Fintech Unicorns Hold Off on IPOs, Watching Market Closely
The financial technology sector is abuzz with speculation following Klarna’s confidential filing for a US IPO. However, industry leaders are hesitant to follow suit, citing uncertain market conditions.
A Wait-and-See Approach
Hiroki Takeuchi, CEO of online payments startup GoCardless, believes it’s not yet time for his company to go public. Instead, he’s focused on building a better business, which will naturally lead to a successful IPO. Takeuchi’s sentiments were echoed by Lucy Liu, co-founder of cross-border payments firm Airwallex, who emphasized the importance of becoming the best in their field before considering an IPO.
Analysts Weigh In
Navina Rajan, senior research analyst at PitchBook, is more optimistic about the outlook for fintech IPOs. She points to improving macro conditions, interest rates, and politics as factors that could open up the IPO window. However, Rajan acknowledges that uncertainty remains, and the timing of Klarna’s IPO will be crucial in setting the tone for the market.
Fintech Funding Remains Strong
Despite the hesitation around IPOs, fintech companies have raised a significant amount of venture capital this year – around 6.2 billion euros ($6.6 billion) through October 30, according to PitchBook data. This suggests that private markets remain a viable option for fintech startups looking to fuel their growth.
Zopa CEO Sees Signs of Improvement
Jaidev Janardana, CEO and co-founder of British digital bank Zopa, believes that an IPO is not an immediate priority for his firm. However, he sees signs pointing towards a more favorable IPO market in the next couple of years, with the US likely opening up in 2025 and Europe following suit in 2026.
The Future of Fintech IPOs
As fintech unicorns continue to watch the market closely, it’s clear that they’re waiting for the right moment to make their move. With improving conditions and a strong flow of venture capital, the stage is set for a resurgence in fintech IPOs in the near future.
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