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.
close

Email a Friend

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.

 


This content is available exclusively to Tearsheet Outlier members.

Tearsheet Outlier information and signup Missing out? Subscribe today and you’ll receive unlimited access to all Tearsheet content, original research, exclusive webinars and events, member-only newsletters from Tearsheet editors and reporters and much more. Join Outlier now — only $49/mo. Already an Outlier member? Sign in to your account

0 comments on “Fintech valuations seriously challenged after a booming 2021”

Green Finance, Member Exclusive

Green Finance Briefing: Greenwashing on Wall Street, and climate tech stocks outperforming the market

  • Regulators have started to investigate misleading ESG claims at big banks, signaling that they’re paying close attention to the wave of greenwashing happening in finance.
  • Elsewhere, climate tech stocks continue to outperform the market, and UN Secretary General Antonio Guterrez bemoans the counterproductive attitude of the finance industry towards climate change.
Iulia Ciutina | June 24, 2022
Member Exclusive, Payments

Payments Briefing: Is the ‘Apple Pay Later’ hype warranted?

  • This week, we review the hype around Apple Pay Later and try to determine how much of it is justified.
  • We also look at Square’s move to bring Afterpay to in-store purchases, making it even easier to pay in four – and how this greater ease could lead to overspending and growing consumer debt.
Ismail Umar | June 23, 2022
Member Exclusive, Online Lenders

Lending Briefing: The SMB Brexit, and digital lending VC funding

  • Given the recent announcement from expense management platform Brex to stop serving SMBs, how are its competitors looking to address the market?
  • We also take a look at the first quarter VC funding in fintech, and how lending compares to other verticals in the space.
Iulia Ciutina | June 22, 2022
Green Finance, Member Exclusive

Given the lack of standardization, how should FIs think about ESG reporting?

  • Creating a well-defined global framework for ESG and sustainability factors will bring more accountability in the financial sector, but this task is very complex in nature.
  • Financial institutions are increasingly feeling the pressure from an ESG standpoint, given the SEC crackdown and demands from consumers, but the lack of standards makes it hard for them to formulate a strategy.
Iulia Ciutina | June 21, 2022
Member Exclusive, Payments

How the global microchip shortage is affecting the payments industry

  • While chip-based payment cards face the biggest threat, experts say the only aspect of payments immune to the shortage is physical currency.
  • As banks look to address the problem, one of the solutions being discussed is extending payment cards' expiration dates.
Subboh Jaffery | June 20, 2022
More Articles