​

An Investor's Guide to Capital Markets Tech in 2025

Capital markets technology is evolving with the emergence of new financial products. Commission-free trading by Robinhood was one of the developments that unlocked capital for millions of young investors. It is a dynamic landscape and about to be reawakened.

This post dives into the current state of capital markets technology, drawing insights from a recent FT Partners report. FT Partners is a leading investment bank focused exclusively on FinTech and produces some amazing content. So let’s take a closer look at valuations, deal flow, and market insights within financial technology..

Public Market Valuations: A Closer Look

For the past two years, “Fintech has been dead” on many accounts. The capital markets dried up and valuations came to a halt. The public markets didn’t have an appetite for private companies losing a tremendous amount of money. That’s why the fintech IPOs slowed down as well.

However, while valuations have adjusted from their peak, certain segments continue to command significant multiples.

For example, Capital Markets Focused Information Providers currently trade at a median of 10.9x 2024E EV/Revenue, while Large Global Exchanges are at 9.9x. The market has always delivered a premium for monopoly styled businesses. Stocks in this category include Moody’s, S&P Global, the CBOE and the Nasdaq. All excellent businesses. For context, S&P Global has been since 1860. The company has significant staying power. Quite counterintuitive for a data publishing business.

As for EBITDA multiples, online brokers take a dominant position. I mentioned Robinhood earlier but they are only one of the market leaders. Companies like Interactive Brokers and Charles Schwab command a premium because of their brokerage platforms.

With the new Administration, I can see crypto mining, wallets and exchanges command a higher premium soon too. The change in leadership at the SEC is bullish for investors who have been ‘debanked’ for years. I think we will see more capital market IPOs going into 2025 and 2026. WeBull and eToro have both shown interest already.

Key Deal Activity: M&A and Financings

Despite a general cooling in the broader tech market, some deal activity within capital markets technology remains robust. The FT Partners report highlights several significant M&A transactions and financings. Recently I wrote about several deals such as MoneyLion, OneStream, Envestnet and Enfusion.

After the U.S. Presidential election in 2024, investor interest picked up in crypto and wealthtech. The three biggest M&A deals in 2024 Q4 were Robinhood’s acquisition of TradePMR, Chainanalysis-Hexagate and Stripe’s acquisition of Bridge. For me, the Robinhood deal was a massive shift in their product strategy. It was a vertical push towards a more mature, institutional customer base.

Fintech Market Trends to Watch in 2025

I avoid buzzwords and rather focus on customer problems. I believe we can make money better with great technologies. So of course, A.I. Automations, cybersecurity and data analytics will be abused during this capital market cycle. I think these issues have stood the test of time and will never go away.

One trend I think will pick up are Agentic A.I.’s, which is the next stage of chatbots. Instead of the typical chatbot, these agents will execute several tasks at once. They will be able to make payments and perform high-functioning jobs in less time than a human. These agents will combine the technologies of crypto, A.I. and software. The revenue per employee in financial services will get higher because of it. I look forward to this evolution.

The capital markets technology sector offers a wealth of opportunities for investors. Both in the private and public markets. Valuations and deal activity are both picking up, fueled by new investments and IPOs coming this year.