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There’s another boom in bearish advice now.
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Who’s up for sale? Private companies’ cash flows aren’t widely available.Le said the report that Klarna was raising money at a 33% haircut was a big indicator that fintechs are struggling to raise.Private fintechs will need more money soon, and if they can’t get it from VCs, Le said their only options are to “go out of business or sell.” Fintechs are doing a lot worse than cloud companies, which supports his point about “fin” versus “tech.”Īn increase in M&A looms on the horizon. Le likes to look at the F-Prime Fintech Index, which tracks fintech companies against cloud services, the Nasdaq and the S&P 500.The valuations of most fintech companies that went public in 2021 have fallen by double digits. $329.4 billion more was made in 2021 fintech exits than in 2020, and the vast majority of that money was made in IPOs, according to PitchBook. Before last year, there weren’t many public fintechs, period.
#CUOMO TWITTER SOFTWARE#
Le said fintech valuations are falling because public markets see the companies as more “fin” than “tech.” The industry is coming to terms with the fact that the broader public doesn’t see these companies as worth the kind of multiples software companies get. So I called Robert Le, a fintech analyst at PitchBook, to extract some signal from the noise. When there’s so much chatter, I find it useful to talk to someone whose job it is to just crunch the numbers, not place bets. Talk to startup CEOs, and they’ll blame the economy or, discreetly, acknowledge that some IPOs were frothily overpriced. VCs agree that founders should tighten their belts, but they’re unhelpfully vague on whether that’s for a few months or a few years. Crypto’s gloom is casting a pall on the broader fintech world, along with the shaky economy, crashing stocks and rising layoffs. Just scrolling fintech Twitter is enough to give you whiplash.