How to value a FinTech start-up

Peter Wendell, a managing director at US venture capitalist Sierra Ventures and a lecturer at Stanford University’s Graduate School of Business, said: “It’s certainly an art, not a science. If you think of mature financial services companies, they are typically valued with very clear financial metrics. In the start-up world, it’s very different because generally there aren’t a lot of metrics to use. It’s hopes and dreams.” The number of investors trying to learn the art is rising. Annual venture capital investment in fintech in the UK and Ireland was $265 million in 2013, an eightfold increase on 2008, according to a report last week by consulting firm Accenture.

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