Predicting break-even in FinTech startups as a signal for success

• When a Fintech startup attains break-even, it sends a powerful signal to the market • External funding can hold back FinTech startups from achieving break-even • We use proprietary survey data to detect when FinTech startups reach break-even • We base our data analysis on logistic regression and random forest models • We use SHAP values to interpret the random forest model FinTech startups drive innovation and competition in the financial services industry. An early milestone for these startups is to achieve break-even, which sends out a positive signal to the market – and to potential partners and financial institutions – by demonstrating viability and lower perceived risks. Our analysis of proprietary survey data using logit and random forest, interpreted through SHAP values, indicates that external funding significantly decreases the likelihood of a startup reaching break-even. This negative impact can be traced to strategic misalignment with investor expectations, delays in the implementing of stringent financial management practices, and an emphatic focus on rapid growth.