Business Talks Weekly’s Post

🥇 NEW: PitchBook’s latest Fintech & Payments M&A Report is out with new valuation research not done before. Link to the report is below. ⤵️ The heat came off the fintech buyout market in Q2. PE fintech buyouts decelerated to an estimated 12 deals in Q2, down 57% from Q1’s 28 buyouts, and down 37% from Q4’s 19 buyouts. Despite a soft Q2, buyouts in the past 12 months have been healthy, with an estimated 68 fintech deals compared with 2023’s 55, 2022’s 62, 2021’s 104, and 2020’s 72 buyouts. 🌤Lower rates would provide the first leg of a true PE revival, but adding a strong IPO & corporate M&A market would put us closer to 2021 levels. 🐳We expect more large fintech/payments buyouts, despite a lack of acceleration in the buyout count, as evidenced by (1) the acquisitions of Nuvei for $6.2 billion, Worldpay for $12.5 billion, and Coupa for $8.0 billion, (2) the presence of big PE such as Blackstone and Carlyle in the space, (3) and payments' strong revenue growth and margins. 🌊Using PitchBook’s proprietary PE take-private model we identified six publicly traded fintech/payments companies with the highest likelihood of being acquired by PE: nCino (7.7% takeout probability), AvidXchange (6.5%), Euronet Worldwide (5.3%), Corpay (4.7%), Remitly (4.4%), and BILL (4.2%). ☔️Corporate acquisitions remain subdued. Q2 saw 26 estimated corporate deals, compared with 26 in Q1 2024 and 25 in Q2 2023. We predict that corporate M&A will take two or more years to “come back” in full and will be driven by three factors: CEO confidence (heavily influenced by stock price); consistent economic/company operating performance; and FOMO - watching peers make acquisitions. 💵We examined the ratio of acquisition prices to employee head count (a proxy for revenue and profitability) from 2020 to Q2 2024 and payments companies logged the highest median valuation ratio at 1.61x, followed by financial services infrastructure at 1.40x, capital markets at 1.34x, CFO stack at 1.26x, wealthtech at 1.06x, regtech at 0.86x, and finally alternative lending at 0.86x. 🌎B2B (enterprise) payments also outperforms on exit value measures: We compared VC dollars invested in first-time financing rounds to eventual exit value to determine which subsectors generated strong returns for early investors. Enterprise payments led with a 2.1x ratio, followed by regtech at 1.6x, consumer payments at 1.55x, and financial services infrastructure at 1.06x. All other categories were below 1.0x. You can download the report here. https://lnkd.in/eYzBChuB

Check out this week's briefing! You'll find insights on Envestnet, Inc (specifically their underperforming subsidiary Envestnet | Yodlee) and how Bain Capital and Reverence Capital Partners are planning to grow the already large firm once they #takeprivate.

Let’s talk about exits in fintech. Although recent memory has been defined more by the lack of exits, we wanted to go back and look at the data from the most recent class of fintech exits to provide better context for founders and investors. The big takeaway: fintech as an industry has been defined by relatively consistent, large M&A transactions (approaching 20 per year) at an average value of $403M, and a few IPOs per year (2021 aside) at an average current market cap of $5.1B (as of March 2024). While it’s important to be ambitious and aim for those $1B+ outcomes, we also believe that founders and investors should take advantage of these unique M&A dynamics. For example, fintech represented about 1/3 of the top 100 IT software acquisitions. What does this mean? Practice valuation discipline. As companies approach $300M- $400M in company valuation, they risk (potentially unintentionally) getting cut off from the M&A market. Similarly, valuations over $2B should be for exceptional companies where the underlying fundamentals line up with public comps. The math around valuation can be the difference between a successful exit and one that is underwater. Fintech funds should not rely on IPOs alone to drive returns. This consistent and robust M&A cycle is a compelling aspect of the fintech market, and one where funds can get liquidity earlier for LPs. We expect the M&A path to become even more attractive to lean teams that don’t need to take on much outside capital, can grow efficiently, and achieve an outsized return. Much more is covered in the full report linked in the comments! And thanks to Axios for previewing the data in this Saturday’s newsletter. #venturecapital #fintech

