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Good summary on valuations for fintech companies from a panel of VC investors at Money 2020 (fintech's biggest event of the year). Some VCs believe that a few later stage fintech startups have become too big to be acquired and will have to look to the public markets for liquidity. Interesting stat: VCs invested $1.34b in online-lending startups, which was more than they invested in all of 2014.
Within online lending, Mr. Rampell said that so many start-ups have entered the market offering similar products that much of the capital being raised is being spent on marketing as a way to differentiate among many competitors as opposed to expanding operations. In the third quarter alone, venture capitalists poured $1.34 billion into online-lending startups, more than they invested in all of 2014, according to Dow Jones VentureSource. There was acknowledgment that the soft IPO market could make it harder for companies to realize gains on big funding rounds. Steve McLaughlin, founder at FT Partners, a boutique investment bank focused on financial technology, said that many “fintech” startups have raised enough capital and growth enough that they are in “no man’s land, in terms of there being no one to buy them.”
