News Digest: Fintech valuations plunge as investors question business models
July 20, 2022
Several high-profile privately held fintech start-ups have recently suffered a massive decline in valuations amid growing concerns over the viability of their business models, against a backdrop of growing inflation, rising interest rates and economic slowdown.
Swedish fintech Klarna revealed a couple of weeks ago that it had closed a “down round” worth $800m in fresh financing, at a $6.7bn valuation – down 85% from the $45.6bn value it secured during a 2021 cash infusion.
Meanwhile, shares of PayPal, Affirm and Block, Square’s parent company, have plunged by 64%, 77% and 61%, respectively, since the start of this year, signalling rising investor concerns over high-growth tech stocks and “buy now, pay later” lenders.