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F-Prime Capital Releases its 2024 State of Fintech Report
CAMBRIDGE, Mass., Feb. 6, 2024 /PRNewswire/ -- F-Prime Capital today released its 2024 State of Fintech Report. This annual report offers an in-depth look at the private and public fintech sector's performance derived from the F-Prime Fintech Index, capturing trends, challenges, and opportunities that shaped the industry in 2023.
The report indicates the public fintech correction found its floor in 2022 and began to recover in 2023. However, that correction is still rippling through the private markets. In 2023:
- The F-Prime Fintech Index market cap reached $573B by year-end 2023, up from a $389B trough in 2022 but down from a $1.3T peak in 2021.
- The F-Prime Fintech Index performance was up 114% in 2023, but is still 60% off its 2021 peak.
- Public fintech enterprise-value-to-revenue multiples also began to recover, up from 3.7x at the end of 2022 to 4.8x by the end of 2023.
- Private market investment volume fell by nearly 50% and valuations trended down at most stages. High-performing companies continue to raise, but other startups delayed financings and we expect challenging fundraises, distressed sales, and shutdowns in 2024.
- M&A activity fell to its lowest level in five years - 2023 M&A volume was 72% less than 2021, and the largest fintech acquisitions of 2023 indicate lower overall valuation.
- Billion dollar revenue plus fintech companies are just gettin started and are growing on average 45% annually and more than three times the rate of public incumbents. We expect the IPO window to open in 2024 for high-performing scaled fintech companies like Stripe, Klarna, Circle.
"2023 was a year of recovery in the fintech landscape. The public fintech correction has largely played out and most sectors are showing signs of recovery. While regulatory pressures and market corrections posed challenges, they also prompted fintech companies to innovate and prioritize sustainable growth," said David Jegen, Managing Partner of F-Prime Capital's Technology Fund. "Looking ahead to 2024 and beyond, we are optimistic. A decade into the fintech era, it has become clear where startups have disrupted existing financial services and where they have been outmaneuvered or outlasted by incumbents. Whether they were introduced or popularized by startups or incumbents, innovations such as mobile banking, open data, software-based payments, buy-now-pay-later (BNPL), and commission-free trading have all reshaped business models and customer expectations. The impact of emerging technologies like crypto, real-time payments, and generative AI remains to be seen, but also holds the potential to disrupt the status quo."
Launched in 2022, The F-Prime Fintech Index tracks the performance of publicly traded fintech companies across payments, banking, lending, insurance, proptech, wealth and asset management, and B2B SaaS. In 2023, there were six delistings from the index and no new additions. As of January 1, 2024, the F-Prime Fintech Index comprises 49 companies, with a number of potential additions on the horizon for 2024. Access our full listing criteria here.
The F-Prime Fintech Index and the full 2024 State of Fintech Report are available for access https://fintechindex.fprimecapital.com/.
About F-Prime Capital
F-Prime Capital is a global venture capital firm investing in technology and healthcare. For over 50 years, we have had the privilege of partnering with great entrepreneurs building groundbreaking companies. In technology, we focus on enterprise software, fintech and frontier tech. While we are early-stage investors by choice, we back exceptional teams at any stage.
F-Prime Capital has over $4.5 billion under management and a global portfolio of more than 300 companies including Alibaba, Toast, Flywire, Quovo, Kensho, Vestwell, iCertis, Even Financial, Paidy, FutureAdvisor, Snapdocs, Canary Technologies, Recurly, Fireblocks, Canoe Intelligence, and ConnexPay.
F-Prime has offices in Cambridge, MA, San Francisco, CA, and London, UK. Please visit fprimecapital.com and follow us on Twitter and LinkedIn.
F-Prime is not offering investment advisory services nor is it offering to sell securities.
Media Contact:
Liang Zhao
Vansary for F-Prime Capital
[email protected]
505-720-6933
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SOURCE F-Prime Capital
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