Fintech's Next Big IPO: Is It What You Expect?

The Next Fintech to Go Public Might Surprise You

This week in the world of fintech, we saw Human Interest, a company focused on 401k plans for small and medium-sized businesses, secure a hefty $267 million funding round. This puts them firmly on the path to a public listing, although no timeline has been set.

Human Interest has been on a rapid growth trajectory, having raised several rounds of funding since its Series C in 2020, and even secured a minority stake investment from BlackRock earlier this year.

Unicorn Watch: Fintech Unicorns are Scarce

While Human Interest makes headlines, it's worth noting that fintech unicorn creation has slowed considerably.

CB Insights' State of Fintech Q2 Report reveals that only two new fintech unicorns emerged in the second quarter of 2023, a far cry from the 49 born in the same period in 2021.

Altruist, a custodian for investment advisors, and Pigment, a business planning platform for large companies, are the two recent additions to the unicorn club.

Will 2024 see a resurgence of fintech unicorns? We'll have to wait and see.

More Funding Rounds and Acquisitions

Fragment, a digital ledger API startup, attracted $9 million from prominent fintech infrastructure investors.

Coast, a financial services platform for transportation, raised $40 million in a Series B funding round, building on their $25 million venture round just four months prior.

Astor, a personal finance platform for women, secured $1.4 million, while Slope, a B2B payments platform, landed $65 million from JP Morgan Payments.

Matera, a Brazilian company specializing in instant payments and core banking software, received a $100 million investment from Warburg Pincus.

Indian Fintech Struggles and Acquisitions

Paytm, an Indian fintech giant, is facing headwinds, reporting a 36% decline in revenue and a more than doubled loss in the first quarter. The company attributes this to regulatory challenges.

Deel, a rapidly growing payroll provider, continued its acquisition spree, adding Hofy, a London-based office equipment provider for remote workers, to its portfolio.

Pesa, an African remittance fintech, is close to launching in the US after securing the necessary licenses, following its recent expansion into 27 European countries and success in Canada.

Key Takeaways:

• The fintech landscape is dynamic, with new funding rounds and acquisitions happening regularly.

• The emergence of new unicorns remains a challenge, suggesting a more cautious approach to investment.

• Regulatory challenges can significantly impact fintech companies, as seen in Paytm's case.

• Globalization is a trend in fintech, with companies like Pesa expanding their reach to new markets.