08 May Value Focus FinTech Industry
FinTech outperformed broader markets in the first quarter of 2015 as:
- Broader markets were relatively flat while investor interest in FinTech remained relatively high and FinTech was generally viewed as a potentially higher growth segment
- 18 FinTech IPOs occured in 2014 and 1Q15 and the median return for this group was 12.0% since IPO
- Innovation Holdings (INOV), a provider of cloud-based data analytics to the healthcare sector was the lone FinTech IPO in 1Q15
Market performance of FinTech companies continues to gyrate as investors weigh:
- Threats of new entrants, including other technology companies and traditional financial institutions
- Continued technological change
- Emerging risks including regulatory and business model
2014 & 1Q15 FinTech IPOs
- While the Lending Club and OnDeck IPOs in 4Q14 brought significant attention to FinTech and P2P lending, there were seven IPOs among insurance/healthcare/financial technology companies
- While none of the IPO companies reported positive net income in the trailing twelve month period, the stock price performance since IPO was positive for the majority of recent FinTech IPOs with a median return on 12%
- Eight FinTech IPOs had a market cap greater than $1 billion at March 31, 2015
- Total gross proceeds from recent IPOs totalled $4.9 BN
- The greatest proceeds raised at IPO were for IMS Health Holdings (IMS) and Lending Club (LC), with both raising over $1 billion
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