Public Fintech Firms Deliver Strong Performance in 2024 – Research Study

PitchBook has recently released its report, entitled Fintech: State of the Industry 2025. The update aims to offer a wide lens on fintech’s pulse, funding flows, and key trends.

Key takeaways from the PitchBook research report on Fintech are as follows:

  • Public fintech companies delivered a strong performance throughout 2024, with all our cohorts achieving positive median returns. High-growth companies, particularly those demonstrating improved unit economics, outperformed the broader market. Our standout cohorts were neobanks, brokers & crypto; insurtech; and high-growth fintech.
  • In private markets, median pre-money valuations surged by 94.4% in 2024, reaching $35 million compared with $18 million in 2023. Growth was seen across all funding stages, though we believe this is because down rounds are not being actively disclosed, while up rounds are.
  • AI is rapidly transforming segments like regtech, wealthtech, banking, and the CFO stack, while finally making inroads into traditionally entrenched sectors like capital markets. Meanwhile, the rise of agentic AI is pushing optimization even further by automating complex tasks and workflows, benefiting both enterprises and consumers. The fintech sector continues to normalize from peak levels in 2021. Fintech startups secured $29.5 billion of venture capital in 2024, denoting a 13% decline from the $34 billion seen in 2023.
  • Investors continue to favor B2B over B2C fintech models, with enterprise-focused fintech companies accounting for 41% of 2024’s venture capital deal value. However, consumer fintech companies experienced a resurgence this past year, capturing their highest share of total fintech VC funding since 2021.
  • Sectors that saw the highest funding levels in 2024 included alternative lending & credit, with $8.1 billion; payments, with $4.4 billion; and the CFO stack, with $4.3 billion. The largest deals for the year belonged to a mix of consumer and enterprise fintech companies, with Abound’s $999.6 million Series B (composed of debt and equity) and Tabby’s $950 million Series D ($700 million debt, $250 million equity) topping the list.

PitchBook said that they recorded “$18.2 billion of disclosed VC exit value across 219 deals in 2024, denoting YoY increases of 140.7% and 5.3%, respectively.”

Exit values increased from 2023 levels, driven primarily by IPOs “from ServiceTitan, Ibotta, LianLian DigiTech, MobiKwik, and Baiwang.”

PitchBook added that the IPO market is also expected to “recover in 2025, with a strong pipeline of fintech companies such as Chime, Klarna, and Toss poised for market entry.”

Some other key points from the PitchBook report focused on Fintech:

  • Regulatory challenges, particularly following the Synapse collapse, have slowed sales cycles and deterred some banks and fintech companies from pursuing partnerships. While for some a deregulatory shift is generally anticipated from the incoming Trump administration, the future of financial oversight remains uncertain, keeping the industry cautious.
  • The fintech sector continues to normalize from peak levels in 2021, adjusting to more sustainable levels of capital deployment and valuations. The industry has demonstrated considerable resilience through a period of rising interest rates, constrained capital markets, inflationary pressures, exacerbating geopolitical tensions, and growing—yet unclear—regulations.

PitchBook also mentioned in its detailed report that following the zero-interest-rate-policy (ZIRP)-induced hype cycle, many previously “left-for-dead companies,” such as neobanks, have staged incredible turnarounds, significantly “improving their unit economics and generating positive free cash flow.”

This has been reflected in the stock market; shares of most fintech
companies were rewarded with “positive YTD returns in 2024, particularly those demonstrating profitability.”

Still, the industry is likely not past its challenges, and the sector “will probably not return to the hypergrowth era of the post-pandemic boom.”

PitchBook further noted that plenty of startups are still “conserving runway as they struggle to secure their next round of capital or find a strategic acquirer.”

Some of these companies are now emerging with the news “that they will cease operations, as seen by Tally, Bench, and Level in 2024.”

Regulatory uncertainties, exacerbated by the fallout from Synapse’s collapse, are further “slowing sales cycles and discouraging partnerships.”

PitchBook pointed out that while the incoming Trump administration is expected to favor deregulation, the outlook for financial oversight “remains ambiguous, keeping many industry stakeholders cautious.”

Looking ahead, PitchBook said that they remain “optimistic about the future of the industry.”

The researchers added that VCs are raising new fintech-focused funds, and their ongoing conversations with investors reportedly suggest “that many are more bullish than ever on the emerging innovations in the sector.”

PitchBook concluded in its extensive report that the IPO market appears to be poised for a recovery in 2025, given “higher public tech valuations, ServiceTitan’s success, and the extensive IPO pipeline of fintech companies that have stated they would like to go public, including Chime, Klarna, Toss, and Mynt.”



Sponsored Links by DQ Promote

 

 

 
Send this to a friend