Public fintechs lost 72% in market capitalization last year
While the public market correction has been widespread, tech and fintech stocks have seen the biggest declines, according to a recent report.
Specifically Fintech index — which tracks the performance of emerging, public financial technology companies — fell a staggering 72% in 2022, according to F-Prime Capital’s State of Fintech 2022 report. After reaching a peak of $1.3 trillion at the end of 2021, the F-Prime Fintech Index fell to $397 billion by the end of 2022.
Currently, the Fintech Index includes 55 companies across B2B SAAS, payments, banking, wealth and asset management, lending, insurance and proptech.
“The biggest shift in 2022 was public investors gaining weight in fintech stocks for the first time,” said David Jegen, managing partner at F-Prime Capital. “It was probably not super good timing given the broad macroeconomic impact on technology.”
That so many fintech companies went public at all was a big deal in itself, Jegen said. “We had 10 years of exciting fintech disruption, all led by private investors,” he said. “So 2021 was huge because the IPO window was open when we had a really mature cohort of fintech companies.”
In fact, 75 fintech companies went public in 2021, which means 2022 was the first year that F-Prime could even compile a Fintech index.
In particular, the decline was particularly pronounced for the 10 largest exits in the peak years 2020-2021. In other words, the bigger the exit, the bigger the drop. The cumulative drop in market value of the 10 most recent exits totaled over $220 billion; Coinbase, NuBank, Robinhood, SoFi, Affirm and Wise all saw their valuations fall.