Eric Demuth, the CEO of Austrian crypto unicorn Bitpanda, says that European fintechs are clinging on to price tags of many times what they’re actually worth — including his own.
“If any [fintech] company that raised in 2021 were to raise next week, the market standard right now is a 50% to 70% devaluation,” Demuth says.
So what about Demuth’s crypto trading platform, which was last valued at $4.1bn in August 2021? Demuth estimates that, based on current revenues, his company is likely worth in the “ballpark” of $2.5bn-3bn, but he is “quite confident” that he could hold on to that Series C valuation if the company were to raise again.
“When you do a round people invest in potential,” he says, citing the B2B offering that Bitpanda launched in January as something that investors would see as potential.
Bitpanda’s B2B product provides the plumbing to fintechs and traditional banks so they can offer investment services, including stocks, crypto and ETFs. Demuth says it’s gaining “traction”, and currently counts N26, Lydia and Plum among its biggest clients.
European fintech’s later-stage companies are doing all they can to avoid raising in 2023 when capital is scarce and valuations have taken a beating. They’ve seen what happens when companies do raise in this environment: Klarna suffered an 85% valuation haircut when it raised $800m last year, and SumUp lost 60% of its value when it raised €590m in June of last year.
Meanwhile, Revolut’s investors are beginning to question the fintech’s $33bn price tag, and Checkout.com has slashed its internal valuation to $11bn, which is much lower than the $40bn it was assigned by investors last January.
Demuth’s comments come almost a year after Bitpanda announced it was laying off a third of its staff, as its three cofounders admitted they’d made a mistake in hiring at an unsustainable speed.
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Bitpanda’s cofounders now tell Sifted the company is hiring again, in new strategic areas for the business.