The troubling times affecting company valuations have given rise to a strong increase in mergers and acquisitions. That trend is especially apparent in the fintech space these past few months. More M&As are expected in H2 2022 as bargain hunters scoop up discounted deals across the board.
Expect Many More Fintech M&As
One’s demise is another one’s opportunity. That age-old saying applies to any financial development in any industry. Fintech companies and startups note increasing attention from rivals and other parties looking to acquire them. Hampleton Partners note a 46% increase in H1 2022 M&As over 2021 and a 70% increase compared to H1 2019.
While some may argue that 591 fintech M&As is a good thing, it also eliminates a fair bit of competition. Innovation only occurs when service providers compete to attract more customers. However, there are also many overlapping service providers, and it makes sense to merge and acquire entities that can elevate one’s business to the next level.
Hampleton Partners Founder Miro Parizek adds:
“Fintech is proving to be a very attractive target for financial and strategic dealmakers, defying the broader global M&A slowdown. The availability of capital is driving buyers and investors to increase their acquisitions at a time when their pockets are full and high-growth fintech companies are being sold at all-time affordable prices. Any potential recession won’t dampen Fintech M&A as it did in 2008.”
It will be interesting to see what happens in the coming months. The current rate of M&As may not be sustainable as no one knows what the future may hold. Moreover, there is a strong increase in mergers in crypto and blockchain, surpassing 100 deals in the past 12 months. There is still much excitement in crypto and blockchain, despite those markets getting battered too.