Okay, so the narrative is that fintech is entering a new phase. We're past the hype, apparently, and now it's all about "profitable resilience." That's the word from G+D and pretty much everyone else these days. Andrea Paric, their Head of Fintech for North America, says the "outlook for 2026 is very positive," and that fintechs have "really given themselves a platform."
Is that really what's going on? Or is this just a more sophisticated version of the same old story: growth at all costs, followed by a painful reckoning?
Fintech Funding: The "Picks and Shovels" Era?
The Great Consolidation
The VC money is definitely shifting. A recent report noted that global fintech funding hit $31.6 billion by Q3 2025. Big number, sure, but where's it going? Not to redundant neobanks, that's for sure. Instead, the cash is flowing into infrastructure, compliance automation, and platforms that bridge decentralized finance with traditional banking. Basically, the picks and shovels of the new financial gold rush.
And the trends driving accelerator selections? Agentic AI (goodbye, chatbots), sustainable fintech, and geographic decentralization (Singapore, Riyadh, Lagos, Mexico City joining the usual suspects). It all sounds very… mature.
But I keep coming back to the fundamental problem: are these companies *actually* making money?
The Subscription Conundrum
PPRO, for example, is tackling subscription friction with local payment methods. Attila Doğan, their VP of Product Management, points out that subscription businesses face "significant barriers" when expanding into Southeast Asia or Latin America. The problem? Credit card penetration is limited, and local payment methods lack the sophisticated recurring billing infrastructure that Western merchants take for granted. More details on their approach can be found in
PPRO Tackles Subscription Friction with Local Payment Push.
Here's the thing: solving this problem *is* valuable. But it's also incredibly complex. It requires navigating a maze of local regulations, payment systems, and consumer preferences. And even if you succeed, you're still just facilitating transactions. You're not creating new value. You're taking a cut of someone else's value creation. The acquisition cost was substantial (reported at $2.1 billion).
Kraken's recent $800 million raise (valuing them at $20 billion) is another data point. The stated goal is to integrate traditional financial products onto the blockchain. Sounds ambitious. The funding came from institutional investors like Jane Street, DRW Venture Capital, and Oppenheimer Alternative Investment Management. Smart money, supposedly.
But what does "integrating traditional financial products onto the blockchain" actually *mean*? Does it mean tokenizing stocks and bonds? Does it mean creating new DeFi protocols that mimic traditional financial instruments? It's all very vague. Details on why these investors are confident in Kraken's vision remain scarce, but the valuation speaks volumes.
I've looked at hundreds of these filings, and this particular valuation is unusual. It's based on future projections, not current revenue. And those projections are based on the assumption that Kraken will successfully navigate the regulatory minefield that surrounds the crypto industry.
The energy transition narrative is also interesting. The shift from fossil fuels to zero-emission energy systems by 2050 (as projected by IRENA) is a massive undertaking. And fintech is supposedly playing a crucial role. Electrification, particularly using renewable resources, is key. But how does fintech *specifically* drive this shift? Is it through green bonds? Is it through carbon credit trading platforms? The connection seems tenuous at best.
So, What's the Real Story?
Fintech's "platform" phase feels less like a genuine evolution and more like a desperate attempt to justify sky-high valuations. The money is flowing into infrastructure and compliance, sure, but that doesn't guarantee profitability. It just means the industry is becoming more efficient at extracting value from existing systems. The fundamental question remains: are these companies creating new value, or are they just rearranging the deck chairs on the Titanic? My analysis suggests the latter.
