The Financial Reporting Blog

With analysts and pundits trying to identify those sectors that may be overheating as the market grinds to all-time highs, one sector to keep an eye on is financial technology (“FinTech”). Against a backdrop of optimism and growing investor interest, we thought it might be useful to examine valuation multiples within the FinTech industry over time to see whether public markets are reflecting these trends as well. While key valuation drivers such as profitability, growth prospects and risks vary among each FinTech niche, our graphic illustrates that the public market is indeed telling a similar story and perhaps a FinTech bubble is emerging or at least starting to form as margins are generally down across various FinTech niches while valuation multiples have expanded.

On March 25, 2015, the SEC issued its final ruling amending Regulation A, an existing exemption from registration requirements for smaller issuers of securities. The new rules, commonly referred to as “Regulation A+,” were first proposed in December 2013 under Title IV of the Jumpstart Our Business Startups (JOBS) Act (subscription required). Regulation A+ is expected to increase access to capital markets for small companies that do not report to the SEC by exempting registration requirements for securities offerings of up to $50 million annually.