The aggregated valuation of fintech companies diminished by nearly half a trillion dollars
When the current value of fintech players is compared to their peak valuation, there’s a staggering decline of almost half a trillion USD, according to CB Insights.
As the pandemic started, the industry witnessed a massive increase in the use of digital services. Therefore, we observed a record number of IPOs among fintechs back in 2020. However, only 30 fintechs have listed in the US since that groundbreaking year.
Many experts forecasted that the pandemic would accelerate the migration to digital financial services. Yet, the dominance of fintech has been challenged by the unpredictable macroeconomic events. Inflation increased at a global level, raising interest rates and consumer price index.
As a result, more investors questioned the untested business models and lack of profits at some fintechs. Investor attention turned to value stocks from the growth sector.
The share price of listed fintechs has lost about 50% this year, almost twice as much as conventional markets. For instance, the Nasdaq Composite has fallen by 29% during the same period. In addition, the cumulative market cap for fintechs has fallen by $156bn in 2022.