Public fintechs lost 72% in market value last year
Many investors have turned to tech and fintech stocks in the recent market correction, but these stocks have seen the largest declines. This suggests that, while the corrections are widespread, some sectors are more vulnerable than others.
It seems that the Fintech Index is in a fairly dismal state, with F-Prime Capital estimating that it has fallen by 72% in just two years. This could be bad news for companies operating within the sector, as they may struggle to remain profitable while this trend persists. If nothing else, it suggests that there is still plenty of room for improvement within this hotly anticipated field.
In today’s world, Fintech companies are quickly becoming the go-to providers of innovative solutions for a range of financial needs. From payments to banking to wealth and asset management, these companies are always on the forefront of innovation and offer a host of unique services that can benefit consumers and businesses alike.
The public’s reaction to fintech stocks in 2022 was a mixed bag. While some applauded the inclusion of these investments on Wall Street, others felt that it was not the best time to be investing in these types of companies. This is likely due to a number of reasons, including the economy being relatively weak at that time and global events having an impact on technology stocks.
This is potentially a turning point for the fintech industry, as many of the companies that went public in 2021 have since been able to achieve significant growth and profitability. Some of these firms, such as Robinhood and Square, are well-known players in their respective markets and have been able to expand rapidly both domestically and internationally. Others, such as LegalZoom and InstaRevenue, are still relatively new but show great potential. In any case, 2021 was a major year for the fintech industry and its future looks hopeful indeed.
Given that F-Prime has kept track of 75 Fintech companies going public in 2021, it seems clear that the technology and financial sectors are booming. It makes sense that we would see more companies taking the plunge into the public markets in subsequent years, as there is still ample opportunity for growth. Furthermore, 2022 was actually the first year on record where we could put together a Fintech Index – indicating just how popular this industry has become.
The flurry of exits in the tech sector over the past few years has taken a toll on several companies’ stock prices. While some, like Coinbase, have seen their value stay relatively steady, others have experienced sizable declines in value. Notably, the 10 largest exits during the peak years of 2020-2021 saw a cumulative market cap decline of over $220 billion. This suggests that even large and well-known companies can suffer when they exit the market.