I have added some companies to the Fintech IPO WatchList that have been public for a while, so that it becomes possible to create some categories for comparables. I have omitted Traditional Fintech (although Fiserv arguably falls in that category) and omitted old banks wth a digital skin (although Virgin Money arguably falls in that category)
- Lending Club: public
- OnDeck: S-1
- Yodlee – public
- Virgin Money: public
- SoFi – announced intent
- Monetise – public
- Fiserv – public
- First Data – public
That is just enough for some categorization:
- Lending Disintermediation = 3 (Lending Club, OnDeck, SoFi).
- White Label = 4 (Yodlee, Monetise, Fiserv, First Data)
- Full Stack Bank = 1 (Virgin Money)
Lending Disintermediation” (aka Specialty Credit) is crossing the chasm thanks to the Lending Club IPO.
There are till no IPOs in the Bitcoin space (in this post I speculate on who might be first).
In the existing public companies in the White Label category, each has a clear positioning:
FirstData: the paymemts stack guys
Fiserv: the power behind the small banks
Monetise: the power behind mobile money
Of course we can also add Mastercard, Amex and Visa to this list. The stock play when we get a Bitcoin IPO will be fun – buy one, short the other.
A rising IPO tide will lift a lot of boats. This will drive M&A in the sector and that will encourage early stage funding. The existing comparables may get a valuation multiple upgrade and that could be the easy bet.
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What about CAN Capital and Kabbage? CAN is larger than OnDeck but has started out coming from a pen and paper background. They are digitizing their offering and if it works, they may be able to maintain their leadership in the space.
Thanks, Salim, just covered Kabbage. Will take a look at CAN Capital (heard about them from a small business friend).
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