The mood is very grim: Once-hot fintech sector faces IPO delays and consolidation
Summary
AMSTERDAM — Financial technology companies are putting IPO plans on hold and cutting expenses as fears of an impending recession cause a shift in how investors view the market. At the Money 20/20 conference in Amsterdam, bosses of major fintech players sounded the alarm about the impact of a deteriorating macroeconomic climate on fundraising and valuations. It comes as buy now, pay later firm Klarna is reportedly looking to raise fresh funds at a 30% discount to its $46 billion valuation, while rival group Affirm has lost roughly two thirds of its stock market value since the start of 2022. The tech sector has borne the brunt of a market sell-off since the start of the year, as investors digested the likelihood of a steep rate hiking cycle — which makes growth stocks future earnings less attractive. The big fear is that fintech growth will slow along with the economy at large as soaring prices force consumers to tighten their purse string.