Fintech investors are rediscovering an old fashioned idea: companies should make money.
After more than a decade of funding growth at almost any cost, venture capital firms are increasingly directing capital towards fintechs that can demonstrate profitability or at least a credible path towards it. The change is visible across major markets, from the United States to Europe and parts of Asia, as higher interest rates and slower exits force a reassessment of risk.
In recent quarters, investors have shown greater enthusiasm for firms such as Stripe, Adyen and Block, which generate substantial transaction revenue and operate at scale, than for younger companies still dependent on incentives to attract customers. Even among digital banks, those with lending income or corporate services are faring better than consumer-focused platforms that rely heavily on interchange fees. The shift is not ideological. It is practical. With public markets less receptive to loss-making listings and acquisition activity muted, venture funds are under pressure to show returns rather than narratives. Several investors privately acknowledge that what was once described as “patient capital” is now simply expensive capital.
In Europe, fintechs such as Klarna and Revolut have adjusted accordingly. Klarna has cut costs and narrowed its strategic focus after a sharp valuation reset, while Revolut has leaned more heavily into subscriptions and business accounts as it seeks to diversify revenue. Both companies continue to grow, but with noticeably less enthusiasm for subsidised expansion.
In the United States, payments and infrastructure firms are increasingly favoured over consumer apps. Companies that sell software or compliance tools to banks and merchants are seen as more resilient, particularly as regulation tightens and customer acquisition becomes more expensive.
The recalibration is also evident in emerging markets. In Africa, where fintech adoption remains strong, investors are more cautious about platforms expanding into multiple countries without a clear monetisation strategy. Several early stage firms have slowed regional rollouts, choosing instead to deepen revenue in core markets. Growth, it turns out, is easier to admire than to fund.
Industry executives argue that the shift represents a maturation of fintech rather than a retreat. Many point out that trad banks, long criticised for inefficiency, are now being used as a benchmark for sustainability. The comparison is not always flattering, but increasingly unavoidable.
For founders, the implications are clear. Hiring plans are more restrained, product launches more focused and fundraising conversations more grounded. Partnerships with established financial institutions, once dismissed as unambitious, are now framed as sensible.
None of this suggests that innovation has stalled. Digital payments continue to expand, embedded finance is spreading and new infrastructure remains in demand. What has changed is the tolerance for losses without explanation.
Investors still back ambition. They are simply less willing to pay for it indefinitely.
