Declining valuations across the fintech segment are spurring interest from potential buyers.
The pace of M&A slowed in the first half of 2022 in the U.S. fintech and payment sector, with 221 total deals compared to 258 in the first half of 2021, according to a new data analysis by S&P Global Market Intelligence.
Rowan Street Capital August 2022 Update
Rowan Street Capital update for the month of August 2022. Q2 2022 hedge fund letters, conferences and more Dear Partners, We typically prefer to communicate with you twice a year or sometimes quarterly, if we find there is important information that we want to share. Given the recent market volatility and a sizable drawdown that Read More
Fintech M&A Deals
Key findings from the newly released analysis include:
- Among the 20 largest fintech deals announced since the start of 2021, five deals, worth a total of $19.09 billion, were announced in 2022. The other 15 deals, worth a total of $65.91 billion, were announced in 2021.
- Late-stage fintechs facing more valuation pressure: The downward pressure on valuations appears to have a heavier impact on fintechs at later stages. The stock market volatility weakened companies’ interest in IPO and SPAC mergers, which are two of the major liquidity venues for venture capital-backed fintechs. Many of them are not profitable and rely on external capital to sustain growth.
Macroeconomic uncertainties alter investors’ appetite: When interest rates were lower, investments were poured into equities for higher yields. Fintech companies’ high growth attracted investors and pumped up valuations, even if they were losing money.
Image and article originally from www.valuewalk.com. Read the original article here.