Currensea chief predicts fintech will see a ‘flight to quality’ in 2023
Currensea chief executive James Lynn has said he expects to see a “flight to quality” by fintech users and investors over the course of 2023.
The co-founder of the travel debit card said the challenging economic climate is likely to make people more risk adverse and therefore pickier about where they put their money.
“We’ve seen all sorts of challenges this year including the crash of crypto and we’ve seen big, venture capital invested firms in that space collapse like FTX”, he said. “Unfortunately, we’ve seen what happens when people are too trusting and follow the crowds.”
He cited Bitcoin as an example of where people saw the price of shoot up and jumped on the bandwagon, only for it all to come crashing down again.
“So I think people will be more risk averse and the “flight to quality” shift will occur. People will be looking carefully at what they invest in, what they use and what’s in their portfolio, and if there are really sound, good products and good businesses out there, then they will fly”, he said.
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Lynn’s comments were made as part of equity crowdfunding platform Seedrs’ 2022 Sector Report.
The platform attracted more than 141,000 individual investments last year, helping 324 campaigns raise more than half a billion pounds, with 96 campaigns raising more than £1m.
Seedrs helped businesses from 15 different countries raise capital and received investment from more than 71 different countries. Highlights included CityFALCON which raised £1.6m, 800 per cent above its target and insurtech firm Cuvva which closed £4m from more than 3,000 investors.
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FinTech remained one of the biggest sectors of interest for investors on the Seedrs platform in 2022.
Its recent investor survey identified that fintech continued to rank in their top five sectors.
For 2022, equity crowdfunding into fintech remained stable.
For example, neobroker BUX raised more than €16m in October, 106 per cent over target and Revolut remains one of the top traded shares on Seedrs’ Secondary Market.
This contrasts with the broader investment landscape, where there has been a reduction in valuation for big fintech names and a more apprehensive investment environment.
Elsewhere, in November 2022 Seedrs saw eight fintech campaigns go live, the highest number of the year.
Among those raising in November, and closing in December, were gold investment platform Glint, Estonian community neobank Fagura, and Balkans credit-led digital bank Zvilo.
Personal investment and savings fintech Plum raised £1.8m as part of its £5m debt round announced earlier in November.
Read more: UK fintech investment ranks second globally
