If there is Never been a golden age for fintech, it certainly should be now. By Q1 2021, the number of fintech startups in the US has surpassed 10,000 for the first time – well more than double if you include EMEA and APAC. There are now three fintech companies with another $ 50 billion (PayPal, Square and Shopify) valued at $ 50 billion – $ 100 billion Club (Stripe, Adeene and Coinbase).
Nevertheless, as fintech companies have begun to go public, there remains uncertainty as to how these companies will be valued in the public markets. It is relatively new to the IPO scene compared to their consumer Internet or enterprise software counterparts. In addition, fintechs employ a wide variety of business models: some are transactional, others are recurring or hybrid business models.
In addition, fintech now has a number of options for how they choose publicly. They may take the traditional IPO route, pursue a direct listing or merge with a SPAC. Given the multitude of variables at play, evaluating these companies and then predicting public market performance is anything more straightforward.
It is important to note that fintech is a complex category with many different types of players, and not all fintech is created the same.
Fintech gold rush is here
In the last two decades, fintech as a category has been very quiet on public markets. But that began to change drastically by mid-2010. Fintech had apparently arrived by 2015, with both Square and Shopiz going public that year. Last year was a record with eight fintech IPOs, and there has been no slowdown in 2021 – seven IPOs have already been produced in the first four months. By our estimates, there are more than 15 additional fintech companies that may IPO this year. The current record will certainly be shattered well before the end of the year.