😱 Structural shift of capital toward private markets: select fintechs capture growth while others lag behind

😱 Structural shift of capital toward private markets: select fintechs capture growth while others lag behind

Forbes USA (and its Russian edition) analyzes the drivers behind the overvaluation of companies such as Stripe🇺🇸, Adyen🇳🇱, Shopify🇨🇦, and Ramp🇺🇸. Some experts suggest these firms would trade at lower valuations in public markets.

🔺 Context: most fintech companies that have gone public in recent years have experienced stagnation or declines in their share prices. However, over the past 12 months, the combined valuation of the top 10 publicly listed fintechs grew by just 2%, while the top 10 private fintechs saw an increase of 164%.

🔺 Historically, an IPO was considered the primary milestone for startups and investors, maximizing market valuation. Currently, thousands of private equity firms and venture capital investors are competing for deals in private markets, which are expanding at a faster pace than public markets.

🔺 One of the key drivers behind rising valuations among leading fintechs is the construction of AI-driven narratives. Companies such as Stripe and Ramp have actively promoted AI-related initiatives—including agent-based systems—helping to attract capital from sovereign wealth funds and pension funds. However, this strategy has not proven universally effective, as illustrated by the performance of Klarna🇸🇪.

🔺 This trend may lead to a decline in IPO activity and reduce opportunities in U.S. public markets. Additionally, there is a risk of overvaluation, particularly if expectations surrounding AI-driven growth are not realized.

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