7 days ago
Fintechs enter new stage of profitability
The global fintech has enetered a new chapter defined by a rise in profitability and the emergence of scaled fintech and an "intensified focus on profitable growth".
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These are the findings from the third Global Fintech Report co-authored by Boston Consulting Group and QED Investors.
The report found that fintech revenues grew by 21% year-on-year, an increase on the 13% growth of the previous year.
Furthermore, EBITDA margins for public fintechs grew by 25% with 69% of fintechs achieving profitability, as opposed to less than half of the fintechs in the previous year that acheived the same status.
According to the report, which was based on interviews with 60 fintech executives, the results come amid a fintech environment in which funding and valuations stabilised and funadamentals "improved sharply".
Nevertheless, the report also found that there is still plenty of room for further growth given that fintech has only penetrated 3% of global banking and insurance revenue pools, albeit those fintechs are growing at around three times the rate of incumbent institutions.
The report also found that funding and revenue is highly concentrated - 60% of all fintech revenue is generated by less than 100 "scaled players".
In terms of verticals, payments represents the vast majority of fintechs ($126bn), followed by challenger banks ($27bn), crypto trading ($16bn) and BNPL providers ($8bn).
