Here's one from FT Alphaville's Jemima Kelly that stood out enough that we headlined it:
Dec. 3, 2019
This Might Be Important: "Is the fintech bubble bursting?"
I haven't paid as much attention to fintech as maybe I should have.
For our purposes it started dropping off the radar a couple years ago when it seemed every little wannabe entrepreneur had dispensed with making the case for what they were doing and how their product/idea/dream would help the end user and those said wannabe entrepreneurs would cut directly to the chase:
"Just give us some money"We'll get to a couple of the headline takeaways but first here's the FT's Jemima Kelly to give us the lay of the land:
This year, it has felt like hardly a week has passed without some fintech declaring nonchalantly that it’s raised another few hundred million pounds.
On Monday, it was the turn of a little-known (to us anyway) start-up called Hastee, which gives employees access to their pay as they earn it. It announced that it had raised £208m in its latest funding round.
Challenger bank Revolut, meanwhile, is in the process of trying to raise $500m in equity and $1bn via a convertible loan from investors, in a fundraise that could value the company at as much as $10bn. This comes despite the fact that, like many fintechs, the company has never been profitable (apart from a brief period in early 2018 during peak crypto-mania, when Revolut launched crypto trading).
And we’ve lost track of the number of variations there are on the “[Insert City] Fintech Week” theme, but there seem to be very many indeed.
So we must be in the midst of peak fintech-mania, right?
Actually, possibly not. Take a look at this chart, from Ian Green, principal consultant for data and technology at The Disruption House, a firm that provides benchmarking and data analytics to the financial sector:
The chart shows that after a huge increase in the number of fintech start-ups founded between 2004 and 2015, there has since been a rapid decline: from 390 in 2015 to just 71 in 2018.......MUCH MORE
The fact the bubble was in the number of start-ups rather than price-in-the-public-markets means we may have extended the length of the overall bull market.Well, it didn't completely cut the "top off of extinction event cliff-edge waveforms"now did it. My bad.
Just as all the trade talk sturm und drang dramatically slowed the rate of ascent of the wider market over the last couple years:
in effect cutting the top off of extinction event cliff-edge waveforms:
A sawtooth wave represented by a successively larger sum of trigonometric terms and smoothing via Brilliant.org
and smoothing/extending the ride.
In hot new areas what you don't want to see is stuff like this:
March 10, 2010
Happy Anniversary Mr. Market: Ten Years Ago Today...
...Internet.com put out this press release:....
I may have been optimistic but the thing that really stood out and the reason I went back to check my memory was the amazing resemblance of that very same cliff edge in both the chart in Jemima's piece and the subsequent chart of the Dow Industrials.
However, and this is the takeaway, after the S&P 500 crossed through the 3300 figure that we had been touting for a few years—first achieved January 16, 2020, we pulled way back on the equity stuff—both in real life and here on the blog, and I'm thinking the fact that a leading group like fintechs had fallen out of favor was part of the background picture, subconscious or as some might say, unconscious, but there nonetheless, because a journo decided to hit "Publish" back in December.
