The once low IPO rate of fintech companies is now constant as mobile payment apps and online lenders become the norm.
Some say the home containment of consumers during the pandemic has accelerated the growth of these businesses and pushed them towards initial public offerings, which are seen as the signal that a business has matured. Companies, in regulatory filings, indicate that the rise of smartphones has made the rise inevitable.
Fintechs joining the ranks of publicly traded companies with billion dollar bids this month include San Francisco-based lender SoFi Technologies Inc. and payment card provider Marqeta Inc. of Oakland, Calif. . SoFi raised $ 2.4 billion, while Marqeta accumulated $ 1.2 billion.
“Investors want to look for the next PayPal,” said James J. Angel, associate professor at the McDonough School of Business at Georgetown University, in an interview. “The real question is: ‘Why did investors take so long to discover fintech? “”
PayPal Holdings Inc. of San Jose, California, whose founders Max Levchin and Peter Thiel met after a talk Thiel gave at Stanford University in 1998, went public in 2002. It was quickly acquired by eBay Inc. until it was transformed into a separate company in 2015. Since then, PayPal’s stock price has increased by approximately 700%.