On Wednesday, as per financial technology startup Nium, it has received raised $50 million in new funds from investors. Nium is also targeting an initial public offering (IPO) in the next 18 months. It places Nium’s valuation at $1.4 billion. That marks a 30% cut in from its previous valuation of $2 billion, which the firm notched in 2022 when it last raised external venture capital.
The Nium fundraising round was led by an undisclosed Southeast Asian sovereign wealth fund. The Nium fundraising was backed by venture capital firms BOND, NewView Capital, and Tribe Capital.
Nium’s fund usage
Nium’s CEO and founder, Prajit Nanu, said the firm would use the fresh capital to double down on mergers and acquisitions, targeting other growth-stage payment firms.
Nanu said Nium’s valuation downgrade was the result of a broader depression in public market valuations of fintech companies.
Decline in valuations of fintech companies
Fintechs have seen their stock prices slashed in recent years as a result of macroeconomic pressures, including high inflation and rising interest rates.
“Being realistic, when we raised in early 2022, public markets were killing it,” Nanu said. “The public markets have not been kind to fintech.”
Nium optimistic for IPO
Nanu said that, despite the lower valuation, he is still bullish on the growth story for Nium and is confident the company will go public in the next 18 months, targeting a flotation in the third or fourth quarter of 2025.
He added that Nium valuation is not a concern for him and that it would not matter what value the company prices its shares as markets are volatile by nature.
“Whether you go public at $1 billion, $5 billion, it doesn’t matter. Because the valuation is only when you get bought, or when you go through an IPO,” he said.
He noted the example of Stripe, which raised a $95 billion valuation in the heady days of 2021 before slashing its value to $50 billion and then boosting its valuation to $65 billion in secondary share transactions.
Nium not into crypto
As per Nium’s CEO, they are not interested in acquiring companies in the cryptocurrency space as are unable to see merchant demand for crypto as a payment method.
“It’s on the very early side of infrastructure,” Nanu said. “Nium in the end is a layer on top of a lot of banks in the world.”
“Banks have gone from, crypto is hot, to not crypto, to crypto,” he added. “It’s not one shoe fits all.”
That’s despite a huge rise in prices of cryptocurrencies like bitcoin. Bitcoin has seen its price climb roughly 150% in the last 12 months.
Bitcoin has rallied off the back of renewed investor interest. This was following the approval of spot bitcoin exchange-traded funds in the U.S.
