Fintech’s strongest private companies continued to grow last year, but declining investment in the sector signals stormy waters to come.
It’s turning into a sober year for Fintech. After the new unicorns carnival in 2021 and mega funding rounds, private fintech companies are now scrambling to cut costs and expand funding to avoid raising additional funds at a lower valuation (known as a “down tour”). . Their fears are well-founded.
With publicly traded fintech companies losing 50% since November, venture capitalists are curbing funding for start-ups in the industry; According to a report by data provider CB Insights, US fintechs raised $13.3 billion in the first quarter of 2022, down 27% from the same period last year. Even more dramatic, according to the report: The median value of late-stage American fintechs raising funds in the first quarter of 2022 was $1.9 billion, 58% lower than those raising funds in the last quarter of 2021.
Still, it’s been a journey fueled in part by the shift to online shopping and banking, accelerated by the pandemic. In February 2020, just before Covid-19 hit the US, the average valuation of America’s ten largest private fintech companies was $9 billion, with the cap at $3.7 billion to make the list. For our 2022 listing, those numbers have more than tripled – reaching an average value of $27.7 billion and a cap of $12 billion. Future rounds of funding will show whether these record valuations reflect a bubble that is about to burst, or perhaps are sustainable after a pause.
Half of the 10 fintechs on the 10 most valuable of 2020 lists have gone public, including Robinhood. The free stock trading app went public at $35 last July, raising $55 per share. It now trades at just $9, giving it a market cap of $8 billion in 2021, down 30% from its value as a private company.
The most notable newcomer on the 2022 list and the third most valuable private fintech doing business in the US is crypto trading exchange FTX, which is worth $32 billion today after reaching unicorn status less than a year ago. New to our ranking is OpenSea, the $13 billion NFT trading platform.
Here are this year’s most valuable American private fintechs.
| 1 |
Ribbon: $95 billion
Founded in 2011, Stripe helps businesses large and small process online payments, obtain business loans, and automatically calculate and collect sales tax. The company remains the most valuable American private fintech with a valuation of $95 billion raised in the 2021 Series H round, and is the fourth most valuable private company in the world after tiktok owner Bytedance, Elon Musk’s SpaceX and Chinese fast fashion seller SHEIN. Stripe handled $640 billion in payments last year; this is a 60% increase over 2020. (Read more about Stripe here.)
Founding Partners: CEO Patrick Collison, 33, and John Collison, 31, president. The Irish-born siblings have a combined net worth of $19 billion.
| 2 |
Klarna: $46 billion
Klarna, a pioneer of the take-then pay-now model, has invested in customers who are moving away from credit cards but still looking for a way to pay over time. Users can purchase everything from Nike sneakers to Sephora lipsticks through the app and choose to schedule interest-free payments or pay at checkout. The company makes most of its revenue by charging retail partners for affiliate marketing and payment services. Klarna is reportedly seeking to raise $1 billion in a downturn that could lower the company’s valuation to the $30 billion range.
Co-Founder and CEO: Sebastian Siemiatkowski, 40, who worked at an accounting firm before founding Klarna and is now worth an estimated $3.2 billion.
| 3 |
FTX: $32 billion
The valuation of FTX, one of the world’s largest crypto exchanges, has skyrocketed from $1.2 billion to $25 billion after raising $1.5 billion in private funding last year. Its valuation rose to $32 billion after a $500 million increase in January. The Bahamas-based company manages approximately 11% of $2.4 trillion in derivatives traded worldwide each month. Eager to become a celebrity brand, FTX spends hundreds of millions of dollars on marketing signing famous brand ambassadors such as Tom Brady, David Ortiz, and Kevin O’Leary, and pursues US customers valued by a separate entity, FTX US. At $8 billion.
Co-Founder: CEO Sam Bankman-Fried, 30, is the second richest crypto billionaire in the world with $24 billion, and CTO Gary Wang, 28, is worth $5.9 billion.
| 4 |
Bell: $25 billion
Chime, the largest digital bank in the United States, has grown in popularity by providing free checking accounts with no overpayment fees and offering cash advances to its customers. According to a source familiar with the matter, Chime was set to go public earlier this year, but delayed the IPO on a rocky exchange. CEO Chris Britt said Chime acquired more new customers in the first quarter of 2022 than in any quarter in the bank’s ten-year history.
