FinTech innovators and commerce enablers 2022

We are pleased to present our views on the FinTech landscape, with an aim to enhance transparency and communication between FinTech companies, as well as financial and strategic investors.

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Despite macro-headwinds related to geopolitical, supply chain, labor, and interest rate shocks (the latter materially contributing to reduced valuations), FinTech innovation continues to see strong funding levels (above records in 2019-’20) with public payment players demonstrating high growth and margins trading at 12x-15x forward revenue.
As FinTech companies compete with traditional financial services companies, technologies leveraging personalization, automation, and predictive analytics are gaining traction.

Key trends:
  • Digital-only banks are expected to further disrupt traditional banking through greater personalization, flexibility, and customer experience
  • FinTech players are likely to make increasing use of AI and ML for fraud detection and digital transformation
  • Blockchain is disrupting the payment sector; giants such as Microsoft, AT&T, and Twitch have adopted blockchain technology to enhance payments
  • FinTech players are increasingly harnessing DeFi, automated underwriting, and alternative lending (such as BNPL) for a seamless payment and lending experience for customers
  • After a record year, the FinTech space took a breather during H1’22, with 174 private placements (vs. 303 during H1’21) averaging $97m per transaction. The most active investors since 2020 include Tiger Global, SoftBank, Sequoia, Accel, and Insight Partners, among others. While 2022 financings are down y/y, they remain above levels seen in 2019 and 2020