For fintechs in 2022, the bigger the exit, the larger the decline in value

While the public market correction has been widespread, tech and fintech stocks have seen the largest declines, according to a recent report.

Specifically, the Fintech Index — which tracks the performance of emerging, publicly traded financial technology companies — was down a staggering 72% in 2022, according to F-Prime Capital’s State of Fintech 2022 report. After hitting a peak of $1.3 trillion in late 2021, the F-Prime Fintech Index slid to $397 billion by the end of 2022.

Currently, the Fintech Index comprises 55 companies across B2B SAAS, payments, banking, wealth and asset management, lending, insurance and proptech.

“The biggest shift in 2022 was that public investors for the first time got to weigh in on fintech stocks,” said David Jegen, managing partner of F-Prime Capital. “That was probably not super great timing considering the broad macroeconomic impact on tech.”

The fact that so many fintech companies even went public was a big deal in and of itself, Jegen said. “We had 10 years of exciting fintech disruption, all of it led by private investors,” he said. “So 2021 was huge because the IPO window was open when we had a really mature cohort of fintech companies.”

Indeed, 75 fintech companies went public in 2021, meaning 2022 was the first year that F-Prime could even put together a Fintech Index.

Notably, the decline was especially pronounced for the 10 largest exits during the peak years of 2020-2021. In other words, the bigger the exit, the larger the decline. The cumulative market cap decline for the top 10 recent exits totaled over $220 billion; Coinbase, NuBank, Robinhood, SoFi, Affirm and Wise all saw their valuations tumble.