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.
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.
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Thanks, Salim, just covered Kabbage. Will take a look at CAN Capital (heard about them from a small business friend).
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