Fintech and crypto M&A craze
Fintech is prime for M&As.
2021 was defined by euphoria with more than $126B of VC funding in fintech. 2022 has seen a rationalization, the correction has arrived gradually with slowing funding from January till now. Last year also saw an impressive $536B of exit value, largely driven by IPOs and SPACs like Coinbase, Nubank, and Robinhood, but also huge acquisitions like Afterpay, Billdesk and Paidy.
This year things are definitely different. The recent market downturn has hit all tech stocks (Nasdaq down 32% this year), but fintech has felt the strongest hit being down more than 42%. Last year’s biggest public debuts, Coinbase and Robinhood, are down 86% and 77% respectively since their IPO. Almost no fintech startup is going public this year and we can reasonably expect the rest of the year to look similar.
But instead, M&A is booming. Q1 was the most active quarter ever with over 200 acquisitions. Cash-rich startups, and incumbents, are taking the chance to consolidate the market and buy cheap.
The crypto market turmoil, in particular, is opening the opportunity to acquire distressed or on the verge of bankruptcy startups, especially crypto lenders and exchanges. Crypto lender BlockFi is in talks to be acquired by FTX for $240M, it was last valued at $4.5B in August 2021 and Binance’s CEO is looking at ’50 to 100 deals’.
Who is gonna be next in the acquisition wave? Keep tuned for our fintech Q2 report coming out in the coming weeks for more insights! In the meantime, explore 300+ fintech acquisitions this year.