Fintech and online marketplaces, a lucrative pairing

As consumer spending continues to shift rapidly online, online marketplaces are increasingly integrating fintech solutions to make it easier for consumers to complete purchases, and also develop new revenue streams.

Our new report on fintech-enabled marketplaces in partnership with Adevinta Ventures and Speedinvest shows that pairing financial services with online marketplaces creates outsized returns, the lines are blurring between fintechs and marketplaces, and there is still a lot of room for mutual growth.

Report - The future of marketplaces: fintech-enabled

Marketplaces + fintech

European marketplaces are now worth a combined €685B. While fintech is consistently the most funded vertical on the continent. With both sectors showing no sign of let-up in growth, what is happening at the confluence of fintechs and marketplaces?

Fintech-enabled marketplaces are proving to be the best of both. Fintech-enabled marketplaces have EV/Sales of 6.7x, compared to 5.3x and 4.6x for other marketplaces and financial services, respectively.

Venn diagram of marketplaces and fintech overlapping

With online marketplaces increasingly taking advantage of both “plug and play” embedded fintech solutions, as well as building fintech products in house, they are creating new monetization streams, improving user experience, and boosting customer retention.

Mathias Ockenfels, General Partner, Speedinvest, comments: “At Speedinvest, we have dedicated investment teams funding both marketplaces and fintech startups. Collectively, we’ve observed a clear trend: The merging of these two worlds. As the report shows, it’s proving to be an attractive proposition for founders and investors, alike.”

Motive and means

Fintech-enablement has been validated by soaring valuations of fintech products aimed at marketplaces (e.g. Buy Now Pay Later), and in addition, huge potential remains in serving un- and underbanked global communities.

Record investment in online marketplaces (€78B in 2021YTD) means that marketplaces have significant dry powder available to invest in building or acquiring new financial services in-house.

Chart of global VC investment in online marketplaces over timeMarketplaces funding

Online sales, accelerating adoption

Online marketplaces sales now account for 19.5% of all consumer spending, vs. just 13.6% two years ago. While this has been accelerated by the pandemic, it is a trend that was already well underway. And this adoption is playing into the hands of both online marketplaces and fintechs, as fintech startups in areas like payments, Buy Now Pay Later or escrow, take a cut of online transactions. 

Room for growth

Even in the most established markets, online marketplace sales have a long way to grow. In groceries for example, a $2T industry in Europe, online penetration has reached just ~5% in 2020 (up from 2% the year before). This offers a huge opportunity for both marketplaces, and their enablers.

Meanwhile un- and underbanked populations in emerging markets are rapidly coming online. There are even bigger growth opportunities for the confluence of marketplaces and fintechs ahead.

Jordi iserte, Investment Director at Adevinta Ventures says: “The long-term success of marketplaces depends on their ability to adapt and integrate fintech solutions into their platforms. This will allow for a seamless, frictionless experience, and ultimately benefit  customers. Fintech-enabled marketplaces are becoming the new norm and we are excited to take an active role in this growing market.” 

Report - The future of marketplaces: fintech-enabled