The funding frenzy Investment in fintech booms as upstarts go mainstream
A N AIR OF hype habitually surrounds the founders of startups and their venture-capital backers: everyone is an evangelist for their latest project. But even allowing for that zeal, something astonishing is going on in fintech. Much more money is pouring into it than usual. In the second quarter of the year alone it attracted $34bn in venture-capital funding, a record, reckons CB Insights, a data provider (see chart 1). One in every five dollars invested by venture capital this year has gone into fintech.
Deals are also proceeding at a frenetic pace. PitchBook, another data provider, reckons that venture-capital firms have sold $70bn in stakes in fintech startups so far this year, nearly twice as much as in all of 2020, itself a bumper year (see chart 2). That included 32 listings. Fintechs took part in 372 mergers in the first quarter, including 21 of $1bn or more.
In the past few weeks alone Visa, a credit-card firm, has paid €1.8bn ($2.1bn) for Tink, a Swedish payments platform. JPMorgan Chase, America’s largest bank, has said it will buy OpenInvest, which provides sustainable-investment tools—its third fintech acquisition in six months. Upstarts, such as Raisin and Deposit Solutions, two German platforms that link banks with savers, are merging. Some are going public. On July 7th a listing in London valued Wise, a money-transfer firm, at nearly £9bn ($12.2bn). Recent or planned multi-billion initial public offerings (IPOs) include that of Marqeta (a debit-card firm), Robinhood (a no-fee broker) and SoFi (an online lender).
