Another day, another fintech IPO

What happened

2025 has seen more than a dozen fintech IPOs either realized or announced, from Chime Financial Inc (banking accounts), eToro Group (trading platform), and Circle Internet Group (stablecoin issuer) to Bullish (crypto exchange), and most recently, Klarna (buy now, pay later). Investor demand has been robust, with several offerings oversubscribed many times: Klarna’s IPO, for instance, was reportedly oversubscribed by >20×.

This echoes the 2020–2021 fintech IPO boom that brought close to 100 fintech companies to public markets, including high-profile names like SoFi (neobank and technology provider), Affirm Holdings Inc (buy now, pay later), Coinbase Global Inc (crypto exchange), and Robinhood (trading platform). While the volume of listings is much lower this time (and we do not expect it to reach the same level), the clustered timing and strong investor enthusiasm clearly rhyme with the past.

In both waves, many stocks enjoyed day-one pops before sliding back toward, or even below, their initial offer prices. Pricing discipline and post-IPO digestion matter. When too many companies rush to list at once, it can signal a late-cycle phase, as in 2021. The key question is whether this wave will follow the same late-cycle pattern or if the industry has matured enough to deliver different outcomes.

Let’s turn to the similarities and differences with the last wave, before assessing what the latest listings mean for the fintech industry as a whole.

Impact on our Investment Case

Who is going public now

The current wave feels less like a sudden rush and more like a resumption of IPO plans that were shelved in 2021–2022. Klarna, Chime, eToro, and Circle are all companies that had long hinted at public listings but postponed them during the downturn. Four years later, they return with more seasoned business models, tighter cost controls, and clearer unit economics.

Profitability is now front and center. Some newly listed entities are already profitable, while others have outlined a credible path to breakeven. This contrasts with the 2020-2021 frenzy, when fintech companies rushed to capture pandemic-fueled momentum at irrational multiples. For fintech companies, the growth-at-all-costs era in public markets is over.

The current macro environment also explains the quest for profitability. While U.S. equity markets are at all-time highs and investor appetite has returned, the macro and geopolitical backdrop calls for healthier company profiles. Upcoming interest rate cuts favor growth companies to some extent.

Investor dynamics and sector shifts

Fintech companies have shown that convenience and state-of-the-art user experience can attract millions of users to digital financial platforms. Many of today’s issuers plan to use IPO proceeds to reach their next growth milestone. Unlike in the previous wave, retail investors now have easier access to IPO allocations via online brokers, adding to institutional demand. In other words, customers of these platforms also become shareholders, aligning consumer and investor enthusiasm around the democratization of finance.

These IPOs also provide an exit channel for private equity and venture investors, who had been locked in during the post-2021 downturn. The valuation reset illustrates the shift in market discipline: Klarna’s ~$16bn market capitalization is a far cry from its $45bn peak private valuation in 2021. More broadly, sales multiples in fintech have compressed: late-2021 deals often priced around 8–10x revenues (with some IPOs like Affirm briefly trading above 25x), while today new listings typically come at 3–6x (like Klarna). This reset gives public investors a more realistic entry point.

This wave is not only about consumer finance. In contrast to 2020–2021, when neobanks and insurtechs crowded the market, neo-insurance companies are almost absent (with the exception of niche listings such as property insurer Slide Insurance Holdings Inc and risk exchange Accelerant Holdings). Investors have learned to price these firms more like traditional insurers than technology disruptors, limiting IPO appeal until profitability is within reach.

Instead, the spotlight is now on embedded finance, B2B models, and fintech and crypto infrastructure. Crypto-related platforms have emerged as clear winners, supported by a friendlier U.S. regulatory climate giving them the confidence to step into public markets.

Implications for the fintech industry

Fintech is no longer an early-stage story. These are companies worth billions of dollars, with global user bases and competitive pressure forcing incumbents to modernize. Traditional banks and insurers continue to lose share in key segments, while fintechs prove they can operate at scale.

At the same time, fintech firms themselves are much more focused on durable business models. The private market “free money” era has ended for fintech, pushing firms to concentrate on profitability and core strengths. Klarna is again a case in point: before its IPO, it accelerated the adoption of artificial intelligence across the company, cutting non-essential costs and automating functions (e.g., customer service). This ability to deploy cutting-edge technologies quickly is what allows fintechs to remain disruptive, and will likely feature in future business school case studies.

Our Takeaway

Despite the recent wave of fintech IPOs, the current situation is very different from the 2020–2021 exuberance. Today’s issuers are generally more mature, with stronger business models and clearer paths to profitability. The macroeconomic backdrop is also different, shaped by higher rates. This wave nonetheless signals that fintech as a whole remains highly attractive. Unlike the payments sector, where a burst of IPOs in the late 2010s was followed by consolidation and slower revenue growth, we do not yet see a broad consolidation phase across fintech. Growth opportunities remain abundant, both among the technology enablers and the customer-facing disruptors.

We welcome this expansion of our investable universe, but history has shown that the best entry points often come after the initial euphoria fades. That is why we remain disciplined. Our experience with Coinbase and Robinhood is instructive. Both became key contributors to our strategy, although we added them well past their IPO dates.

In short, we see fintech IPOs as a positive structural trend, expanding our opportunity set. Attractive long-term stories will remain attractive. Once valuations stabilize and fundamentals, rather than sentiment, drive performance, we will be ready to add exposure to these newly listed names.