Online lenders buck the trend as fintech values fall
The valuations of the largest listed fintech firms have declined but online lenders are bucking the trend.
Analysis by advisory and investment firm GP Bullhound found its fintech index decreased by $34.4bn (£25.4bn) in the 12 months to September 2021.
It said the biggest share of losses was from PayPal and Shopify, which saw their market capitalisations decline by $36.7bn and $12.5bn respectively.
However, listed peer-to-peer lending platform Funding Circle and P2P-lender-turned-online-lender Lending Club actually grew in value over the period.
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UK-listed lender Funding Circle’s market capitalisation was flat at around $700m during the period while Lending Club’s rose by $1bn to $2.8bn in the US.
The report from GP Bullhound said fintech firms had experienced a record third quarter of fundraising and mergers and acquisitions worth $42.5bn, and suggested buy-now-pay later and impact investing are becoming major fintech markets.
“Impact investing will soon move mainstream with a significant volume of investment already ongoing and expected to this asset class in coming years,” the report said.
“With impact investing going mainstream, technology is key to meet investors’ environmental, social and governance expectations.
“Specific fintech segments such as investment apps for instance have a unique position to leverage technology and data to drive impact investing.”
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