Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
The Rise of Private Markets and Opportunities for Fintechs
Private Markets Report | Sep 23, 2024
Image: F2 Staying Private for Longer (Mackenzie Investments & Northleaf)
Fintechs and Investors Will Benefit from Private Market's Growing Influence
The growth of private markets is changing the investment landscape providing fintechs, investors, and founders with new opportunities for expansion and diversification. The inaugural Private Market Investing Report from Mackenzie Investments and Northleaf Capital Partners highlights that although the value of private markets has increased to $16 trillion USD they still only account for 5% of all the capital in the world. For investors looking to benefit from uncorrelated, high returning assets, private markets are becoming increasingly important as access to infrastructure, financing, and private equity grows. Fintech companies have a unique opportunity to capitalize on the growth of private markets and provide creative financial solutions.
Key Trends and Opportunities
1. Shift to Private Markets
While growth capital has historically mostly come from public companies, more and more organizations are choosing to remain private. More than 90% of businesses in the United States are privately held, and from 2006 to 2023, the number of companies supported by private equity has increased 180% while the number of publicly traded firms decreased by 49%.
See: Fintech Opportunities in Barter and Trade Marketplaces
This change of accessing growth capital from private equity markets is allowing business owners to focus on growth rather than running their operations to meet the requirements of being a publicly traded company. In addition to capital, private equity backers provide strategic guidance that can be a major difference maker in their success and sustained growth.
2. Private Equity and Credit Growth
Global assets under management (AUM) for private equity increased from $2.6 trillion in 2013 to over $10.5 trillion in 2023. The Mackenzie Investments and Northleaf report anticipate AUM for private credit will increase from $1.7 trillion in 2023 to $2.7 trillion by 2028. What's fuelling the growth? These institutions are seeking alternative investments that offer more stability and higher returns than public bonds and stocks.
Fintechs that provide alternative lending platforms can connect private borrowers with private lenders while offering a range of flexible and innovative credit solutions. These platforms can help mid-market businesses obtain development and growth capital, especially if supported by private equity.
See: For Digital Assets, Private Markets Offer the Greatest Opportunities
Also, fintech platforms that facilitate fractional ownership, crowdfunding, or digital investments in credit and private equity can capture a growing segment of individual investors looking for liquidity options including secondary markets.
3. Resilience and Stability in Volatile Markets
The private market investment report talks about the strength and resilience of private markets (vs public markets). For instance, private equity performed better than public markets during the 2022 inflation shock, declining only -3.3% as opposed to -20.9% for public stocks. For investors looking for protection against economic uncertainty, private markets have been an attractive option.
Fintech opportunities include asset management or private market investing distribution platforms.
4. Infrastructure Investment and ESG Trends
Investment in private infrastructure is rising especially in some sectors like ESG (Environmental, Social, and Governance) initiatives. According to the analysis, the yearly cost of global infrastructure is expected to reach $3.3 trillion USD by 2030, with a substantial amount going towards sustainable development.
See: AI Leaders and White House Discuss Energy Infrastructure
Fintech companies have the ability to create platforms that link investors to environmentally friendly projects, such carbon offsets, renewable energy, and sustainable infrastructure. Fintechs can also look to capitalize on the increasing demand for ethical investments by providing investment options in green bonds, climate-tech funds, and sustainable infrastructure.
5. Growing Access for Individual Investors
In the past institutional investors were the only ones who could access private market deals. Today, individual investors can now access these markets more easily thanks to new fund formats and policy changes. According to the research, fintech platforms that aim to democratize private investment are finding new opportunities as a result of individual investors' increased access to infrastructure, financing, and private equity.
Outlook
Private markets are a great source of scale-up capital for growing companies while investors benefit by acquiring assets with strong returns and low correlation that are resilient to the volatile fluctuations of pubic markets.
See: United Efforts to Expand Access to Private Markets
As more and more companies choose to remain private for longer and investment infrastructure demands increase, fintech providers are in a great position to bridge the gap with (private) investors.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, artificial intelligence, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
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