Fintech Macro Part 2. Neobank consolidation phase will create a few huge winners 

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.

Part 1

Part 2

Part 3

Part 4

Some subjects are too complex for our short attention spans, so we do 4 posts one week apart, each one short enough not to lose your attention but in aggregate doing justice to the complexity of the subject. Stay tuned by subscribing.

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