Intuit Ventures reposted this
Sometimes, a set of panelists just “clickâ€. So you can imagine my excitement that we made the magic happen this year at Money2020 by bringing together Leonard Speiser, Prajit Nanu, and Shveta Mujumdar to talk about one of my favorite topics– the exit landscape in fintech. The past few years have been challenging, to say the least. I recently heard a stat from Axios that IPOs broadly are down 70% from just a few years ago. M&A levels in fintech are largely back to pre-pandemic levels, but driven in large part by legacy acquisitions. The M&A market for VC-backed deals remains depressed – despite some of the large announcements last week. The reasons according to our panelists? A continued divergence in the bid-ask spreads between buyers and sellers, still a holdover from the inflated valuations from a few years ago. The need for an alignment of values between acquirers and founders. And, on the IPO front, continued issues with the performance of public companies (especially fintech companies) has made the bar to go public much higher, and continued private capital can delay the decision. What are founders doing? Staying focused on building great companies, and in some cases attempting to grow into their valuations. Keeping options open. In many cases building long term relationships with acquirers as founders and prospective acquirers explore that value alignment. When a company does get acquired, it pays to be open about what all sides want- that is what Leonard did with Clover, and it led to a non-standard but successful integration that took place over a number of years. It’s also important to make sure that the larger organization doesn’t “smother†the smaller one. And it will be important for founders to be aware of these things– according to Shveta there is going to be a lot more M&A activity before the IPO market opens again. Happy building, buying, and selling!