Run the Numbers Stripe, Klarna, & the Fintech Resurgence—What’s Driving Valuations?
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Feb 22, 2025 Fintech is staging a major comeback, with Stripe's leap to an $85 billion valuation dominating discussions. The contrasting futures of Klarna and Chime are explored, debating who will emerge with the better IPO. Affirm's resurgence offers hope for the buy now, pay later model's longevity. Meanwhile, a significant trend of finance and HR integration is underway, highlighted by HiBob's acquisition of Mosaic. This convergence suggests a transformative shift in back-office software, creating a new unified source of truth.
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Stripe's Valuation
- Stripe's $85B valuation implies a 20x forward revenue multiple.
- This is because of their strong moat, high-margin business, and dominant position.
Fintech Revenue Valuation
- Not all fintech revenue is created equal; payment flow revenue gets higher multiples than interest on deposits.
- Investors discount interest-based revenue due to its dependence on macro factors.
Chime vs. Klarna
- Chime's neobank model relies on interchange fees and some lending, targeting a 5x forward revenue multiple.
- Klarna's buy now, pay later model relies on merchant fees and consumer lending, aiming for $15-$20B valuation.