The FinTech sector saw no new unicorns in January 2023 indicating a drop in VC valuations. Overall unicorn announcements have also hit a low in January with only two new unicorn announcements. Public valuations dropped 23% (S&P 500) in 2022 from 2021’s peak in December and private markets have followed suit so far. Private equity and venture capital firms mark, or assign value to, their portfolios on a quarterly basis. At present, private investment valuations lag the public markets, although that could soon change as the valuations, audited in December, begin to trickle. These valuations signal a continued valuation drop, differing from public markets which saw a 13.5% (S&P 500) rise in Q4 2022.
The two most recent FinTech unicorns, Younited, an instant credit provider, and BeZero, a carbon ratings and risk analytics platform, show the FinTech subsectors still attracting high amounts of funding. P2P lending platforms saw huge growth in the aftermath of the 2008 crash as companies and individuals found it harder to receive loans from traditional suppliers, this will likely be the same in 2023 as high interest environment encourages new innovative solutions. ESG is also a sector which has seen significant growth. A PwC report found that Investors globally are embracing Environment, Social and Governance (ESG) investing on a massive scale – “seen soaring 84%” to $33.9 trillion by 2026.
The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2023 FinTech Global