“ US $ 12BN WAS INVESTED IN FINTECH BY PE ACROSS 144 DEALS IN 2021 – A NEW RECORD THAT ’ S SUBSTANTIALLY ABOVE THE PRIOR RECORD OF US $ 5BN IN 2018 ”
SAM LAWSON VP CAPITAL MARKETS , CROWDCUBE
“ However , PE currently sits on historic amounts of unallocated capital . Due to its breadth and relatively attractive financial profile , we expect fintech to continue to be one of the key areas of investment .
“ In the short term , private equity activity may concentrate on ‘ take-privates ’, investing in publicly traded fintechs that may have suffered from steep declines in the public markets . In the private markets , over the medium term , a souring venture capital market may present an opportunity for PE to step in to partner with unloved but otherwise healthy VC portfolio companies .” So what should fintechs know if they want to attract PE investment ? “ Revenue growth and profitability are central to attracting inward investment ,” Lawson explains . “ Now in particular , proving the ability to generate cash flow is vital to gathering investor interest .
“ In the short-term , VCs will focus resources on their existing portfolio companies , meaning the rate of new investment may slow . Fintechs should look to their existing investors to provide additional funding , but may also find solutions in alternative finance . Equity crowdfunding , for example , can be a source of additional capital following on from existing VC investors who may be re-upping .”
56 October 2022