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The exchange’s key group of fintech startups goes on a hunt to understand what’s worth — or isn’t
While banking world watch As American lender First Republic publicly shakes up after its earnings report lists the vast amount of steam it has accumulated, the world of neobank startups is taking a beating.
Earlier this week, Revolut, the high-value, UK-based neobank, saw its share price drop by 46% in one of its supporters’ views.
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With Revolt last raising $800 million for $33 billion in mid-2021, it’s probably overvalued at the time — show us a nine-figure seed round that matches today’s valuations and we’ll buy you a softie.
But almost two years after Revolut’s last valuation, such a sharp valuation made us sit up and take stock.
of Neobank-for-x-market It was one of the most popular starter models of all. Capital Hills has invested in dozens of global startups seeking to reinvent, or at least reinvent, consumer and SMB banking. It led to some liquidity, including the massive NuBank IPO and the resulting 11-figure valuation.
Revolut’s revaluation raises a few questions: How much trimming is left in the fintech world? And, are we likely to see something similar in the neobanking startup sector as a whole?
A Revolut spokesperson said: “We do not speculate on our estimates. Since our last funding round at a valuation of $33 billion, Revolut has continued to perform strongly in all its markets, continue to hire and expand, and reported its first full year of profitability.
This morning, we’re looking at what happened to venture capital in Q1 2023, as well as a handful of data points from F-Prime’s fintech index and results reports. Then, we’ll cover the most recent neobank financial results available to us, and conclude how much pain — or how little — neobanks can expect in the coming months. to make!
Money in, money out
We have fintech funding data for Q1 2023 from CB Insights, but it comes with a big asterisk. Without further context, funding for fintech startups increased 55% from the fourth quarter of 2022, reaching $15 billion globally.
The caveat, though, is that Strip’s $6.5 billion in revenue alone is more than a third of that total. If you exclude that round, the number drops to $8.5 billion, representing a 12% quarter-over-quarter decline.
This is the big picture. Taking a closer look at the fintech cluster group, we want to know which categories outperform others. It is difficult to find such information on private companies, but we have some interesting insights on public companies.
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