Chime Financial reportedly plans to launch its initial public offering (IPO) in 2025.The FinTech company aims to do so in the United States but has not yet engaged banks for the IPO, Bloomberg reported Friday (March 22), citing unnamed sources.Chime did not immediately reply to PYMNTS’ request for comment.Chime has been considered an IPO candidate for years, according to the report. The company was valued at $25 billion in 2021 but then saw the technology boom fade as interest rates and inflation increased.Chris Britt, co-founder of Chime, said in December that the company was “as IPO-ready as a company can be” and was monitoring the conditions of the economy and the stock market, per the report. Now, the market for IPOs is recovering after two slow years, and tech companies are likely looking to accelerate plans to go public that they had previously delayed, the report said. It was reported in January 2022 that Chime was prepping for an IPO that was expected to arrive as early as the following spring.However, the company put its IPO plan on hold in February 2022 as the industry entered a “FinTech winter,” PYMNTS reported in November 2022. At the time of that report, Chime announced that it was cutting 12% of its staff in a move to ensure the long-term success of the company.

Chime Financial reportedly plans to launch its initial public offering (IPO) in 2025.The FinTech company aims to do so in the United States but has not yet engaged banks for the IPO, Bloomberg reported Friday (March 22), citing unnamed sources.Chime did not immediately reply to PYMNTS’ request for comment.Chime has been considered an IPO candidate for years, according to the report. The company was valued at $25 billion in 2021 but then saw the technology boom fade as interest rates and inflation increased.Chris Britt, co-founder of Chime, said in December that the company was “as IPO-ready as a company can be” and was monitoring the conditions of the economy and the stock market, per the report. Now, the market for IPOs is recovering after two slow years, and tech companies are likely looking to accelerate plans to go public that they had previously delayed, the report said. It was reported in January 2022 that Chime was prepping for an IPO that was expected to arrive as early as the following spring.However, the company put its IPO plan on hold in February 2022 as the industry entered a “FinTech winter,” PYMNTS reported in November 2022. At the time of that report, Chime announced that it was cutting 12% of its staff in a move to ensure the long-term success of the company.

Exciting News in the Financial World! Nasdaq's Groundbreaking $10.5 Billion Acquisition of Adenza! 💼💡 In this article, we explore how Nasdaq's strategic leap aligns with the evolving landscape of financial services, marking its transition into a fintech powerhouse. The acquisition positions Nasdaq to revolutionize risk management, regulatory reporting, and capital markets software, reflecting a commitment to innovation and global leadership. 🚀 🔍 Dive into the details and implications: https://lnkd.in/dgGjnpex As the financial industry witnesses dynamic shifts, Nasdaq's vision under CEO Adena Friedman takes a bold step forward. The deal not only reshapes the industry but also symbolizes a commitment to future-proofing amidst market complexities. 🔄📈 What are your thoughts on this strategic move? Authors: Maddalena Salterini, Cleve Lim, Lorenzo Villani, Polina Mednikova, Elias Emery, Guillaume Eelbode #Nasdaq #Adenza #Fintech #FinancialServices #Acquisition #Innovation #Leadership

Nothing like an IPO to mark a new chapter! Catch the story (and more) in the latest Papaya Global CFO Report. #FintechNews

🚨 PitchBook’s #Quarterly #Fintech M&A Review Is Here! 🚨 We’ve leveled up with new rich data sets on: ✔️ Big Bank M&A ✔️ Publicly Traded Fintechs M&A 📊 Key Takeaways: 🔹 #Corporate M&A gains momentum: #B2B fintech acquisitions jumped 42% YoY in Q3, signaling a sustainable recovery. 🔹 #PrivateEquity buyouts rebound: Buyouts surged 77% YoY in Q3, marking a clear recovery after four quarters of decline. 🔹 Public fintech #acquisitions stay slow: 2024 transactions remain consistent with 2023 levels but far below the 2018–2022 average. 🔹 Regulatory impact on fintechs: Major public fintechs (e.g., Visa, Mastercard) may grow cautiously under new administration policies. 🔹 Big Bank M&A set to grow: 2024 deals by the 30 largest US banks are expected to rise, driven by a lighter regulatory touch. 🔗 Don’t miss out—read the full report and leverage these insights for your strategy! 🚀

PitchBook's Q1 Quarterly FinTech M&A Report has officially been released! Takeaways / content: -PE fintech buyouts increased rapidly in Q1, outperforming the overall buyout market -Payments represented an outsized share of fintech buyouts -Corporate M&A improved slightly but still appears mostly stalled -Large corporate M&A is coming back + this should continue

BlackRock-backed fintech Trustly says IPO still at least one year out even as profits jump 51% #BlackRock #Fintech #Trustly #IPO #Profits #Financialnews #Investing #Technology #Growth #Success #Financeindustry #Global #Initialpublicoffering #Marketnews #Businessgrowth #Profit