To avoid decreasing valuations, late-stage fintechs are more hesitant to go public or raise additional private capital, which creates a great environment for incumbent financial firms to partner with them. 

While there are certainly downsides to the current market conditions, it’s a perfect time for fintech partnerships, according to a top exec at Synchrony, the $15 billion market-cap credit card issuer and bank.  

Late-stage fintechs are putting off IPOs and avoiding new fundraising, which is “leading to a whole set of new opportunities for Synchrony that we wouldn’t have seen one or two years ago,” chief strategy officer Trish Mosconi said during a recent podcast interview with Tearsheet. 

To drive revenue, fintechs are looking for partnerships “in ways that you didn’t see happening previously, because they would have been very focused on their exit,” she said. This creates a “win-win” situation, where incumbents can use these relationships to test new products “to really understand what’s going to stick and what’s not.”  

Beyond traditional partnerships, startups are also more open to strategic investments from corporates, which don’t necessarily create new valuations. Synchrony’s investment arm has 14 active investments and commercial relationships with 7 of those firms. For example, its portfolio company Prove provides identification and authentication for Synchrony’s loan underwriting.  

You can listen to the entire podcast episode here.