Fintech was hot in 2021, but looking back… maybe too hot?

The industry exploded last year, seeing record investment — $132 billion worldwide, according to CB Insights — with many startups reaching sky-high valuations, including Stripe at $95 billion, Klarna at $45 billion, and Plaid at $13 billion. While these companies have very real customer bases and products, it’s not hard to imagine that at least some of these valuations were backed by hype.

The dominoes have already started to fall here. In July, Swedish buy now, pay later startup Klarna raised $800 million at a new valuation of $6.7 billion. That represents a staggering 85% drop in value over the course of about a year. Ouch.

But it was refreshing to say the least that Klarna CEO Sebastian Siemiatkowski was one of the few who didn’t shy away from the realities of startup valuations in this market. He went to Twitter after Klarna announced its new downgrade to acknowledge current market conditions and state that the downgrade didn’t mean it was actually doing that much worse, citing profitability and growth into new markets. Klarna has since continued to launch in new regions.

How are last year’s other fintech hotshots faring? Well, not that hot.