Late Stage Mature Pre IPO Unicorns -

How fintechs are responding to their falling valuations

From American Banker:

The downward stock market move was sparked by U.S. wage data on Friday.
Michael Nagle/Bloomberg

Payment companies have not been immune from the correction that has hit the stock market and privately held companies across almost all industries.

The run-up in investments, high valuations and initial public offerings that followed the increase in digital payments in the pandemic’s early stage is now correcting. That decline is being exacerbated by economic pressures such as a potential recession and geopolitical tensions.

Lingering inflation could also cause a broader reduction in spending, hurting payment revenue and placing added downward pressure on fintech investments. The economic slowdown is already impacting card incentives, adding pressure to fintechs in sectors such as buy now/pay later, where there’s already a concern over run rates, a lack of profitability for many firms and potential delinquencies among borrowers if there were to be a recession.

The recent drop in stock prices and valuations is prompting fintechs to focus more on their core competencies. This doesn’t mean an end to innovation, but companies will be more selective about how they allocate resources.

July 21

Here’s a look at some of the publicly listed and privately held payment companies, how their valuations have changed during the market volatility downturn, and their recent  moves to deploy new payment technology. Unless otherwise noted, these firms did not offer comment.

Stripe headquarters in San Francisco on Dec. 3, 2020.


Stripe, which allows small businesses to accept digital payments, has added other financial services over the years as it competes with digitally focused merchant acquirers such as Block and PayPal.

One of the world’s most valuable privately held fintechs, Stripe in July lowered its valuation to $74 billion from $95 billion. Stripe’s high valuation has always been noteworthy, so its reduction sent waves through the technology industry.

Stripe was one of the first payment-related fintechs to shoot past a $20 billion valuation, giving it a major influence in building partnerships to expand into areas such as security and open banking in competition with Plaid, a company Stripe has also partnered with. Stripe is still adding new products, such as a payment rail for creators.

Klarna app
Hollie Adams/Bloomberg


The Swedish payments firm Klarna has become one of the best known buy now/pay later fintechs over the past two years, marked by its expansion into the U.S. and fast growth during the early days of the pandemic, followed by a series of partnerships and acquisitions as it added markets and products.

But the overall economic decline has hit Klarna, which recently raised $800 million at a valuation of about $6.5 billion. That’s far less than its $45.6 billion valuation in the summer of 2021.

Klarna also fired about 10% of its staff, and faced criticism for publishing the names of the fired employees on social media. Klarna has remained active in product development, rolling out a plastic Visa debit card in June and launching a marketing campaign at Macerich-operated shopping malls.

Affirm website
Gabby Jones/Bloomberg


Affirm’s stock price fell from a high of $161 per share in November 2021 to as low as $18 per share in May 2022, and has since rebounded to about $25. Like Klarna, Affirm is well known as a BNPL lender, and also offers other payment services.

In addition to economic pressure, regulators such as the Consumer Financial Protection Bureau are examining BNPL fintechs over concerns that this type of lending product could cause consumers to accumulate debt. The BNPL market accounts for about 3% of the U.S. e-commerce market, according to Forbes, which adds much of that debt across the BNPL market is not securitized.

Affirm has expanded its reach through a partnership with Amazon, which offers Affirm’s BNPL lending as an option alongside other payment methods such as cards and mobile wallets. Affirm also recently added point of sale technology from Fiserv to broaden the functions it can offer merchants.

Another new product, a debit card, is geared toward everyday purchases, as opposed to the large-ticket items BNPL lending traditionally finances, as more consumers use BNPL for grocery shopping and smaller payments. In an email, Affirm’s public relations office referenced comments from Affirm founder and CEO Max Levchin during the company’s most recent earnings call in May.

“One of the many attractive properties of operating a network at scale is that it can be very cost-effective to deliver new products and services to a large, active audience. Not all of our new offerings will result in our next billion-dollar revenue line — but we are committed to finding the ones that do,” Levchin said.



Block, which rebranded from Square in 2021 as a way to evoke its expansion beyond its traditional payments hardware for small businesses, has seen its stock price fall from $266 per share in August 2021 to as low as $58 per share in June, and is most recently trading at about $66 per share.

One of Block’s big moves over the past year was to acquire Afterpay, an Australian BNPL firm that helped Block scale its point-of-sale credit offering to match PayPal, one of Block’s chief rivals. Block has also used its Cash App to support financial products for both merchants and consumers, including buying, selling and holding cryptocurrency.

Bitcoin is a major source of revenue for Block, which during 2021 reported Bitcoin-related business accounted for 70% of its revenue. Both BNPL and cryptocurrency valuations have come under pressure in the past year. Bitcoin’s valuation has fallen from a high of about $68,000 in November 2021 to a low of about $19,000 in June, and has since recovered to about $22,000.

paypal sign
David Paul Morris/Bloomberg


PayPal was one of the early indirect beneficiaries of the pandemic’s economic response, when consumers who were skittish about in-person transactions migrated quickly to PayPal and Venmo, creating a higher-than-normal rate of account growth.

That account growth cooled from a quarterly rate of 21 million net new accounts in the second quarter of 2020 to 10 million by the end of 2021. PayPal also found about 4.5 million of those new accounts were illegitimate. As inflation spiked, PayPal in early 2022 lowered its earnings guidance, resulting in a 24% drop in its stock price in a single day in February.

