How Should FinTech Born Globals Plan Their Market Expansion Endeavours?

Abstract: With the FinTech industry being one of heavy expansion, geographic markets have thus far reached varying levels of maturity. This is suggested to favour Born Global firms (BGs) as a common rationale behind their non-domestic inception is to exploit maturity differences among markets. How FinTech BGs internationalize is hence an alluring topic, and albeitFinTech having risen to being amongst the most prominent areas of finance, FinTechmarket expansion has been granted little academic focus. Moreover, amid FinTech BGs often being equity financed and high growth, and the recent years’ favourable capital market conditions combined with surging FinTech valuation multiples, a need for strategically sound market expansion processes may not have existed. Recent trends are however conveying similarities to the dot com crash, and a new climate may be looming, justifying more research within the subject. This thesis hence aimed to enhance the understanding of how FinTechs internationalize in an industry characterised by BG opportunities, and to understand how FinTech BGsshould derive entry strategies to new markets. Through embarking from the academia, a conceptual framework was formed with variables believed to exert influence on FinTech BGs’ market expansion. A qualitative case study of a Swedish FinTech BG was thereafter conducted, examining its applicability,to understand how the BG status affect market expansion endeavors, and how such endeavors should be planned. The findings suggest that the geographical division of FinTech BGs’ ecosystems is the primary source of competitive advantages, and that one should leverage these in expansion endeavors. The thesis further argues that the value encompassed in technology opens opportunities for financially constrained expansion. It moreover adds to the discussion about entry modes in service industries, and argues that there is no vested interest in having distinctive lines among entry modes, and that they should be viewed as compliments. Finally, the study argues that valuation and funding should be granted larger focus in internationalization research. The findings suggest that BGs can exploit the geographical division between M&A targets and their own investors in search of arbitrage opportunities, a topic inviting further research.