Faced with grim economic tidings, fintech firms across the industry are battening down the hatches to prepare for the worst. Companies and investors alike are desperate for a sign that recession may not be inevitable. Unfortunately, both startups and major fintech firms are showing real signs of strain.
In recent years, fintech startups with sufficient hype could count on building momentum from a successful IPO that would carry them through years of major expansion. At the moment, though, companies like British digital bank Zopa are postponing plans to go public until the market forecasts are a bit less grisly.
“The markets are not there—not for fin, not for tech,” said Zopa’s Chief Executive Officer Jaidev Janardana. “We will just have to wait for when the markets are in the right place. You only want to do an IPO once, so we want to make sure that we pick the right moment.”
Meanwhile, established firms like Klarna have been shedding large swaths of their workforce, and Stripe Co-Founder John Collison indicated that the company may have a hard time justifying its recent $95 billion valuation in the near future. Speaking at the Money 20/20 conference in the Netherlands, Collision advised fintech founders to ditch any plans they’d made in previous years.
“They definitely can’t do the 2021 [investor] pitch,” said Collision. “It needs to be a new pitch, a 2022 pitch.”
