Member-only story
Why you should think twice on Fintech…
What a time to be in Fintech. Fintech companies are going from strength to strength. Look at Revolut, Stripe, and Square. Not only has this been the most buoyant industry for VC investment but an increasing number of Fintechs are now going public, spearheaded by Wise with its whopping £7.9bn valuation. This is a record-breaking listing, paving the way for other Fintechs to follow suit. All sounds great, right? This astronomical growth can’t continue forever so are we sitting in a bubble that’s about to burst? And what even is a “bubble”?
Let’s get our facts straight: a bubble is “an escalation of asset prices created by a surge in asset prices unwarranted by the fundamentals of the asset”. In simple terms, a bubble is when something has a very high valuation that’s unsubstantiated. Now this will always be true in Fintech and indeed many tech businesses, because the products themselves tend to be somewhat speculative. So, let’s get it out of our heads that a bubble is inherently a bad thing. However, an uncontrolled bubble is. Is this where we are with Fintech?
There’s no denying that 2021 has been the best year yet for the Fintech industry. The first half of 2021 saw UK Fintech firms raise $5.7bn in VC investment. Compared to the $4.3bn raised in the whole of 2020, we’re on track to double Fintech investment in 2021 vs 2020. This is supported by the…
