Valuations of fintech companies have become "frothy", detached from the underlying business performance, according to Andy Stewart, co-founder at fintech-focused investment company Motive Partners. The value of a bitcoin is now more than double what it was in December 2016, and its price has risen by over 1,000 per cent since then. Rather than funding start-ups with a big block of capital, he suggests venture capital firms could be more creative with their investment by layering capital over time, adding that opportunities for investors can be found in start-ups' later transformation stages, or in buyout transactions.
Valuations of fintech companies have become "frothy", detached from the underlying business performance, according to Andy Stewart, co-founder at fintech-focused investment company Motive Partners. He attributes the frothy valuations to the success of previous fintech firms and the amount of capital that's invested in the sector. Rather than funding start-ups with a big block of capital, he suggests venture capital firms could be more creative with their investment by layering capital over time, adding that opportunities for investors can be found in start-ups' later transformation stages, or in buyout transactions.