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2021: FinTechs go public with hot valuations
We have seen a lot of FinTech companies go public this year, and some are planning to go public later in 2021 and 2022. Here is a quick round-up of what’s happened so far and what will happen in the upcoming months.
FinTech IPOs had hot valuations but some lukewarm outcomes.
This year, the most anticipated IPOs were of FinTech Unicorns around the world.
Coinbase went public this year. The IPO valued the company at over US $86 billion. It was hailed as a victory for the crypto community. However, the crypto market plunged just a few days after the IPO and Coinbase lost more than half its value in mere days.
DLocal, another FinTech payment provider, had a successful IPO this year. The company was not really hyped up in the IPO and only closed 10% above the IPO price. The good news was, in the subsequent days, the stock price shot up from US $35 to $52 in less than 2 months.
The long-awaited Nasdaq launch of investing app Robinhood happened in July, but things didn’t go quite as predicted. Shares fell as high as 10% in the first few minutes of trade before rebounding somewhat to end the first day down 8.37%.
The decrease reduced Robinhood's projected US $32 billion valuation to less than $29.4 billion, with the company's shares ending at $34.82, considerably below the US $38 they were priced at.
Moving to emerging markets, Indian digital payment giant Paytm is set to have a hot IPO. The Indian digital payment giant Paytm was last valued at US $16 billion in a series C funding round. It has also filed paperwork for an IPO to raise $2.3 billion at a valuation of US $25 billion. Paytm is one of the largest digital payment processing companies in India and has almost a monopolistic model.
FinTechs also chose to go public via a SPAC
SPACs have been very popular lately. Companies that want to avoid the hefty IPO process have been taking the SPAC route.
This year we also saw the growth of SPAC FinTech listings, with companies like SoFi and Acorns going public through SPACs. SoFi had its SPAC deal this year in June. Since then, the company has enjoyed a good run for its stock price, which has gained 30% since the IPO, valuing the company at US $14.5 billion.
While IPOs have been all the rage, two FinTech companies, Stripe and Chime, are also planning to go public via SPACs.
Chime has a valuation of around US $15 billion, and it aims to at least double that through a SPAC deal. Stripe is also the highest valued startup in the US, valued at over US $95 billion. The company is expected to use the SPAC method to be listed as it has been increasingly in contact with Bill Ackman’s Pershing Square Capital, a heavy hitter in the SPAC space.
This year, Dave, which is backed by billionaire Mark Cuban, agreed to a USD $4 billion SPAC deal with Victory Park Capital. Shortly before that, savings and investing app Acorns announced it had agreed to merge with Pioneer Merger at a USD $2.2 billion valuation.
Aspiration, a fintech company built on the premise that a bank can be financially successful while simultaneously helping the environment, will go public via SPAC in August 2021 through a merger with Interprivate III Financial Partners Inc.
Which FinTechs are rumored to go public in 2022?
2022 is also going to be a big year for FinTech listings, with companies like Nubank, Monzo, and Klarna gearing up for a listing.
The Latin American, British, and Swedish banks have all been game-changers in their region and the world and currently enjoy a multi-billion dollar valuation. It is expected that these banks will file for listing next year. What route they take is not really known. Given the size and location of the companies, it is expected that they will go with the IPO route. However, nothing can be said.
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