Uber. Lyft. Pinterest. Zoom.
This banner year for venture-backed tech IPOs has been impossible to miss—and it's far from over. With major public listings like Slack and WeWork also on the horizon, 2019 is all but assured of smashing records for VC exit value.
But where is fintech amid the IPO boom?
The 10 most valuable fintech companies in the world are mostly between six and 10 years old, all with hundreds of millions raised (if not $1 billion-plus) and multibillion-dollar valuations. Yet, at the moment, not one of those unicorns seems particularly close to an offering.
When it comes to the biggest of the bunch, Stripe, co-founder John Collison said at a conference in February that the 10-year-old payments giant—valued at $22.5 billion with a $100 million round from Tiger Global in January—has no plans to go public.
Elsewhere, London-based money-transferring company TransferWise recently hit a $3.5 billion valuation in a $292 million secondary sale that gave a liquidity event to early investors in place of an IPO. The company is also profitable and popular, other reasons CEO Kristo Käärmann seems to be in no rush to go public.
PitchBook Emerging Tech analyst Robert Le, who covered the industry in depth in his recent fintech report, points to several reasons for the IPO aversion.
"The litmus test for fintech IPOs has been inconclusive, so investors are wary," Le said. "2018 IPOs like Adyen and IntegraFin are doing well, but GreenSky or EverQuote are down significantly. There is also plenty of available capital and investor appetite for mega-rounds."
Speaking of mega-rounds, here are some notable fintech fundings within the past year:
• SoFi recently raised $500M led by Qatar Investment Authority at a $4.8B valuation.
• Robinhood is reportedly raising $200M+ at a $7B+ valuation.
• Affirm raised $300M led by Thrive Capital at a $3B valuation in April.
• Coinbase raised $300M led by Tiger Global at a $8B+ valuation in October 2018.
Le noted that these valuable fintech companies are very focused on growth to compete with incumbent banks, either through the expansion of their current markets or through product diversification and building new business lines.
"However, these companies will still scale much slower than other tech sectors due to highly regulatory environments," he added.
An example of that was Robinhood trying to release a checking and savings product that was insured by the Securities Investor Protection Corporation. The SIPC said it wouldn't protect those accounts, so Robinhood changed course and filed for a charter with the Office of the Comptroller of the Currency to get its own banking license to eventually release products insured by the Federal Deposit Insurance Corporation. This process could take years, though, given the rate at which new banking licenses are issued.
Another headwind is the need to get individual state licenses for most financial services. Fintech insurance provider Oscar is undergoing this process.
So, while formerly PE-backed Tradeweb stands out as a strong fintech IPO exception this year—up about 67% from its April debut—it remains unclear when, or if, we'll see new venture-backed entrants come to market.
Featured image via alexsl/iStock/Getty Images Plus
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