The market correction has led to more realistic and tangible valuations for fintech companies. Current valuations are now around 4x revenues, down from the previous highs of 20x. This adjustment provides a more stable and attractive entry point for investors. On the other hand, fintech revenues have been growing at an average annual rate of 14%, and when excluding China and cryptocurrencies, this rate increases to 21%. This indicates a healthy and expanding market. Not to ignore that recalibration in the market has made it possible to access high-quality fintech companies that might have been previously out of reach due to inflated valuations and heightened competition from larger, non-specialized funds. Last but not least, the fintech sector continues to experience rapid growth and innovation. Emerging technologies like blockchain, artificial intelligence, and machine learning are transforming financial services, making them more efficient, secure, and accessible. This ongoing evolution presents numerous investment opportunities. The LHoFT - Luxembourg House of Financial Technology LPEA - Luxembourg Private Equity & Venture Capital Association LBAN - Luxembourg Business Angel Network
The global fintech market is positioned for substantial innovation and growth, despite a sobering few years in funding and valuation terms. As the sector evolves, balancing prudence with profitability will be key to success. Our new report, co-authored with QED Investors, paints the picture of a watershed moment, where the capabilities and skills required to thrive are rapidly changing. Learn more here: https://lnkd.in/eviP2fpr