Business of Fintech, Member Exclusive

Fintech valuations seriously challenged after a booming 2021

  • Private and public markets are taking a more cautious approach towards valuing fintechs, as the recent market sell-off coupled with macro headwinds are raising concerns.
  • This comes in contrast with the optimism displayed last year, which saw record numbers of capital pouring in the fintech sector, and wave of fintechs going public.
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Fintech valuations seriously challenged after a booming 2021

Private investors have switched gears on fintech companies, pressured by the recent market sell-off to start scrutinizing valuations – a 180 degree switch from the enthusiasm displayed just a year ago.

Fintechs in need of capital might hit a wall of skepticism from both private and public markets, which are eyeing more economic discipline given financial performances in the sector and wider macroeconomic conditions. 

This comes in contrast with last year’s investment arena, when fintech was one of the best funded startup sectors. Reports suggested that one in five VC dollars went to fintech startups in 2021 – a year which also saw record numbers of venture capital money. 

2021 was the largest and most active year ever for private fintech company financing activity with $141.6 billion in total dollar volume raised across 3,573 funding rounds, according to FT Partners. This was fuelled by 400 funding rounds north of $100 million and 36 rounds of more than $500 million – unprecedented levels in the sector.

 


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