Fintech valuation dip – Correction or crash?

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Over the past year and a half, the fintech sector has witnessed a massive slowdown, marked by stagnant growth, reduced venture capital investment, and falling valuations. Factors such as rising interest rates, rising inflation, and economic uncertainty have posed significant challenges for the sector. From Q3 to Q4 2022, fintech deals saw a sharp 52% drop, exceeding the overall 27% decrease in the venture market. With fintech valuations currently below their historical averages, a swift revival seems unlikely. In this blog, we expand upon our analysis from last year, which focused on public market fintechs, to encompass the noticeable downward trend that has now also permeated private markets. The great fintech adjustment The private market underwent significant upheaval in Q4 2022, and those ripples have definitely spilled into the early part of 2023. Prominent European fintech players, including Klarna, Checkout.com, and N26, witnessed drastic valuation reductions. Klarna, once Europe’s highest-valued startup, endured an 85% valuation drop, falling from $45B to a mere $6.7B in 2022. Similarly, Checkout.com underwent a 73% decrease, settling at an internal valuation of $11B by December 2022. Even N26, one of Europe’s celebrated fintech firms, faced a potential 67% markdown from its earlier $9.2B valuation as major […]

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