Fintech revenue concentration

One trend that I’ve been noticing is that many fintechs that raised money at large valuations in the last 2 years are now in a difficult situation with flat or declining revenue. The common theme here is that a lot of these fintechs had large concentration of customers in the crypto space.

With the crypto boom in full force the last 2 years, many fintech startups had massive revenue spikes as they provided services necessary for other crypto startups to operate. Think of all the things that you need to run a crypto exchange for example: payments, KYC, security, etc.

Now as crypto trading and volume has declined massively, we are starting to see the ripple effects throughout the fintech ecosystem as well.

Like I wrote on Tuesday, many companies will be okay as they perhaps just accelerated revenue. If you Zoom out and average out the growth, it may still be a healthy growth rate for a company.

I am still long fintech, but there’s going to be many bumps and bruises along the way. Fintech will be back and healthier.