The closely-held fintechs Brex, Ramp Business, Jeeves, Fireblocks and Bolt each reported gains in their valuation during their most recent funding rounds at a time when many startups are struggling to raise money, research firm S&P Global Market Intelligence said in an analysis released this week.

Payments companies “led the pack in valuation increases” and had the biggest average increase in valuation relative to the number of days between funding rounds, S&P said in a June 10 report that included the analysis. The report, which only included U.S. companies, found no evidence of “down rounds,” where companies raise money at a discount to their previous valuations. 

“My biggest surprise was that there were no down rounds,” S&P Analyst Thomas Mason said in an interview, adding that it wasn't a question of if a down round would come, but when and how much.

The analysis suggests that some payments companies, at least to a greater extent than startups in other industries, are defying a worsening macroeconomic environment that has increased pressure on many fledgling companies. But even some payments companies have suffered, including checkout company Fast, which closed its operations earlier this year.

“It’s possible that companies doing down rounds are not disclosing their valuations, though we cannot confirm that based on the data alone,” Mason wrote in the June 10 report. “Another possible explanation is that companies at risk of doing a down round are waiting until they are in dire need of extra funding. The past few years have seen an enormous influx of venture capital into the sector, so many companies might have enough runway to avoid doing one — for now. “

Brex, which provides a high-limit charge card to start-ups along with software to facilitate workplace teamwork, raised $300 million in its most recent funding round in January giving it a valuation of $12.3 billion. The company’s valuation is $4.6 billion higher since its latest funding round, according to S&P.

Rival card companies Ramp Business and Jeeves raised $200 million and $180 million, respectively, in their latest rounds, according to CB Insights. In those rounds, New York-based Ramp was valued at $8 billion, double its previous level, while Jeeves, which also is headquartered in New York, was valued at $2 billion, CB Insights says. That deal quadrupled Jeeves’ previous valuation. S&P estimates that Ramp’s and Jeeves’ valuations are now $4 billion and $1.4 billion higher, respectively.

Fireblocks, a blockchain security company, raised $550 million during its latest funding round in January, giving it a valuation of $8 billion, while online checkout company Bolt raised $355 million during its most recent funding round in January at an $11 billion valuation, according to CB Insights. That was more than double Bolt’s $4 billion valuation in 2021. Bolt is now worth an additional $4.6 billion and Fireblocks $5.3 billion, respectively, according to S&P.

S&P’s analysis didn’t include the big Sweden-based buy now-pay later company Klarna. The Wall Street Journal recently reported that Klarna has had difficulty raising $1 billion in new equity funding, causing the company to mark down its prior valuation as part of the process. The company, which aims to expand in the U.S., ended up cutting 700 workers last month. 

As of the first quarter, there were 261 deals globally in the payments sector recorded, an all-time high, according to CB Insights.

U.S. payments startups raised capital in a record 87 rounds in the first quarter, jumping 61% from the fourth quarter, which saw 54 funding rounds, according to CB Insights’ State of Payments Q1’22 report, released in April.

By Jonathan Berr on June 14, 2022
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