Fintech valuations (and IPOs)

Taking inspiration from this post…

… I was wondering what are our thoughts on fintech valuations? Who’s overvalued (everyone?) and who’s undervalued (no one?).

I’m also fascinated about who’ll go first for an IPO and what that’ll mean for the rest of the pack. Will the bubble burst or will they go to the moon?


Anyone who isn’t operating successfully on a global scale, or has the branding/partnerships necessary to penetrate markets on a global scale. So for me, that’s anyone who isn’t Revolut, N26 or Klarna.

N26 less so having scaled back their efforts, despite it feeling largely like it’s just poor timing. But the reputation hit from that would be hard to come back from.

Not sure, but for me, I’m more interested in where they IPO. Arm made headlines recently by picking New York over London. To me it makes sense being a tech company. But it does raise some questions over what the fintechs wind up doing.

But it’s more a preface to just say don’t be surprised to see Monzo shy away from their British roots when they IPO, not dissimilar from a post Brexit Dyson. They’re Ycombinator backed after all. America first and all that.

I largely think it’ll come down to what’s first for them. Fin, or tech. We’re not a friendly place for tech, which makes NYSE much more appealing, even for British companies that are being championed by levelling up addicted government.

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N26 - Frankfurt (or Paris)
Monzo - New York
Starling - London
Revolut - New York with a subsidiary listing in Frankfurt (or even Shanghai)


That’s about my line of thinking too. I’ve got Klarna pegged for New York too.

If it’s still on the cards for Freetrade (not sure what’s happening there post-news of looking for a buyer) I could see them going with London.

Starling will be New York, majority backer is American and it’s easier for him to cash out there.

Anyone SoftBank funded is over valued, Klarna and Revolut are the obvious ones


I think they’re sadly a busted flush right now. They’ll have limited runway, would seem to have difficulties in interested in raising (didn’t they pull a crowdfunding round?). And typically the longer it takes to sell after they announce their intention the worse things look…

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I actually think N26 has a good chance of imploding soon given the exodus of senior level executives. They barely have anyone left with the qualifications and experience to run a bank, so I think they’re on a knife edge.


Picking up the remains of N26 could be good business for Monzo. :eyes:


The banking license in the EU? Yep, the rest, I don’t


Looks like an attractive takeover target then. Apple perhaps? They already have a close working partnership, and Apple’s buying more into fintech lately. It would certainly help them expand their products into Europe.

Depends on the valuation but you’d be buying the licence and the customer base.

Keep N26 platform running for 24 months while you build out Monzo Deutschland and other localised versions on top of the core platform, during which you’d migrate over your 7m new customers.

If you could pick them all up, plus a banking licence, for a euro a customer that’s an absolute steal. €100+ not so much.

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Is Apple looking to become a bank, though?

After a bit of froth about big tech buying banks a few years ago, it seems to have calmed down with the consensus being they don’t want to be in the regulated consumer industry.

It is ripe for international consolidation though. I did think that Stripe might the big player in that, though.

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I’m always a bit dubious where two stacks and systems run, and then the acquired one never quiet goes away, running two platforms for years, tech debt etc etc

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Me too, to be honest. But I think if anyone can pull it off, Monzo can.

As I say, it would have to be at a price they couldn’t resist though.

(I think Starling would also be pretty good at it, but they seem to have decided that they’re BaaS outside the UK, so I’ve discounted them).

No idea, but they’re trying to expand their fintech portfolio, both in terms of products and markets.

They have the tech, and they can do the tech pretty easily. The hard stuff is the regulatory stuff, which is where it makes more sense to buy your way into it.

As I understand it, they want to uncouple themselves from Goldman Sachs. And they want to take Apple Card global. Being their own bank might make that easier, even if they don’t necessarily want to be a bank per se (same logic behind Monzo becoming a bank IIRC). Though on that side of things, I’ve heard rumblings of them wanting to get into savings and investments. I don’t think a bank is entirely off the cards, but they’re certainly dancing around the prospect.

This is probably worth reading:

The one thing about Apple, is they play the long game.

And this is the latest piece from Mark Gurman.

Monzo will IPO in 2024 in the NYSE with a valuation of £10 billion
I would value Revolut at approximately £10 billion at this moment

I agree Revolut is overvalued. But I think Monzo is very undervalued in your example. Another two years of growth, cement position in the UK, and if anywhere near as successful in the US I imagine $30-40bn. It looks like a lot of progress has been made building the US product, at some point they’ll actively start trying to scale and market that - it feels like they’re just quietly building at the moment, but that could be wrong.

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While premature, this could still happen:

Monzo is clearly (re-)dangling the carrot in the US at the moment, and rumours around Apple Banking are growing. If you wanted a good foothold into tech-based, neo, no-branch, digital, app banking in the US, it’d be powered by (my opinion) - Monzo, Revolut, Starling - or - a new startup (potentially Apple itself)

And don’t underestimate any of these 3 existing digital banks. They’re already proven to work.


It’s difficult to tell with Monzo at the moment because the U.K. is the only market they’ve proven themselves in. That’s a serious potential limit they need to break free of. I completely agree that if they took off in America it would be a very different story. It’s a big if though.

Revolut is established in multiple markets. So on that alone I think it’s going to be more valuable.

Still, just because something goes onto the stock market doesn’t mean it can’t still be ‘overvalued’. Hype has a lot to do with it too and Monzo is a brand with a lot of hype.

As for stock exchanges. Monzo will have to be LSE unless things radically change, anywhere else it’s an obscure British brand no one has really heard of, not the ideal listing conditions.

OMG would i love for you to be right,I managed to invest £2000 in 2018 :grinning:

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