Could 2024 be the year that fintech companies go public? The State of Fintech 2024 study from F-Prime Capital says it’s possible.
F-Prime is a venture capital firm that manages more than $4.5 billion and keeps an eye on the progress of new, publicly traded, and privately held financial technology companies. The firm is still very optimistic about the fintech space, stating that “In aggregate, fintech companies have captured ~10% of financial services revenue, yet many scaled private fintech companies are generating $1B+ revenue, still growing quickly, and are expected to list in public markets.”
“A lot of big companies are filing to go public or are thinking about it,” says F-Prime.
I want to make it clear that when F-Prime talks about “fintech,” it means both financial technology and crypto/blockchain companies. We at TC have tended to keep our coverage of these two topics separate, though crypto does, in a way, fall under the fintech umbrella. Anyway, for the sake of this article, we’ll only talk about a few of the companies that aren’t crypto-focused but could go public this year.
It remains to be seen if any of these companies actually go for it. We’d be thrilled if even just one of them filed that S-1 statement, which would tell us more about how much money they are (or aren’t) making.
Texas Innovates wrote in December of last year that “two years after trying to go public through a SPAC merger that valued it at $4.7 billion post-money, Apex is looking to do it the old-fashioned way with a direct SEC filing.”The firm that clears trades in stocks told the SEC in a secret filing that “the total number of shares to be offered and the price range for the proposed offering have not yet been determined.”
In January 2023, it was said that Stripe had given itself 12 months to either go public through a straight listing or to do something on the private market, like a tender offer or a fundraising event.
We haven’t heard anything about an IPO in a year. The payments giant did get more money last year, though. In March of last year, Stripe said it had raised more than $6.5 billion in Series I funding, which put the company’s value at $50 billion. An earlier estimate put its worth at $95 billion, making it one of the world’s most valuable privately held fintech companies. Around 1,120 people were let go by Stripe in November 2022, which was 14% of its staff. But fintech keeps growing in new areas. TechCrunch revealed in June of last year that Stripe had bought a (non-fintech!) startup and was going to add credit to its issuing product.
Klarna, a Swedish fintech company, told TechCrunch in November of last year that it was taking steps “toward an eventual IPO.” A Klarna spokeswoman said the company had started the process of reorganizing its legal entities to create a holding company in the UK. This was seen as “an important early step” in its preparations for an IPO. The move came after Klarna had a good third quarter in which it made a profit and reported around $550 million in higher sales, up 30%. The spokesperson also said that the company would find it easier to go public on a stock market if it created a new legal entity at the top of its corporate structure. It was worth $6.7 billion at the end of last year, 85% less than the $45.6 billion it said it was worth the year before.
Let’s Lend Money
Lendbuzz is a fintech business that uses AI to help people without credit histories get auto loans. According to Reuters, the company “hired investment banks for an IPO that could value it at more than $2 billion” in December. TechCrunch said in June 2021 that the car finance platform had raised $60 million in funding and $300 million in debt financing.
Ring A Bell
There have been rumors for a while that Chime wants to get into the public markets. The neobank was once worth $25 billion and was “all set for a March 2022 debut with a valuation between a whopping $35 and $45 billion,” according to TickerNerd. But then the markets changed. By November 2022, the business had said it was letting go of 160 workers, or 12% of its staff. According to recent reports, the company is worth closer to $6.7 billion. Chime could decide to go for it this year, since it was supposed to enter the market in late 2023, according to Investing.com.
Put On Plaid
TechCrunch revealed in October of last year that Plaid had hired Eric Hart, who used to be the CFO of Expedia, to be its first chief financial officer. This is a very important step for a private company that wants to go public. Then, today, the business revealed that Jen Taylor, Cloudflare’s chief product officer, would be its first president. A company spokesperson told TechCrunch, “I can confirm that an eventual IPO is a milestone we’re tracking towards, but we don’t have any details or a timeline to share beyond that.” This would mean that the company was planning to go public. Plaid started out as a business that linked personal bank accounts to financial apps. Since then, it has been slowly adding more services to provide a more complete setup process. Visa was almost going to buy it for $5.3 billion, but officials stopped the deal. Some people see this as a blessing in disguise.
Rippling, Gusto, And Deal
The HR tech space heated up very quickly, and these three companies are among the hottest in it. In March of last year, when SVB was going down, Rippling was able to get $500 million in new funds. We learned in June of last year that Gusto made more than $500 million in sales during its most recent fiscal year, which finished on April 30, 2023. Deel said in January 2023 that it had hit $295 million in annual recurring revenue (ARR) by the end of 2022. That amount was said to have hit $400 million by November. It’s interesting that Rippling has made a big deal out of its competition with those two businesses. At TechCrunch Disrupt in 2022, CEO Parker Conrad talked about how Rippling was moving into Deel’s space. If you go back to 2020, Rippling went after Gusto with a sign that said, “Outgrowing Gusto? “All right, switch it up.”
There are a lot of companies competing for market share in the spend management space as well. Some examples are Brex, Ramp, Airbase, Navan (formerly TripActions), and Mesh Payments. Navan is the only one who has gone as far as filing for an IPO in secret, and they are worth $12 billion. But that was in September 2022, and we haven’t heard much since then. The company fired 145 people, or 5% of its staff, in December of last year. Two years ago, Brex was worth $12.3 billion. In the last 18 months, the company has laid off workers twice and is allegedly trying to cut down on its cash burn. Back in August, Ramp raised $300 million at a value 28% lower than its current level of $5.8 billion. It hasn’t fired anyone yet. Recently, CEO and co-founder Eric Glyman told TC that the company was “excited to explore the IPO process eventually, but have no active timeline around that.” He was asked about plans for an IPO.
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