PayPal more recently has been trading at $77 per share, down from a high of about $308 in July 2021. PayPal has continued its strategy of building a financial super app, including services such as a point of sale credit product that extends terms for larger purchases.

In an email, PayPal’s public relations office referenced comments CEO Dan Schulman made during PayPal’s first-quarter earnings report.  “While we are focused on incorporating more discipline into our operating model and driving operating leverage in our business, we are simultaneously investing to grow,” Schulman said, mentioning new checkout technology in particular. “We see opportunities to accelerate our growth and customer engagement.”

Coinbase front desk
Michael Short/Bloomberg


The cryptocurrency firm Coinbase debuted on Nasdaq on April 14, 2021, closing its first day at $310 per share. It’s now trading at about $67.

Coinbase’s public listing was part of a broader strategy to pair digital assets with other payment products to compete in the super-app race from the other direction — as PayPal and Block add crypto support, Coinbase is adding payment products for traditional currency.

Coinbase’s card is available in more than two dozen countries, and the company has an e-money license in the U.K. The fintechs Skrill and Paysafe partner with Coinbase to allow consumers in the U.S. to buy and sell multiple digital currencies.

In an email, Coinbase’s public relations team referred questions to a series of social media posts that included an internal announcement in June that Coinbase was firing 18% of its staff, who would be notified if they were losing or not losing their jobs via email. Other social media messages stressed the company is focusing on highest impact projects that could drive the adoption of cryptocurrency, and that Coinbase would lean on differentiated functions like compliance and security.



Brex’s challenges during the downturn are less about valuation and VC investments than its business model. The fintech, which offers a payment card for businesses, in June stopped services for a portion of its client base, mostly smaller businesses.

The company plans to focus primarily on larger venture-backed clients, according to CNBC. Brex, which had earlier applied for and withdrew an application for an industrial bank license, told CNBC that plunging valuations for public companies were hurting companies that had not yet gone public, leading Brex’s clients to seek products to help them control expenses.

In its social media posts on its strategy shift, Brex also said that by spreading itself too thin among larger and smaller companies that had different needs, the firm was creating a situation in which it was challenged to serve both categories well.

Marqeta building
David Paul Morris/Bloomberg


Marqeta resides behind the scenes of many of the mobile commerce industry’s largest brands, powering payment acceptance for firms such as Uber and Doordash. As the market has cooled, Marqeta’s stock price declined from a high of $32 per share in November 2021 to $7 per share in May 2022. It has since recovered to about $9 per share.

Marqeta’s public listing in April 2021 was part of the firm’s strategy to expand its ability to process physical and virtual prepaid, debit and credit cards. It’s part of the super-app trend, as its technology supports application programming interface connections that accommodate embedded finance and open banking.

These innovations allow Marqeta to connect customers to financial services from banks and other fintechs through data sharing. Marqeta has also kept a busy deployment schedule, partnering with Western Union in June to integrate its card-issuing technology with Western Union’s digital wallet in Europe, allowing Western Union’s remittance service to be offered online with funds distributed to a physical or virtual Visa card.

SOPA Images/Getty via Bloomberg News


Payoneer’s stock price reached a high of about $9 per share in September 2021 and again in April 2022, before falling to just under $4 per share in May 2022.

The company’s stock has since recovered to more than $5 per share. Payoneer has in the past couple of years expanded its product line, partnering with Mastercard to offer a digital card that allows Payoneer’s business clients to invest in advertising and make payments across Mastercard’s network.

The company is looking to play a role in automating B2B payments, a transaction category that remains largely manual despite the digitization of the broader payments market over the past few years.

Wise (TransferWise) app
Chris Ratcliffe/Bloomberg


Formerly called TransferWise, the remittance company rebranded shortly before its public listing in 2021. Wise’s stock price neared $15 per share in September 2021 before falling to around $3.55 per share in June, and it’s currently trading at around $4.50 per share.

Wise has recently collaborated with Google Pay to expand Google’s ability to support international mobile transfers, with initial corridors including the U.S.-to-India and U.S.-to-Singapore.The payment company has also added to its financial institution network through several partnerships, including Andrews Federal Credit Union in Suitland, Maryland, Stanford Federal Credit Union and neobanks such as N26, Monzo and Novo.

“We don’t view new product development in the context of valuation,” said a statement from Wise’s public relations office, adding the company was founded in 2010 and has been profitable for five years and maintains a regularly updated mission road map. “We continue to invest heavily in products and infrastructure, and are taking the lead in driving down the cost of cross-border transfers while at the same time maintaining a profitable business model.” 

Nikolay Storonsky, Revolut
Luke MacGregor/Bloomberg


The London-based fintech Revolut has reportedly ruled out going public in 2022 during the current churn in the markets.

Revolut’s valuation is about $33 billion, following an investment round in 2021. CEO Nikolay Storonsky early told Bloomberg in July that the company had enough funding for two years and it is not seeking additional funding.

Revolut has been aggressively expanding its global reach, a strategy that has included the recent launch of the Revolut Reader, the company’s first point-of-sale hardware.

The reader supports chip-and-PIN cards, contactless cards and mobile wallets, giving Revolut a way to compete with Block and PayPal as it pursues a broader strategy in financial services. A Revolt spokesperson said the company is still hiring and expanding, and following its summer 2021 raise it is well funded.