During the Cambrian explosion phase, lots of Neobanks were funded. It was a period of high excitement, full of hopes and dreams.
Cambrian explosion is usually followed by consolidation when:
- A. Lots of startups fail. For investors with a portfolio, this is difficult. For entrepreneurs, this is traumatic.
- B. A few startups make it to the winner’s podium. This is when a few investors and entrepreneurs become very wealthy.
- C. Lots of startups sell out for prices that are not close to hopes and dreams, but also not traumatic.
Revolut (disclosure I am a user but not a shareholder) looks like one possible Neobank winner.
An undervalued Neobank in the Fintech 50 Index of publicly traded Fintech stocks is Green Dot. (Symbol = GDOT. Disclosure, I own some shares).
A dark horse Neobank is Silvergate which has a crypto focus.
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