A confluence of factors have helped to create the current opportunity, which include high multiples for stocks, tailwinds for digital financial services adoption during the pandemic, and low interest rates. Many startups are now in a position to seize the moment. Over the last three years, fintech funding has trended toward bigger deals for later-stage companies, leading to a buildup of startups that are primed to go public.
Despite growing enthusiasm, fintech IPOs have suffered from a relative lack of comparable public companies, investors say. And the available case studies aren't all encouraging: the online lending boom that launched companies like LendingClub and OnDeck Capital ultimately failed to meet expectations. "The fintech sector overall has not done great in public offerings," said Jeremy Solomon, a principal at Nyca Partners and former Affirm and SoFi executive.