says there is a surge in tech hiring more generally.
“Start-ups continue to be thirsty for talent,” Lara says. Fintech accounted for one-quarter of the $3.6 billion in venture capital raised by London tech start-ups in 2015, according to London & Partners.
Eileen Burbidge, partner at London-based tech venture firm Passion Capital, says: “Investors are increasingly attracted by the diversity of London’s tech ecosystem but also our strengths in certain sectors such as fintech.”
Sarah Juillet, director of postgraduate careers at the city’s Cass Business School, says there is student interest in such digital innovation.
David Lask, an MBA Student at London’s Imperial College Business School, is ditching investment banking with Santander for the electrifying fintech scene.
“Like all high street banks, innovation and change [at Santander] was hard to achieve,” he says. “That inspired me to get involved with the fintech industry.”
Large lenders are saddled with creaking legacy IT systems and this has opened up opportunities for the fintech disruptors like Stripe, Coinbase or Prosper, which are utilizing innovative technologies.
Entrepreneurship in this space, too, is catching on among elite business school students, who hope to challenge market leaders. “We are disrupting,” says Daniel Macklin, one of four Stanford GSB graduates who co-founded SoFi, the San Francisco student loans provider that recently raised $1 billion in venture capital, valuing it at around $4 billion.
Daniel, pictured left, used to work for Standard Chartered but fell in love with the Bay Area’s entrepreneurial environment while at Stanford, where the idea for SoFi was born. “Business school gave us that advantage to be able to develop and incubate an idea in a safe environment,” he says.
Ismail Ahmed developed WorldRemit, one of London’s hottest fintech firms, at London Business School. “I learnt a lot of valuable lessons about entrepreneurship and building a start-up,” he says.
WorldRemit, which provides online money transfers, recently raised $100 million from a leading Silicon Valley investor, valuing the company at about $500 million.
“WorldRemit is able to remove a lot of the friction and pain points associated with old-fashioned, offline money transfer services,” Ismail says. He says innovative fintech firms like his are “shaking up the traditional financial services sector”.