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Fintech earnings: Coinbase and Upstart report over 11-fold revenue growth

CNBC | Ari Levy | Aug 11, 2021

Fintechs growth and boom - Fintech earnings:  Coinbase and Upstart report over 11-fold revenue growth

If you had any lingering doubts about the growth of fintech, take a peek at Tuesday night's earnings reports from two newly-public companies.

Cryptocurrency exchange Coinbase reported a 12-fold increase in revenue from a year earlier to $2.23 billion. Not to be outdone, online lender Upstart Holdings said revenue climbed 11-fold from a year ago to $194 million.

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These numbers are staggering.

For companies of this scale to even double annually requires being in the right place at the right time with the right team, and often means a hefty infusion of capital to acquire new customers. The most successful tech companies of all time never saw growth rates in the quadruple digits while public.

Amazon's top growth was around 300% in 1998, shortly after its IPO. Google's revenue doubled in its first few quarters on the market in 2004 and 2005 before tapering off. Facebook never got into triple-digits growth after going public.

Even in the pandemic-fueled year of 2020 — when new users flocked to digital work and exercise products — Zoom's growth topped out at 369% and Peloton's at 232%.

What's happening in finance is different, and Coinbase and Upstart represent the public market proxies for some of the biggest shifts happening across the globe.

Big banks and investment firms have lost their control over the consumer. Loans are available from a plethora of easy-to-use online services. Start-up banks and credit-card companies are killing the fees. So are app-based brokerages and trading platforms. In the public and private markets, the valuations are astronomical.

Square, which went public in 2015 as a payment service for small businesses, is now worth $125 billion and has a portfolio of business, consumer and money-transfer services.

See:

Last week, Square said it's spending $29 billion in stock on Afterpay, an Australian provider of point-of-sale loans for retailers. That's one of the biggest tech deals ever, and more than Microsoft, Google, Facebook, Amazon, Apple, Oracle, Cisco or Intel have ever spent on a deal.

"On the heels of Square's purchase of Afterpay, there's no other space in tech that's as hot as fintech," said Eric Jackson, a tech investor and president of EMJ Capital.

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NCFA Jan 2018 resize - Fintech earnings:  Coinbase and Upstart report over 11-fold revenue growth 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, 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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