Payments Backend Leads Fintech Exit Activity

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Last quarter we reviewed fintech exit trends and found robust growth. This quarter we went one level deeper on our fintech research platform and conclude that the Payments Backend category leads fintech exit activity. Companies in this category include technologies impacting payment issuers and acquirers, as well as the infrastructure enabling payments.

This conclusion was derived from three takeaways:

  •      Payments Backend leads fintech in the number of exits
  •      Payments Backend leads fintech in the acquisition amount
  •      Payments Backend also leads fintech in the exit ratio

We’ll illustrate these takeaways with some graphics that show fintech exit activity by category.

To help set the stage, the graphic below shows fintech exit activity over time. As you can see, the sector is experiencing strong growth in exits.

FinTech Exits by Quarter Stacked

Payments Backend Leads Fintech in the Number of Exits

We’ll start off by examining the exit events in each fintech category. Exit events include both acquisitions and IPOs. The below graph highlights the number of fintech exit events by category.

FinTech Exit Count by Category

This graph shows that Payments Backend leads the sector with 55 exit events. Consumer Payments and Personal Finance come next, with 44 and 43 exit events.

Let’s now see how fintech categories compare with one another by acquisition amount.

Payments Backend Leads Fintech in the Acquisition Amount

The graph below shows the acquisition amounts in different fintech categories.

FinTech Acquisition Amount by Category

We can see from this graph that Payments Backend leads all the other fintech categories by far. The total acquisition amount in this category approximates $25 billion. It’s noteworthy that Payments Backend’s acquisition amount is more than twice the next category, Consumer Payments.

Payments Backend has seen some large acquisitions in recent years. Nets was acquired by Hellman & Friedman in September 2017 for around $5B. Bambora was acquired by the Ingenico Group in July 2017 for around $2 billion. Worldpay was acquired by Vantiv in July 2017 for slightly under $10 billion.

The acquisition amount in Payments Backend represents 31% of that across all fintech categories.

We’ve now seen the leaders in fintech exit activity by event count and acquisition amount. What about the ratio of exit events to the total number of companies in the category? Let’s look at the Exit Ratio by Category graph to find out.

Payments Backend Leads Fintech in the Exit Ratio

The graph below shows the total exits divided by total companies in fintech categories.

FinTech Exit Ratio by Category

Payments Backend, Transaction Security, and Consumer Payments are the leaders in this metric. 24% of Payments Backend companies have been acquired or gone public. The same is true for 23% of Transaction Security companies and 21% of Consumer Payments companies.

Conclusion: Payments Backend Leads Fintech Exit Activity

In conclusion, we have examined fintech exit activity by exit events, acquisition amount, and exit ratio. Payments Backend is the category that leads the sector in all three metrics. Its abundance of exit activity indicates that it is one of the most mature and well-established fintech categories. 

To learn more about our complete Financial Technology report and research platform, visit us at www.venturescanner.com or contact us at [email protected].

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