The AltFi view on fintech floats: Prime time to dive in
Successive IPOs and solid stock market performance has proven there’s market appetite for fintech listings, now the floodgates are opening.
Weekly Leading Article
If you’ve not been keeping track, the queue of fintechs hoping to reach the public market in the coming weeks and months is… extensive.
Wise just published its prospectus ahead of a 7 July London direct listing,
on Friday to join the NASDAQ later this year,
eToro’s SPAC merger is
to file its London IPO paperwork any day now,
And that’s not to mention Klarna, Checkout.com, WorldRemit, Trustly and Allfunds, all reportedly weighing up listings…
Quite a busy time for the army of investment bankers, lawyers and management teams who’ll be shepherding this herd of fintechs.
Their excitement is understandable.
After years of ‘challenging’ market conditions, investors on both sides of the Atlantic have demonstrated their appetite for higher-risk, even lossmaking fintechs.
The warm reception of PensionBee in London and Marqeta in New York, both of which are bobbing at or around their offer price, is certainly a reassuring sign.
Then there’s the stellar performance of listed fintech investors like Chrysalis Investments (up over 105 per cent YoY), Augmentum Fintech (up nearly 30 per cent YoY) and Draper Esprit (up over 100 per cent YoY).
Contrast that with the last time LendInvest considered listing in 2019, no-deal Brexit fears gripped the market while industry peer Funding Circle had seen its shares sink 74 per cent since its IPO the previous year.
There’s no guarantee that the market’s affinity for fintech floats, boosted certainly by an eruption in eCommerce and digital banking last year, will last forever.
Fears around inflation and a rising interest rate environment could quickly curtail investors’ risk appetites, and slam the door shut on those looking to float.
But for now, the water’s warm, it’s a great time to dive in.
The AltFi Leader is a new weekly view for 2021 from our editorial team. We’d love to hear your ideas, thoughts, feedback and constructive criticism: firstname.lastname@example.org