Fintech will rise again

We’ve been taking our lumps in the fintech world for some time now. The rest of tech has recovered decently well but fintech unfortunately is still sitting in a tough position both in the public and private markets.

Multiples in fintech are generally lower than pure play software companies, but the public companies out there are sitting at fairly depressed levels.

In the private market space, there unfortunately is not a ton of activity. Primary rounds that are coming in seem to be mostly down rounds. Secondary buyers are typically staying away from buying into fintech right now.

I myself am caught personally in an annoying fintech issue. I had a relatively small amount of cash with Yotta which is a neobank on top of Evolve/Synapse. With Synapse announcing bankruptcy and a potential buyer pulling out, the bank is in a freeze right now. No one including myself can get our cash out and direct deposits are bouncing.

I am fortunate that I do not need this cash now and of course it is FDIC insured so I don’t expect to lose it. But if this drags out, we could see a situation where it may take months for me to get my cash out. I know others are not in a fortunate position like myself so they are going through worse troubles getting paid, paying rent, etc.

I hope this is resolved ASAP as it’s yet another stain on fintech.

Overall, I still remain bullish on fintech for the same reason I was 6 years ago when I joined Secfi. The incumbents in finance have yet to be disrupted and there is a lot of work to be done to enhance both business and consumer experiences. Our money system operates on decades old code and going deeper, we still have a long way to go in terms of fixing the plumbing in fintech.

Innovation will come and fintech will rise again.