Hello, Fintech Friends!

What a year for fintech IPOs! eToro. Circle. Chime. Figure. Gemini. And, finally, Klarna. The market cheered every one of them, and investors are clearly in a “more the merrier” mood. It took Klarna two decades to reach the public markets, nearly as long for eToro, and over a decade for Chime, Gemini, and Circle. Building in financial services takes time, and few companies make it to the public markets. Let's celebrate these milestones...

...but an IPO is only the beginning. Public companies live in the spotlight, with every success and setback instantly reflected in their stock price. And setbacks always come. Affirm is outrunning Klarna. Cash App isn’t letting Chime own the primary account. Tether just dropped a U.S. stablecoin to take on Circle. Meanwhile, JPMorgan continues to spend nearly $20 billion a year to keep fintechs at bay.

Let’s see if access to capital and the scrutiny of public markets make these companies stronger...because their job is far from finished.

Jevgenijs
p.s. Have feedback? Ping me on X/Twitter
Happy to hear how we can improve this column!

Best-Performing Fintech Stocks

In February, I wrote, "The best-performing fintech stocks in 2023 were Affirm, Coinbase, and MoneyLion. The best-performing stocks in 2024 were Sezzle, Dave, and Zip. Do you see a pattern here? These companies were left for dead at some point. Will 2025 be different? Could Better, Pagaya, or Oportun top this year's list?"

It wasn't a bad call 👇🏻

Performance by Segment

The trade of the year appears to be “short payment companies, long consumer lenders”. Even Visa and Mastercard are trailing both the Nasdaq Composite and the S&P 500, while most consumer lenders continue to outperform strongly. What’s behind this trend?

Does it signal that investors expect consumer spending to weaken and rely increasingly on credit?

Key Highlights

Klarna (NYSE: KLAR)

Klarna finally went public. The company first filed with the SEC in November last year, only to abruptly put its IPO on hold. After a long road, it eventually went public at $40 a share, giving it a $15 billion valuation. The stock popped on debut, but ended the week at $42.92, just above the IPO price.

The market valued Klarna closer to smaller competitors like Sezzle and Zip, rather than its main rival, Affirm. The reason is simple: Klarna has fallen behind on the most important metric, growth. Maybe the company wanted to show profitability before listing, or it was busy managing defaults in new markets. Either way, the result is clear: Klarna now has to prove it can reignite growth.

"The Klarna Card is becoming a preferred payment method across our most mature European markets, and we’re now rolling out an enhanced version in the U.S.”

Sebastian Siemiatkowski, Klarna Q2 2025 earnings release

Klarna’s push into cards could be its biggest bet. Visa’s new Flexible Credential opened fresh opportunities for BNPL players like Affirm and Klarna. As the only two U.S. issuers so far, their cards can function as debit cards or instantly offer financing at checkout, a big shift from the old pre-approval process. Klarna serves five times as many consumers and processes three times the GMV of Affirm. That makes selling the Klarna Card a no-brainer. Can Klarna execute?

Read more: Klarna Q2 2025 earnings release

Affirm (NASDAQ: AFRM)

Affirm just closed out a stellar fiscal year. In Q4, Gross Merchandise Volume grew 43% YoY, revenue grew 33% YoY, and Revenue Less Transaction Costs, Affirm's gross profitability measure, grew 37% YoY. What's more impressive, Affirm posted a GAAP profit for both the quarter and the full year. Unlike Klarna, Affirm didn’t have to sacrifice growth to reach profitability.

GMV growth was driven by strong performance from large merchant partners and rising adoption of 0% APR loans, which are mostly funded by merchants. Volume from these loans surged 93% as the number of participating merchants more than doubled to 25,000. This reflects Affirm’s key strengths: broad distribution with the largest merchant partners and disciplined underwriting.

"…a version of the card future is 10 million cardholders and something along the lines of $7,500-plus transaction GMV per year. The current trailing 12 months of the cardholder is about $4,700. We're not quite at the $7,500 but we're more than halfway there."

Max Levchin, Affirm Q4 FY 2025 earnings call

But the real highlight was the Affirm Card. Despite Affirm hardly marketing it, the card now has 2.3 million cardholders (up 93% YoY) who spent $1.2 billion last quarter (up 132% YoY). Max Levchin repeated the long-term goal: 10 million cardholders, each spending over $7,500 a year. A few quarters ago, that felt far off; now it looks within reach.

