How Regulated Fintechs Are Valued in M&A Transactions

From recurring revenue multiples to regulatory capital requirements, understanding valuation drivers is crucial for both buyers and sellers.

Valuing a regulated fintech requires balancing traditional metrics with regulatory-specific factors.

Revenue Multiples

Active fintechs typically trade at 2-5x recurring revenue, depending on growth rate and client stickiness. Payment businesses may command higher multiples due to transaction-based scaling.

Regulatory Premium

A clean, established licence adds a base value regardless of revenue. Dormant EMIs might fetch £300-500k; active ones with banking relationships significantly more.

Discount Factors

Outstanding regulatory issues
Key person dependency
Client concentration
Capital shortfalls