AMSTERDAM, Netherlands — Financial technology startup Nium told CNBC on Wednesday it has raised $50 million in new funding from investors and is aiming for an initial public offering within the next 18 months.
The funding round was led by an undisclosed Southeast Asian sovereign wealth fund and backed by venture capital firms BOND, NewView Capital and Tribe Capital.
This values Nium at $1.4 billion, a 30% discount to its previous valuation of $2 billion when the company last raised external venture capital in 2022.
Nium CEO and founder Prajit Nanu said the company will use the new funding to focus on mergers and acquisitions targeting other growth-stage payments companies.
Nanu said the company’s down round was the result of a broader decline in public market valuations of fintech companies.
Fintech stock prices have fallen sharply in recent years due to macroeconomic pressures such as high inflation and rising interest rates.
“Let’s be realistic, when we raised capital in early 2022, the public markets were going to kill it,” Nanu said. “The public markets have not been kind to fintechs.”
IPO within 18 months
Nanu said that despite the low valuation, he remains bullish on Nium’s growth story and believes the company will go public within the next 18 months, targeting a listing in the third or fourth quarter of 2025.
He added that valuation is not a concern for him, and that it doesn’t matter how much companies price their shares because the market is inherently volatile.
“It doesn’t matter if you go public for $1 billion or $5 billion, because the valuation is only determined when the company is acquired or does an IPO,” he said.
He gave the example of Stripe, which rose to a $95 billion valuation during the boom years of 2021, then saw its valuation fall to $50 billion before raising its valuation to $65 billion in a secondary stock transaction.
Not interested in cryptocurrency
Nanu said he is not interested in acquiring companies in the cryptocurrency space. Determine merchant demand for cryptocurrency as a payment method.
“This is the very early stages of the infrastructure,” Nanu said. “Ultimately, Nium is a layer on top of many banks around the world.”
“Banks have gone from crypto is popular to not crypto to crypto,” he added. “It’s not for everyone.”
This is despite the fact that the price of cryptocurrencies such as Bitcoin has risen significantly due to increased investor interest following the approval of spot bitcoin exchange-traded funds in the United States.
Bitcoin’s price has risen by around 150% in the past 12 months.