Could 2024 be the year of fintech IPOs? Very possibly, according to report State of Fintech 2024 by F-Prime Capital.
F-prime Capital is a venture capital firm with over $4.500 billion in assets under management that studies the performance of emerging, publicly traded and privately held financial technology companies. Because of his knowledge and experience, he remains optimistic in the fintech space, noting that: “Collectively, fintech companies have captured less than 10% of financial services revenue, however, many of those private equity companies large scale are generating revenues of more than a billion dollars, continue to grow rapidly and we expect them to list on the public markets.”
“Many major companies are filing or considering going public,” says F-Prime.
To be clear, when F-Prime refers to fintech, it lumps together financial technology and crypto/blockchain startups. In general, the two tend to be separated, although it could be said that cryptocurrencies undoubtedly fall under the umbrella of fintech. For the purposes of this article, we are focusing only on some of the companies born around cryptocurrencies and that have the potential to go public this year.
It remains to be seen if any of these companies actually take the plunge. It would be interesting if only one filed to get a better view of how much money these companies are (or aren't) actually making.
Apex
As reported by Dallas Innovates last December, “two years after attempting to go public via a SPAC merger that valued it at $4.7 billion, Apex is looking to do it the old-fashioned way with a direct filing to the SEC. The stock settlement firm in a confidential filing with the SEC said that “the total number of shares to be offered and the price range for the proposed offering have not yet been determined.”
Stripe
In January 2023, Stripe was reported to have set a 12-month deadline to go public either through a direct listing or to conduct a private market transaction such as a fundraising event and public offering. acquisition.
Well, it's been 12 months and nothing has been heard about an IPO. But the payments giant raised more capital last year. Last March, Stripe announced that it had raised more than $6.500 billion in Series I funding at a valuation of $50.000 billion. It had previously been valued at $95 billion, giving it the status of one of the most valued private fintech companies in the world. In November 2022, Stripe laid off 14% of its staff, or about 1.120 people. But fintech continues to expand. Last June, Stripe had acquired a startup (not fintech!) and announced an expansion of its credit issuer product.
Klarna
Swedish fintech Klarna confirmed last November that it was taking steps “towards an eventual IPO.” The company said it had begun a process of restructuring its legal entity to establish a holding company in the United Kingdom "as an important first step" in its plans for an initial public offering, according to a Klarna spokesperson. The move came on the heels of a positive third quarter in which Klarna turned a profit and reported 30% more revenue of around $550 million. Creating a new legal entity at the top of the company's corporate structure would allow it to go public more easily, the spokesperson added. Its most recent valuation was $6.700 billion, down 85% from a $45.600 billion valuation it boasted a year earlier.
Lendbuzz
Lendbuzz, a fintech company that applies artificial intelligence to provide car loans to people who lack credit history, in December “hired investment banks for an initial public offering That could value it at more than 2 billion dollars,” according to Reuters. In June 2021, the auto financing platform raised $300 million in debt financing and $60 million in funding.
Chemistry
Rumors have been circulating for some time that Chime is eyeing the public markets. Rated at 25 billion dollars The neobank was initially, as TickerNerd reports, “poised for a March 2022 debut at a valuation of between $35 and $45 billion,” but then the markets took a turn. In November 2022, the company had announced that it would lay off 12% of its workforce, or about 160 people. Recent reports set the company's valuation about $ 6.700 billion and it is possible that Chime will decide to take the step this year, considering that it was already scheduled for market entry at the end of 2023, according to Investing.com.
Plaid
Last October, Plaid hired former Expedia CFO Eric Hart to serve as its first CFO, typically a crucial step in a private company's move into the public markets. The company then announced that it had hired Cloudflare chief product officer Jen Taylor to serve as its first president. Asked if the move meant the company planned to go public, a spokesperson said: "I can confirm that an eventual IPO is a milestone we are moving towards, but we do not have any details or timeline to disclose." Beyond that." Plaid began as a company that connects consumer bank accounts with financial apps, but has since gradually expanded its offerings to offer a more comprehensive onboarding experience. Visa was close to buying it for $5.300 billion before regulators stopped that deal, which some call a blessing in disguise.
Rippling/Gusto/Deel
The HR Tech Space became very trendy, very fast, and these three companies are among the most popular in the sector.
Rippling last March was able to secure $500 million in new financing as the SVB disintegrated.
Last June, we found that Gusto in its most recent fiscal year (the 12 months ending April 30, 2023) had generated revenue of more than $500 million.
In January 2023, Deel revealed that it had reached $295 million in annual recurring revenue (ARR) by the end of 2022. In November, that figure was reported to have reached 400 million dollars.
Interestingly, Rippling has expressed its rivalry with the other two companies. CEO Parker Conrad spoke about the fact that Rippling was entering Deel's territory. Even as early as 2020, Rippling went after Gusto with a billboard saying: “Topping Gusto? Quick, change.
Brex/Ramp/Navan
The expense management space is another crowded space with multiple players clamoring for market share, including Brex, Ramp, Airbase, Navan (formerly TripActions), and Mesh Payments, among others.
So far, Navan is the only one to go as far as confidentially filing for an initial public offering (IPO) — at a valuation of $12.000 billion. But that was in September 2022 and we haven't really heard anything about it since then. Last December, the company laid off 5% of its staff, or 145 people.
Brex, which was valued at $12.300 billion two years ago, has had two rounds of layoffs in the past 18 months and is reportedly working to reduce its cash burn.
Ramp raised $300 million at a 28% lower valuation of $5.800 billion last August. So far no staff have been laid off. When asked about IPO plans, CEO and co-founder Eric Glyman said the company was "excited to explore the IPO process eventually, but does not have an active timeline on that."
