Fintech startups can pose a significant dilemma for an investor looking to get in on the ground floor of the next big thing. Subject to constant speculation and reliably volatile, startups are prone to peaks and valleys that make it difficult to gauge the real value of a new fintech firm.
That’s where PYMNTS’ FinTech IPO Index comes in: by connecting the dots between real market data points, the Index is able to provide a relatively accurate measure of which trends are here to stay and which are likely to be swept away by the next major tech development.
Unfortunately for investors, the Index has indeed identified a major trend in the IPO prices of fintech startups . . . and that trend goes nowhere but down, down, down.
According to PYMNTS, notwithstanding the occasional rally, Nasdaq prices for fintech startups are down as much as 75% from last year. Notable examples of this charge into the red are Better.com and Thrasio, both of which have struggled to maintain funding while launching massive layoffs.
While there are obviously some exceptions to the trend – Upstart is a significant outlier in that its rates are rising even as approval rates plummet – VC money is slowing to a trickle in hopes of waiting out this downturn in the field.