Read more: Affirm's Q4 FY 2025 Shareholder Letter

Circle (NYSE: CRCL)

My bull case for Circle rested on two pillars: first, that its distribution partners would help it gain share in a rapidly expanding stablecoin market; and second, that it would diversify beyond interest income by building new services around USDC. Recent news gives us reason to revisit this bull case.

Circle just announced it is building its own Layer 1 blockchain, Arc, purpose-built for stablecoins. The move does fit the thesis: Circle is experimenting with new products that could open up non-interest revenue streams. However, the thesis that Circle can steadily gain market share may now be at risk.

Tether, the world’s largest stablecoin issuer, just unveiled USA₮, a regulated U.S. dollar stablecoin. Tether ignored MiCA in Europe, where USDT has been delisted from regulated exchanges, but it isn’t missing the opportunity to become a regulated U.S. issuer under the GENIUS Act.

"Tether, the largest company in the digital asset ecosystem, today unveiled USA₮, its planned U.S.-regulated, dollar-backed stablecoin, along with the announcement and appointment of Bo Hines as Tether USA₮’s future Chief Executive Officer."

Tether

And this is no small challenge. Tether is far larger than Circle: $170 billion in circulating USDT versus $73 billion in USDC, with 28 million active addresses compared to Circle’s 11 million, according to Artemis. If Tether successfully pivots into the regulated market, Circle’s growth path won’t be as straightforward. Still, stablecoins are a distribution game, and Circle’s partnership with Coinbase gives it one of the strongest distribution engines in the U.S.

The real test ahead: can Circle hold its ground in the U.S. as Tether steps onto regulated turf?

Read more: Tether Unveils USA₮, its Planned U.S.-Regulated Dollar-Backed Stablecoin

Block (NYSE: XYZ)

In August, I wrote about Chime reporting its first quarter as a public company. It was a strong quarter, and the company gave a promising outlook for the year. What stands out about Chime isn’t just its 8.7 million active members, but that 67% (5.8 million) use Chime as their primary account, something very few fintechs can say. Primacy opens many opportunities, and this is what excites me about Chime.

Block reported its second quarter results the same day as Chime, and out of the blue, but not really, Block decided to share the number of “banking actives” for Cash App. Using Chime’s definition of "primary account relationship" ($200+ in direct deposits or 15+ transactions a month), 11 million of Cash App’s 57 million active users qualify. In other words, Block quickly made the point: Cash App is bigger than Chime.

“…if we count anyone who deposits $200+ in paychecks or transacts 15+ times a month, we’d have ended June with 11 million banking actives, adding over 1 million actives in the past year.”

Block Q2 2025 Shareholder Letter

There’s another area where Chime and Cash App compete: cash advances. Chime offers MyPay, while Cash App has Borrow. Both companies see their cash advance products as critical to driving growth. In Q2 2025, Block reported that Borrow origination volume grew 95% YoY to $18 billion on an annualized basis. The company is also testing higher limits for paycheck deposit users to drive more conversions and encourage them to make Cash App their primary account.

I ended my August column by saying, “The real battle isn’t Chime vs. Cash App: it’s both of them against the banks.” I still believe that, though in the short term we’re likely to see some fierce competition between the two.

Read more: Block Q2 2025 Shareholder Letter

Robinhood (NASDAQ: HOOD)

Robinhood is getting social. The company announced Robinhood Social, a new feature that will let traders share their positions, comment on each other’s moves, and follow real-time profit and loss updates. A small group of users will get access early next year, with broader rollout to follow. The feature will be free to Robinhood customers (of, course!).

If this sounds familiar, it should. eToro pioneered the concept of a trading feed more than a decade ago, and social trading remains one of its strongest differentiators. Now Robinhood wants to bring the same community-driven tools to its own customer base, keeping the energy of eToro trading feed, FinTwit, and Reddit inside its own ecosystem.

"We want to be not just the platform where you can transact and make that trade, but also help with idea generation and provide a new source of information to our traders and investors.”

Vlad Tenev via Bloomberg

This move raises the bigger question: what, if anything, can stop Robinhood? The company has scale, financial resources, and engineering power to replicate almost any feature out there. It mastered the use of incentives to attract new customers and pull assets from competitors. And it’s no longer just a U.S. story. Robinhood has started expanding internationally, with crypto in the EU and brokerage in the UK.

So how exactly are smaller brokerages, such as eToro and Webull supposed to compete?

Read more: Robinhood to Launch Its Own Social Network

Multiples

Can you spot the fresh IPOs? 👇🏻

Median Enterprise Value / EBITDA multiples

Highest Enterprise Value / EBITDA multiples

Median Price / Earnings multiples

Highest Price / Earnings multiples