This article is posted in Forbes and discusses the advent of B2B fintech. The piece is written by a VC veteran and provides a brief history of various categories of B2B fintech and valuations over time, so it’s an interesting perspective. Mercator Advisory Group recently released a member paper on fintech in corporate banking, and we pretty much agree with the general conclusions presented in the Forbes piece.
‘While the spotlight has long centered on consumer fintech, 2020 will mark the year that B2B fintech finally steals the show. Not only b/c of the recent exits we’ve seen (Plaid’s $5.3B sale to Visa, SoFi’s $1.2B acquisition of Galileo and nCino’s recent IPO) but also because of the ever expanding purview of B2B fintech. This begs the natural question: what is B2B fintech?’
The author goes on to describe a version of fintech 1.0 (core and payments), 2.0 (e-commerce, enterprise SaaS, and adjacent services) and the presence of 3.0, which will expand this decade. The article includes some interesting numbers and charts related to market valuations, which have been generally excellent (not lending, however).
‘Fintech 3.0’s prospects are particularly exciting given just how well earlier generations of B2B fintech (1.0/2.0) have performed on the public markets. With the notable exception of the lending category, every other category has posted at minimum triple digit growth post-IPO. In fact, the aggregate market cap of this basket of B2B fintechs has increased 1,661% post-IPO and is now worth half a trillion dollars.’
The article is worth a look, especially with its charts and categories, for those interested in the space as we head into the rapidly evolving 2020s.
Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group
