FinTech Magazine - October 2022 | Page 51

G PRIVATE VESTMENT

F intech has enjoyed several boom years , raking in unprecedented amounts of capital and producing a high number of successful scale-ups . But with the economic winds seemingly turning , what will become of fintech and its ability to attract funds ? We take a look at private equity ( PE ), asking what the current market prospects are and revealing what fintechs should know in order to attract the right investor .

What ’ s the difference between venture capital and private equity ? Many fintech founders will be familiar with venture capital . It ’ s one of the most popular ways for up-andcoming fintechs to secure finance , and because of the relative nascency of the fintech sector until now , it has garnered more attention than private equity . As the name suggests , venture capital is oriented towards smaller , younger startups . Venture capitalists invest in promising companies in return for a smaller stake in the business , in the hope that it will grow rapidly in a short time and deliver a high return . fintechmagazine . com 51