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In an Alphaville guest post an investment banker argues that fintech valuations will fall steeply across the board this year. The article cites some good data on multiples and highlights the "curse of comparability" to businesses like OnDeck and Lending Club.
Risk is increasingly being priced into the valuations of private fintech companies. Klarna’s latest valuation of 5-6x revenue compares with a 7.5x revenue multiple achieved 2-1/2 years ago. Similarly, iZettle, the point-of-sale technology vendor, looks valued at 8-9x revenue, while Adyen, a competitor, priced at 10x revenue in a January 2017 funding round, all according to PitchBook. While these multiples are still much higher than so-called legacy players, they are no longer at “altitude sickness” levels completely unrelated to performance. It’s clear that fintech investor over-exuberance has cooled somewhat.
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