Welcome to Fintech TV.
After two decades of explosive growth, and tech has officially matured from a disruptive startup sector into the architectural backbone of global finance, and new research from FT partners and Blue Dot investors formally declares the arrival of a liquidity super cycle for the first time, the top 100 private fintech companies are generating more collective revenue.
Then their public peers while simultaneously commanding a valuation that is nearly 3 times higher while this $1 trillion private cohort is no longer just a collection of startups.
They are scaled institutional enterprises that are forcing a massive realignment across IPO markets and many strategies as well as secondary trading desks.
We're joining us live at the.
Stock Exchange is Sahej Suri, founder and Managing Partner of Blue Dot Investors.
Sahej, great to have you here.
Thank you so much for having me.
Well, I do want to hear about what's happening when it comes to the fintech space, especially this discrepancy between the public and the private side.
So tell us what is actually happening.
Sure, I mean first of all, we had an amazing report with FT Partners that we just published.
The most unique and interesting insight that we had was the biggest companies on the private side on FinTech are actually bigger on the public side, and they're growing faster and they're profitable.
And so there's an entire generation of really high quality businesses on the private side, almost 450 unicorns that are incredibly incredible businesses, and we all know in 2021 FinTech was incredibly hype.
We're seeing a next wave of fintech, which is high quality businesses.
So I do want to hear about these high quality businesses.
This report that just came out is an extensive report and many, many pages long.
So break it down for us.
What are the key takeaways?
Yes, I think the biggest takeaways are that on the private side of fintech, they are really high quality businesses.
That's number 12 is the IPO window was there to an extent last year, but there's a lot more to come, I think, in the next few years.
We think M&A for FinTech is going to be a much bigger trend.
And on the secondary side, like this is going to increasingly be a very important way that investors and entrepreneurs generate liquidity from here on out.
So I do want to get your take on what we're seeing in terms of consumer growth globally.
So what is happening and where are you seeing the most demand on the consumer side of, yeah, so I mean the unique thing that we saw in the report was on the consumer side of the home, we know the household names JP Morgan of Bank of America.
But companies like Revolut or Nubank are growing at incredibly fast rates and for the first time ever have more customers than JPMorgan and Bank of America.
And so you're seeing kind of this democratization on the consumer end for FinTech and Fintech really playing a massive wave of You know providing banking services for people around the world, and when we take a look at this sector, especially around the globe, we know that there's been a lot of growth, but when it comes to institutional investors, what are some of the key metrics that you think that they should be watching?
Yeah, look, I think particularly public markets investors.
The IPO window last year, the bar was higher than it had ever been to be a fintech company.
You had to be 3 times the size than ever before to go public, right?
And I think that's a strong bar that institutional investors will hold for public fintechs going forward.
To us that was interesting.
The other word, a lot of these businesses are more profitable than they've ever been before.
They're also raising more money than ever before, so you're seeing a flight to quality in fintech in a mature way and also a lot of really high quality and responsible fintechs.
Yes, so I do want to expand on what you just mentioned when it comes to M&A, especially because you highlighted IPOs.
So depending on the industry that you're talking about, when we're actually talking about buyouts or M&A action, they can differ.
So when it comes to fintech, what is actually happening?
Yes, so historically you had banks buying fintechs.
I think.
That's no longer the trend.
FinTech to fintech M&A, those big fintechs are the biggest acquirers in the space today, and that was something that had never been done before or never seen before, and we think that's going to increasingly be a trend.
The second trend that we're seeing are buyout firms, big private equity firms starting to come into fintech and seeing fintech as a true asset class.
So we think.
Over the next 5 to 10 years, private equity will be a large acquirer in fintech companies.
And the third is the traditional financial services businesses, the big banks are actually less of an acquirer than we thought they would be.
And so we think Fintech M&A is going to be big, but it's actually going to be the big fintechs and private equity being the big acquirers in the future.
Yes, and while I have you here, Sahej, I do want to ask you about what we're seeing in terms of fintech within sectors.
So what is gaining the most traction right now and not just in 2026 but also beyond?
Where do you expect to see the most growth and why?
Yes, I think it's a couple of things.
So we're seeing a lot of capital going into crypto blockchain area, but it's pretty frothy, right?
People are paying 16. revenue multiples for these businesses versus on average you know the public markets on FinTech are 4 times revenue.
So that's a little bit of a froth that we're seeing there.
But there's a lot of capital going there, a lot of capital going into AI native businesses now.
And for us the key question is who's going to be the ultimate winner in 5 or 10 years from now?
Is it the JPMorgans of the world?
Is it the cloud or open AIs?
Is it the incumbent fintechs?
Think of the Revoluts or stripes of the world, or are these new native AI fintechs?
To us that's the most interesting question in fintech today.
Yes, and artificial intelligence, it is a technology that all of us are watching from Wall Street to Main Street, and it is also an investment theme.
But when we're talking about private markets, where is the focus when it comes to AI?
I think for us as we've been looking at Blue Dot, we're late stage investors in fintech.
We think most of the action in AI today are in existing businesses, businesses that are scaled and have large networks and distribution networks.
They have a brand, they have large customers.
To insert AI.
In our view, we're seeing incredible cost savings across our portfolio versus net new startups are going to have to build new customers themselves.
So our house view at Blue Dot is the bigger fintechs are going to be the net beneficiaries of AI over the long haul.
And finally, before I let you go, I do want to ask you about secondaries.
So where are the opportunities?
Yes, it's incredible.
I think in fintech alone, the top 10 names of fintech think of Stripe or Revolut or REM.
They have 95% of wallet share in secondaries.
At the same time there are 450 unicorns in fintech.
There's a dearth of liquidity in the space and very little sort of tools for early investors or employees to get liquidity, and that's where we've come in and stepped in, right?
We're fintech specialists.
We know the sector really well and We're just investing in really high quality companies.
For us, I think over the long haul we think secondaries are here to stay in meaningful ways.
It will continue to be a really strong driver of returns going forward and distribution of liquidity.
It's incredible how secondaries need to continue to develop over time in fintech.
And you mentioned unicorns and whenever we hear that term, we want to know where they are, what they're doing, and what the expectations are moving forward.
So can you give us a sneak peek?
Yeah, we think in the next 3 years a lot of those unicorns that are private, probably public, they don't necessarily need to go today, but we think we will see this upcoming liquidity super cycle is what we're terming it in the next 3 years or so.
And so we're going to see a lot more IPOs, definitely more M&A activity, and then there's a new reality of some companies don't need to go public ever, right?
And so some of the biggest companies, we think probably.
Private for a very long period of time ahead, but we will continue to see a healthy sort of capital markets over the next few years.
So a lot to keep our eyes on as we head into the second half of 2026 and beyond.
So thank you so much for joining us and thank you so much for all your insights.
Thanks so much for having.
