A weekly five-point roundup of critical events in fintech, the future of finance and the next wave of banking industry transformation.
What happened: “Adyen shares surged the most since its trading debut after the payments giant unveiled new growth targets and offered a detailed pathway to achieve them, a key sign that the company is intent on winning back investor confidence.”
Why it matters: Insane revenue projections are so 2021. Especially in fintech, where any company unlucky enough to SPAC in the past two years has seen its value drop precipitously. Adyen execs seem to actually have a sense for the moment and are being rewarded for being more cautious, more responsible, and more transparent, now that they’ve also agreed to the industry standard of quarterly, rather than semi-annual, reporting.
What’s next: Other financial leaders at other fintechs will take notice of what the analysts and market prefers. (By Sara Jacob, Bloomberg)
Someone Turned the Fintech Funding Spigot Back On
What happened: “There were at least three nine-figure funding rounds in the fintech space announced over the past week. It’s rare enough these days to see ONE nine-figure round, much less two or three.”
Why it matters: Nearly $650 million in funding in one week for three companies, two of which are located outside the U.S., isn’t exactly a return to the dizzying highs from two years ago. It is, however, a sign that some amount of enthusiasm is returning to the market for later-stage investing.
What’s next: Everything trickles down. If planned new IPOs actually happen, and aren’t disastrous, expect a longer line of investors willing to enter into later rounds, in hopes they have better odds of an exit. (By Mary Ann Azevedo, TechCrunch)
Even Switzerland Isn’t Sure How to Regulate Its Biggest Banks
What happened: A newly released government review shows that Switzerland, the land of safe banking, may have dug its own grave when it comes to the demise of its premiere financial institution, Credit Suisse.
Why it matters: “Switzerland has begun an examination of its ‘too big to fail’ banking legislation, and its role in what went wrong with Credit Suisse, to make sure the country’s remaining globally competitive bank, UBS, doesn’t encounter the same fate…The Swiss experience is likely to feed into the debate about bank capital—and how much is necessary. The issue gained fresh currency in the U.S. when Silicon Valley Bank collapsed in March, a week before Credit Suisse.”
What’s next: Capital requirement conversations in Zurich are like debates over a baseball player’s legacy in Cooperstown. Switzerland’s banking sector is five times the size of its economy, so anything it decides will have ripple effects the world over. (By Margot Patrick, The Wall Street Journal)
Why Fintech Is Still a Regional Business
What happened: The director of Africa development for Ebanx, a major fintech player just starting to expand out of Latin America, explains why payments remain such a confounding regional issue.
Why it matters: Because part of the reason for enthusiasm in the space is the hope, perhaps unfounded, that one service or company could become a dominant force. This interview suggests it might never be that easy.
What’s next: The rise of country-specific instant-payment infrastructure. It may not create dominant companies, but it’ll at least create the conditions for many players. (By Rest of World)
MoneyLion Shows That Diversification Matters
What happened: The financial app revealed third quarter earnings, showing strong revenue growth and a more diversified product mix.
Why it matters: Interest rates impact on loans has led all companies like MoneyLion, LendingTree being the biggest example, to try to find other ways to deliver revenue. The flip side is that now MoneyLion can offer high-yield savings that were previously unavailable in a ZIRP environment.
What’s next: The rise of the “solutions-based model” for all finance apps. (By PYMNTS)