Could 2024 be the year for fintech IPOs? Quite possibly, according to F-Prime Capital’s State of Fintech 2024 report.
F-Prime — a VC firm with more than $4.5 billion in assets under management that tracks the performance of emerging, publicly traded and private financial technology companies — naturally remains bullish in the fintech space, noting that:Overall, fintechs have captured <10% of financial services revenue, yet many scaled-up private fintechs are generating $1B+ in revenue, are still growing rapidly, and are expected to go public.”
“Many major companies are now filing or considering going public,” says F-Prime.
To be clear, when F-Prime refers to fintech, it combines financial technology and crypto/blockchain startups. Here at TC, we tend to split our coverage of the two, although arguably, crypto falls under the fintech umbrella. For the purposes of this article, however, we’ll focus on just a few of the non-crypto-focused companies that have the potential to go public this year.
Whether any of these companies will actually take the plunge remains to be seen. We have to say we’d be thrilled to have even one file this S-1 to give us more insight into how much money these companies are (or aren’t) really making.
Peak
As reported by Dallas Innovates last December, “two years after trying to go public through a SPAC merger that valued it at $4.7 billion post-money, Apex wants to do it the old-fashioned way with a direct SEC filing…TThe stock clearinghouse filed confidentially with the SEC, saying “the total number of shares to be offered and the price range for the proposed offering have not yet been determined.”
Film
In January 2023, it was reported that Stripe had set a deadline of 12 months to go publiceither through a direct IPO, or in continuation of a private market transaction such as a fundraising event and tender offer.
Well, it’s been 12 months and we haven’t heard anything about an IPO. But the payments giant raised more capital last year. Last March, Stripe announced that it had raised over $6.5 billion in Series I funding at a $50 billion valuation. It was previously valued at $95 billion, giving it status as one of the highest-valued private fintech companies in the world. In November 2022, Stripe laid off 14% of its staff, or about 1,120 people. But fintech continues to grow. Last June, TechCrunch reported that Stripe had acquired a (non-fintech!) startup and announced the expansion of its credit publishing product.
Klarna
Swedish fintech Klarna confirmed to TechCrunch last November that it was taking steps “toward an eventual IPO.” The company said it had begun a process for a restructuring legal entity to set up a UK holding company “as an important early step” in its plans for an initial public offering, according to a Klarna spokesperson. The move came after positive third quarter in which Klarna turned a profit and reported 30% higher revenue of around $550 million. Creating a new legal entity at the top of the company’s corporate structure would allow it to go public more easily, the spokesman added. Its most recent valuation was 6.7 billion dollarswhich decreased by 85% from a A valuation of $45.6 billion was boasted a year ago.
(Photo by Noam Galai/Getty Images for TechCrunch)
Lendbuzz
Lendbuzz, a fintech company that applies artificial intelligence to automatically provide loans to people with no credit history, in December “hired investment banks for an IPO which could value it at more than $2 billion,” as reported by Reuters. In June 2021, TechCrunch had reported that the automatic funding platform had raised $300 million in debt financing and $60 million in financing.
Chime
Rumors have swirled for some time that Chime is looking at public markets. Once assessed to 25 billion dollarsneobank was initially, As TickerNerd reports, “all set for a March 2022 debut at a valuation between $35 billion and $45 billion,” but then the markets turned. By November 2022, the company had announced it was laying off 12% of its workforce, or about 160 people. Recent reports peg the company’s valuation close to $6.7 billionand it’s possible that Chime will decide to take the plunge this year, considering it was to enter the market in late 2023, according to Investing.com.
Image Credits: F-Prime Capital
Checkered fabric
Last October, TechCrunch reported that He had plaid hired former Expedia CFO Eric Hart to serve as its first chief financial officer — usually a critical step in a private company moving toward public markets. Then today, the company announced that it has nabbed Cloudflare’s head of product, Jen Taylor. to be its first president. When asked if the move meant the company was planning to go public, a spokesperson told TechCrunch: “I can confirm that a potential IPO is a milestone we’re tracking, but we don’t have any details or a timeline to share beyond that. .” Plaid started as a company that connects consumer bank accounts with financial apps, but has since gradually expanded its offerings to offer more of a full-stack integration experience. It was nearly bought by Visa for $5.3 billion before regulators put the brakes on in this deal – which some call a blessing in disguise.
Image Credits: Ross Marlowe/TPG for TechCrunch
Rippling/Gusto/Deel
The HR technology space it got really hot, really fast and these three companies are some of the hottest in the space. Ripple last March They were able to secure $500 million in new funding as the SVB was melting. Last June, we discovered that Gusto in its most recent financial year (the 12 months ending April 30, 2023) had revenues of over $500 million. In January 2023, Deel revealed that it had reached $295 million in annual recurring revenue (ARR) by the end of 2022. By November, this figure had been reported reached 400 million dollars. Interestingly, Rippling has been vocal about its competition with the other two companies. At TechCrunch Disrupt 2022, CEO Parker Conrad talked about Rippling being entering Deel territory. Even as of 2020, Rippling was chasing after Gusto a billboard stating: “Overcoming Gusto? Presto change-o.”
Brex/Ramp/Navan
The spend management space is another crowded one with many players vying for market share, including Brex, Ramp, Airbase, Navan (formerly TripActions) and Mesh Payments, among others. So far, Navan is the only one who has made it this far the confidential filing for an IPO — at a valuation of $12 billion. But, that was in September 2022 and we haven’t heard anything on that front since. Last December the company laid off 5% of its staff, or 145 people. Brex, who was worth $12.3 billion two years ago, had two rounds layoffs over the past 18 months, and is reportedly working to reduce its cash burn. Staircase raised $300 million to a 28% lower valuation of $5.8 billion last August. So far no staff has been laid off. When asked about IPO plans, CEO and co-founder Eric Glyman recently told TC the company was “excited to explore the IPO process eventually, but doesn’t have an active timeline around it.”
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