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If you want the full essay 24 hours early, on November 30th, along with early comments from our community, share this post on Twitter tagging @fintechtoday_ and DM us your email address!
One of my biggest pet peeves about myself is the fact that I overthink a lot. Not about everything, but particularly about questions that seem much more complex than they are on the surface.
One such thing I’ve been contemplating is “are we in a fintech bubble, or are we seeing the next wave of fintech?” There’s a lot of evidence for and against both sides—high flying valuations for fintech companies across all stages, but soaring valuations in the public market too with massive growth.
The world is shifting dramatically, and so is the US economy. The user behavior that’s been imposed upon us is being cemented into our DNA. Another shutdown across the country would only further exacerbate these shifts towards digital, remote services across all industries, including financial services. Banks are raving about the efficiencies they are being forced to build in a remote work world.
Consumer startups are seeing unprecedented growth. Just one example is Current Bank, which just announced a $131 million Series C round led by Tiger Global. On October 24, 2019, Current Bank raised a $20 million Series B. There’s also Stripe, Robinhood, and B2B companies like Alloy.
Macroeconomic effects are unlocking new growth opportunities for fintech companies too as regulators are seeing direct benefits of letting fintech companies have more direct access to the financial system. Between accessing cheap pools of capital though the SBA and granting bank charters to technology driven financial institutions, the US government’s stance on fintech is changing.
This is not an overnight phenomenon; the groundwork has been laid for years. Merchants have been slowly adopting contactless payment terminals over the last 3-5 years. Infrastructure companies have spent the last 2-3 years solving problems to unlock innovation in consumer fintech companies. You now see some of those companies selling for billions of dollars—acquisitions so potentially meaningful for the industry that some have caught the attention of regulators.
I’m much more interested in focusing on what’s going on now and seeing what may happen. I have no idea, but I think it’s a fun thought exercise that I hope provokes some questions for you too.
We’re releasing this longform essay next Tuesday, December 1st, but please feel free to send me your thoughts on this question at ian@fintechtoday.co. We’re going to be featuring thoughts from our community in a follow up post.
That’s it for today—back to writing!
