Chart of the day

Fintechs - private or public?

Fintech performance in the public markets

Source: Flagship Advisory Partners

The public markets have been a brutal environment for fintech companies over the past calendar year — especially for smaller fintechs, who have demonstrated, on average, larger falls in share prices and profitability then their larger counterparts.

Small cap fintechs thrived during the brighter days of 2017-2021, when investors were anxious for growth and willing to bet on potential. Today’s investors have seemingly cast aside growth potential and are investing instead in value, with the market punishing any results-based disappointments. For instance, we saw this payments company Worldline, who experienced a share price decline of more than 50% on 25 October 2023.

Given the figures above, could smaller fintechs be better suited to private, and more patient capital, and quite possibly, be better off staying private?