'The mood is very grim': Once-hot fintech sector faces IPO delays and consolidation

cnbc.com:

AMSTERDAM — Financial technology companies are putting IPO plans on hold and cutting expenses as fears of an impending recession cause a shift in how investors view the market.

At the Money 20/20 conference in Amsterdam, bosses of major fintech players sounded the alarm about the impact of a deteriorating macroeconomic climate on fundraising and valuations.

John Collison, co-founder and president of Stripe, said he was unsure if the company could justify its $95 billion valuation given the current economic environment.

«The honest answer is, I don't know,» Collison said on stage Tuesday. Stripe raised venture capital funding last year and is not currently looking to raise again, he added.

It comes as buy now, pay later firm Klarna is reportedly looking to raise fresh funds at a 30% discount to its $46 billion valuation, while rival group Affirm has lost roughly two thirds of its stock market value since the start of 2022.

Zopa, a digital bank based in Britain, had hoped to go public by the end of 2022. But this is looking less likely as inflation shocks exacerbated by the war in Ukraine have led to a slump in both public and private markets.

«The markets have to be there» for Zopa to go public, CEO Jaidev Jardana told CNBC. «The markets are not there — not for fin, not for tech.»

«We will just have to wait for when the markets are in the right place,» he added. «You only want to do an IPO once, so we want to make sure that we pick the right moment.»

The tech sector has borne the brunt of a market sell-off since the start of the year, as investors digested the likelihood of a steep rate hiking cycle — which makes growth stocks' future earnings less attractive.

Several executives and investors said rising inflation and