So what is driving this increased talk around fintech M&A?
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Inflation and higher interest rates mean VCs may be distributing their funds with a little more caution than before.
It makes sense to look at being acquired, Benton said.
Its harder to raise money at a later stage because of the current macroeconomic situation.
In many cases, there are too many companies vying for dominance in one particular space.
The startup builds payments and expenses platforms for companies and their employees.
All of these things can make a company more attractive to a buyer too, Lennon explained.
There are very well capitalised financial institutions that are looking for opportunities in M&A.
Thats not just banks, its even some of the larger fintechs, he said.
When companies get bigger, they move slower.
M&A rather than organic becomes the route that they choose.
Theres definitely people knocking on doors.
The fintechs out there have to show the path to profitability and better economics.
They have to show better revenues per user and thats where consolidation naturally would be happening.
Some of them would be acquiring the others.
That can mean less easy money but a healthier market domain now, according to Craddock.
Shikhantsova believes that the era of a one-size-fits-all approach to fintech is over.
She anticipates that fintech companies will now target more specific domains and verticals.
Many more absolutely huge and fundamental industries can get fintech applications.
New consumer-facing fintech companies will face a challenging time, she added.