Founding Partners: CEO Chris Britt, 49, who previously served at Green Dot and Visa; CTO Ryan King, 45.
| 5 |
$15 billion fluctuation
Ripple facilitates international payments and remittances through blockchain technology and the proprietary cryptocurrency XRP. The company has more than 300 corporate clients, including Standard Chartered, Santander and MoneyGram, who use Ripple for 10% of their cross-border transactions to Mexico. The SEC is suing Ripple for allegedly making illegal securities offerings through the sale of XRP. CEO Brad Garlinghouse said he might consider taking the company public once the case is settled.
Founding Partners: Chairman of the board Chris Larsen, 59; Jed McCaleb, 49; Arthur Britto, CEO: Brad Garlinghouse, 49, a former AOL president.
| 6 |
Blockchain.com: $14 billion
The British crypto exchange is the world’s most popular cryptocurrency wallet that allows users to manage their private keys for various currencies. It has expanded to the US and is now able to serve customers in 22 states, including California. Founded in 2011, the company claims that one-third of the world’s bitcoin transactions have been conducted on Blockchain.com, with 82 million wallets and over $1 trillion in transactions since its launch.
Founding Partners: CEO Peter Smith, 32, an early bitcoin enthusiast; and Vice President Nicolas Cary.
| 7 |
Plaid: $13.4 billion
Founded in 2012, Plaid facilitates seamless payments and deposits by helping fintech apps like Venmo and Coinbase connect customers’ bank accounts. Earlier this year, Plaid acquired authentication and KYC (know your customer) compliance provider Cognito for $250 million. Plaid has expanded its customer base from around 4,500 at the end of 2020 to 6,300 by the end of 2021.
Founding Partners: CEO Zach Perret, 34, and former CTO William Hockey, 32, co-founder of new Fintech 50 member Column. The couple met as young Bain mentors before founding Plaid in 2012.
| 8 |
Offshore: $13.3 billion
A big winner in the NFT craze of 2021, OpenSea is a peer-to-peer platform where users can create, trade, buy and sell NFTs. Founded almost five years ago, the company has a 2.5% cut from each sale and processes approximately $3 billion per month in NFT transactions and generates approximately $75 million in monthly revenue. With over 1.5 million accounts traded on the platform, OpenSea maintains its dominance in the NFT market, but key competitors like Coinbase, which launched the NFT exchange in May, are trying to bridge the gap.
Founding Partners: CEO Devin Finzer, 31, and Alex Atallah, 30, CTO. They became the first NFT billionaires in January 2021.
| 9 |
Brexit: $12 billion
Brex, a suite of corporate banking products, provides FDIC insured corporate cash management accounts and corporate credit cards with no account fees, travel rewards, and built-in expense tracking. The online dashboard offers expense management software and streamlines businesses’ bill payment process. In August, the San Francisco-based company launched a lending service to venture-backed tech companies and made its largest-ever acquisition in April – spending $90 million on a software startup to help users with budgeting and financial projections. Its tens of thousands of customers include ClassPass, Airbnb, and Carta.
Founding Partners: Co-CEOs Henrique Dubugras, 26, and Pedro Franceschi, 25, started Brex after leaving Stanford.
| 10 |
GoodLeap: $12 billion
California-based GoodLeap makes it easy for users to do green house upgrades. It has provided $13 billion in financing to nearly 380,000 homeowners through partner banks, including Goldman Sachs – half of that in the past year alone – through partner banks that make loans and then securitize the debt to sell to investors using its software to monitor loan performance. . Contractors and vendors are using GoodLeap’s point-of-sale app to get customers’ project loans instantly approved for solar panel installation, and as of last year, more than 20 categories of sustainable improvements, including battery storage, energy-efficient windows and water-saving turf.
founding partners: President and CEO Hayes Barnard, 50, and Chief Revenue Officer Matt Dawson, 48, two longtime executives at SolarCity (now Tesla Energy); and Jason Walker, 48, Chief Risk Officer, a veteran mortgage broker.
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