Hi all, Abdul here.
I’m an early-stage investor at F-Prime Capital and an FTT community member. Hit me up if you are too :) At F-Prime, we’re a global venture capital firm that invests in healthcare and technology and have been investing in fintech for decades backing iconic companies like Alibaba, Flywire, Toast, Kensho, Quovo, and Snapdocs across our global platform. Julie wanted me to do a post on a new feature we just launched today, so without further ado…
The Launch of the F-Prime Fintech Index
Affirm, SoFi, Robinhood, Coinbase, Lemonade, Nubank and loads of other fintech companies have gone public over the past couple of years, meaning there are now dozens of fintech companies trading on the public markets. That’s one of the many reasons we’re excited to launch a Fintech Index. We’ve also published a State of Fintech report that talks about all 54 of the disruptive publicly traded fintech companies in the index.
Following a record year for fintech investments and exits, soaring stock prices in 2021 and a big dip to start 2022, there’s a lot going on! I can’t think of a better time to look at the sector’s performance and take stock of the tremendous disruption that has occurred over the last 10 years.
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The Fintech Index:
Abdul here again. Perhaps the most exciting news for the industry is that we are finally seeing fintech companies exit with increasing velocity. In 2021, there were a record 77 fintech companies that listed for over $393B. Eight of the ten largest fintech exits in history took place in 2021, and public fintech companies surpassed $1.3T in market cap. For the first time, we have enough public fintech companies to create a meaningful tracking index. The Index features fintech companies listed after 2000 that meet criteria for market capitalization, revenue growth, listing exchange, and liquidity. For a complete description of our methodology, visit the F-Prime Fintech Index website.
The F-Prime Fintech Index companies trade at 11x average revenue multiples and have realized 62% average annual revenue growth. The F-Prime Fintech Index will serve as a benchmark for the development of this rapidly maturing sector and closely track the leading disruptors. The F-Prime Fintech Index has outperformed the S&P 500 by 1,000 percentage points since January 1, 2015 (this does not account for fintech companies’ initial 90-day performance as the stock season). Historical returns do not signal future performance, but wow has fintech had quite the run! We also let you break it down by category and exit type on our website (SPACs vs. IPOs vs. Direct listings).
- Fintech disruptors generated the majority of industry growth over the past decade and in aggregate are capturing significant market share.
- These disruptors have raised significant capital in private markets ($119B+ in 2021) with mega rounds in fintech becoming common (300 $100M+ rounds in 2021)!
- Payments and banking were first to ignite, but startups and venture firms are now active across all financial sectors. Lending, wealth management and insurance received increased capital flow in the mid-2010s and proptech and crypto/blockchain soon followed.
- The fintech companies are exiting to public markets with increasing velocity and the market is rewarding them in many cases, in both amount raised and revenue multiple. Public fintech companies attained $1.3T in market cap in Q3 2021. This declined to $1T at year-end and has been down to $700B by the end of January as growth stocks got hit hardest to start 2022.
I could keep going, but Julie tells me there are only so many words I can write per newsletter. I’m so excited to finally share this with you all though, and please reach out on Twitter or in the FTT Slack with any questions or thoughts you might have :)