Fundamentals Beat Frenzy for FinTech IPOs in 2025

The FinTech initial public offering (IPO) market has roared back to life in 2025 after several quiet years.

However, it’s not the same speculative surge that defined the last cycle. Early offerings from Klarna , Figure Technology Solutions , Circle and Chime have largely been met with optimism and double-digit increases from their offering prices, while the business models themselves have been undergoing a sea change.

Before this year, “I think most people were looking at FinTechs as firms that were trying to grow as quickly as possible to try to get as large a population” of customers in place as possible, Edward Best , co-chair of the capital markets practice at Willkie Farr & Gallagher , told PYMNTS. “They were chasing numbers, and many of them were unprofitable for a number of years.”

Best said this year’s listings and the investor response reflect a fundamentally different environment.

“The overall market is certainly much more mature,” he said.

Investors are now focused on profitability and on business plans that emphasize a rational approach to their respective markets, where, as he said, “we want to see growth, but we’d like to see it be sustainable.”

Focus on Financial Case

Best said the investor lens has shifted from potential to performance. That new discipline has pushed FinTechs to rethink their strategies, away from unbounded customer acquisition toward maximizing revenue from existing users.

“Once you’ve got the customer,” he said, illustrating the thought processes in place, “‘What more can I sell? What add-ons can I give them?’”

Cross-selling depends on credibility, and the FinTechs that can build trust in the ways that have been the hallmarks of the traditional financial institutions will be best positioned to expand, Best said. That evolution parallels how incumbents like banks and brokers deepen ties with customers, an important shift for FinTechs seeking lifetime value rather than fleeting downloads.

The digital-native consumer is accelerating this structural change and the pivot toward cross-platform and cross-selling initiatives, he said.

“Nowadays, especially younger folks … live on their phones,” he said.

That ubiquity of mobile life is what creates opportunity and risk for the next phase of FinTech growth.

The model applies across categories, from payments to wealth to lending, where the customer relationship itself becomes the growth engine, Best said. A FinTech that began by offering simple transaction services can now layer in financial planning, insurance and lending products without having to reacquire that user base. He likened that strategy to traditional investment platforms that turn one-off users into lifelong customers.

Although artificial intelligence generates buzz, it’s a double-edged sword, he said.

“AI is a huge opportunity, but AI is also very scary because it can maybe break through firewalls and it can do things that none of us ever thought,” Best said. “The EU is still much more privacy-centric than the U.S.”

As for the companies that promise revolutionary innovations based on AI, he said, “You’d better be able to explain to people how you use AI, how it’s working in your business, and how [end customers] can use it.”

Reset Valuations and Sustainable Gains

Even with enthusiasm returning, valuations have been tempered. That’s a healthy sign, and that leads toward sustainable trends in stock prices and in the flow of listings themselves.

“One good deal brings another good deal,” Best said. “Two good deals bring a third and a fourth. … The market as a whole is trying to avoid big hiccups.”

Best also pointed to a new investor temperament, one less swayed by geopolitical or macro shocks, although interest rates and inflation are always in focus.

“Twenty years ago, wars going on in Ukraine or the Middle East would’ve had a much more chilling effect,” he said, adding, “It seems like macro [events] are still important to the market … but the market seems to have gotten more comfortable with volatility and risk. That’s an interesting change.”