The FinTech sector loses half a trillion in valuation
The once-hot FinTech area is in the midst of a great cold, losing half a trillion in valuation as the cumulative value of the shares of newly listed companies in the sector has fallen $ 156 billion so far this year.
Initial public offerings (IPOs) have escalated in the FinTech area since the pandemic took hold in 2020, but now the plans for listing are pending and valuations are being cut while companies try to cut costs.
Mizuho analyst Dan Dolev said that FinTechs in the payment area did particularly well during the pandemic since people went home and shopped online for everything they needed, the Financial Times reported on Monday (July 18).
FinTech OneConnect saw shares fall more than 20%, according to the PYMNTS FinTech IPO index, which fell 3% as reported on Friday (July 15). Upstart’s decline was due in part to a downgrade from Goldman Sachs. So far this year, the PYMNTS index shows the total performance in the area down almost 43%.
See also: The FinTech IPO index stumbles into the revenue season with a 3% weekly drop
PayPal and Block together lost $ 300 billion in market value this year, and Klarna dropped its valuation from $ 46 billion to less than $ 7 billion, FT reported. Stripe reduced the valuation by more than 25%.
Read more: The IPO value will fall 90% in 2022 in the USA and Europe
The value of IPOs around the world fell 71%. In the United States and Europe, only 157 companies raised $ 17.9 billion in total in the first five months of 2022, down from 628 companies that raised $ 192 billion in the same period in 2021, PYMNTS reported last month.
Dolev told FT that the second half of 2022 may see an increase for many companies as comparisons from year to year look more promising.
Related: Falling FinTech IPO Index Warns of Future Startup Financing
PYMNTS ‘FinTech IPO index in May was down 50% so far this year, with interest rates rising for borrowers and approval rates falling. Venture capital companies began throwing in funding, looking for break-even points in startups that burned money.
——————————
NEW PYMNTS DATA: HOW TOOLS AND CONSUMER FINANCING COMPANIES CAN IMPROVE THE BILL PAYING EXPERIENCE
About: More than half of energy and consumer finance companies have the ability to process all monthly bill payments digitally. The kicker? Only 12% of them do. Digital Payments Edge, a PYMNTS and ACI Worldwide partnership, examined 207 billing and debt collection experts at these companies to find out why it is still elusive to go completely digital.
