FinTech valuations rebound quicker than the broader market in Q2 2023

According to PitchBook, the stock prices of public FinTech companies have shown a quicker recovery than the broader market. In the second quarter, these shares rose by 21.2%, surpassing the Nasdaq’s 12.8% gain and the S&P 500’s 8.3% return. This means we will likely see a rise in private FinTech valuations in the near future as these usually lag behind the public sector. The main reason for this valuation jump is FinTechs have been directing their efforts towards attaining profitability, this has been achieved via cutbacks in staffing, marketing expenses, and other operational outlays. A few FinTech companies, like neobanks, are now starting to surface with sustainable and profitable business models such as Revolut which announced $26.1m in profit during 2021. Other neobanks are also expecting to reach profitability. TS Anil, CEO of Monzo said in December 2022, “We will be profitable in the next financial year,”.

Ant Group, an affiliate company of the Chinese conglomerate Alibaba Group, is the highest valued private FinTech company, globally as of 24th September 2023 with a $78.5bn valuation. The group owns the world’s largest mobile payment platform Alipay, which serves over 1.3bn users and 80m merchants, with total payment volume reaching CN¥118tn in June 2020. It is the second largest financial services corporation in the world, behind Visa. In July 2023 Ant Group announced a share repurchase program that valued the company at $78.5 billion. This valuation stands significantly lower, approximately $230 billion less or 75% below its worth nearly three years ago.

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