Online lenders buck the tide as fintech stocks tumble

Valuations of the biggest listed fintech companies have fallen, but online lenders are bucking the trend.

Analysis from advisory and investment firm GP Bullhound has revealed that its fintech index fell by $34.4bn (£25.4bn) in the 12 months to September 2021.

He said the biggest share of losses came from PayPal and Shopify, which saw their market capitalizations fall by $36.7 billion and $12.5 billion respectively.

However, listed peer-to-peer lending platform Funding Circle and P2P lender-turned-online lender Lending Club actually increased in value over the period.

Read more: UK fintech sector raises more in first half of 2021 than in all of 2020

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UK lender Funding Circle’s market capitalization was flat at around $700 million during the period, while Lending Club’s rose $1 billion to $2.8 billion in the United States.

GP Bullhound’s report says fintech companies had a record third quarter of fundraising and M&A worth $42.5 billion, and suggests buy now, pay later and save impact investing are becoming major fintech markets.

“Impact investing will soon become mainstream with a significant volume of investments already underway and expected in this asset class in the coming years,” the report said.

“As impact investing becomes mainstream, technology is key to meeting investors’ environmental, social and governance expectations.

“Specific fintech segments such as investment apps, for example, are uniquely positioned to leverage technology and data to drive impact investing.”

Read more: The government is stepping up its support for fintech

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