The last two years have seen an unprecedented surge in value among fintech startups across the board. Spurred on by a renewed interest in digital payment strategies inspired by global COVID-19 mitigation policies, the valuation of companies that promised faster and easier payments or investment management sharply increased, hitting a little under $50 billion in 2020 and $132 billion just a year later.
In the blink of an eye, all of that success seems to have been reversed. With economic disturbances playing havoc with the markets at large, the tech sector has been hit harder than most, and fintech startups have already lost all the progress they’d made since 2020.
The signs of this decline are being felt across the industry, with Klarna laying off a tenth of its workforce and MainStreet facing a 60% decline in valuation after its own round of layoffs.
As Sheel Mohnot of Better Tomorrow Ventures put it: “Fintech probably grew the fastest in the last two years in terms of valuation. As we reset to how it was a few years ago, fintech has the farthest to fall.”