When the first wave of Fintech got rolling after the 2008 financial crisis, the idea of taking on the financial establishment was only a gleam in the eye of the wildest futurists. One Bitcoin was worth small fractions of a US dollar and reaching parity was a massive future milestone that few thought would happen.
In late August 2021, BTCUSD is in mid $40k range and according to research by UBS, Fintech industry revenues will more than triple from USD 150bn in 2018 to USD 500bn in 2030, implying an average annual growth rate about three times faster than the broader financial sector’s. This makes Fintech:
Either A = mainstream aka boring. Fintech is big enough that mainstream media and financial services firms are paying serious attention.
Or B = just getting started aka exciting. Although Fintech is big, as a % of Finance it is in single digits ie just getting started aka exciting.
Or C = both of the above.
I think the answer is C because as Clay Shirky, in Here Comes Everybody, writes:
“Communications tools don’t get socially interesting until they get technologically boring.”
Yet a quick glance at the Fintech 50 Index of publicly traded Fintech companies shows what a huge impact these boringly mature technologies are having.
Fintech is a big growth market, but what investors want to know is which Fintech companies are best positioned to grow fast and which actually are growing fast (rather than overhyped “growth stocks” with too high valuations). Finding these real growth stocks requires two way levels of analysis – qualitative and quantitative:
Qualitative analysis of how well companies in the Fintech 50 Index are positioned for change.
Quantitative analysis of actual quarter to quarter revenue growth.
In short, investors need both the theory of why a company’s growth should be strong in future and the practical results of actual recent growth.
When this growth comes at a bargain, the M&A guys will soon jump in and buy up the bargains and highly valued “growth stocks” that are not actually growing fast will attract the attention of short sellers. At least that is how capitalism is supposed to work.
Daily Fintech’s original insight is made available to you for US$143 a year (which equates to $2.75 per week). $2.75 buys you a coffee (maybe), or the cost of a week’s subscription to the global Fintech blog – caffeine for the mind that could be worth $ millions.