Private equity is set to play a bigger role in fintech, writes Professor Florin Vasvari, Academic Director at the Institute of Entrepreneurship and Private Capital at the London Business School.
For a while fintechs looked invincible: overcoming all hurdles and attracting mega rounds of funding. However, the news that Klarna’s value has been slashed from $46bn to $6.5bn in its forthcoming fundraise, shows that even the biggest stars of the private markets are going to feel pain.
So far, down rounds have been few and far between: in the first quarter of 2022 only 5 per cent of completed rounds have come in at a lower valuation than when companies last raised capital. However, the news that Klarna, which became Europe’s most valued startup last March, is about to raise fresh capital at a valuation of about $6.5bn, having been valued at $46bn last year, shows that even the biggest stars of the private markets are going to feel pain.
Read more: AltFi
