May 7, 2025
May 2025 newsletter: Market Conditions, AGM and IPO Readiness Workshop
Message from Nigel Morris, Managing Partner:
Just 75 days ago, I was decidedly bullish on the U.S. economy, projecting falling interest rates, deficit-reducing policies and a lighter regulatory touch. However, the past few months have been marked by profound uncertainty—macroeconomic volatility, political disruption and shifting global dynamics. While Washington remains somewhat a black box, one thing is clear: I remain bullish on fintech.
Following the COVID-era surge, when capital flooded the space, valuation multiples ballooned but have now recalibrated. We’ve since entered a phase of relative stability. The underlying fundamentals of the fintech market remain strong and now, for the first time in a while, there are real signs of favorable conditions for the thawing of the IPO market.
There’s still tremendous opportunity for builders. We continue to see exciting innovation in embedded finance, cross-border payments, stablecoins, commerce infrastructure, AI-driven advice and wealth management, and core back-office systems. Nimble early-stage fintechs are rapidly testing and integrating AI—cutting costs in code development and in customer service through chatbots, and increasingly unlocking product innovation—while incumbent banks, weighed down by legacy systems and bureaucratic processes, and even scaled fintechs, lag in adoption. I am excited for the AI innovations within our portfolio over the coming months and years.
Despite ongoing uncertainty, regulatory winds appear to be shifting positively for fintech. The Trump administration’s dismantling of the CFPB, combined with the more welcoming posture for fintechs seeking bank charters, creates more auspicious regulatory conditions for fintechs that could reshape the competitive landscape. Reduced federal scrutiny may unlock a wave of consolidation and also lay the groundwork for renewed IPO momentum in the years ahead.
We are also closely tracking a number of economic indicators that shape both fintech and the broader macro environment. As I noted in my Q1 State of the U.S. Consumer report, consumer spending remains steady and the labor market strong. But significant headwinds for the U.S. economy remain: tariffs and their residual impacts, tighter credit and broader macro pressures could test the fortitude of the consumer in the months ahead. We are carefully watching businesses in the lending space.
Still, this remains a time of opportunity for those building with alacrity, discipline and a focus on unit economics.
Annual Limited Partner Meeting
Last month, we hosted QED's first in-person annual limited partner meeting. We covered a lot of ground, including the global fintech landscape, QED fund performance, the global opportunity for fintech, and beyond. We were joined by over 100 LPs and four incredible portco CEOs to discuss their tremendous growth: Footprint, OneCard, Finkargo and Kin Insurance. Thank you to all who joined us for this event.
Thank You, Frank Rotman!
Saluting Frank Rotman
My co-founder Frank Rotman will transition to a Partner Emeritus role at the end of the year to focus on founding his own startups.
Frank has been named to Forbes magazine’s Midas List of the top 100 investors every year since 2018. He has played a critical role in leading QED’s investment in Credit Karma and in the company’s investments in successful fintech unicorns including Greensky, Flywire and SoFi.
We can't thank Frank enough for his contributions over the last 18 years. We will carry his 'first principles' thinking around on our shoulders. Please join us in congratulating Frank on this exciting next chapter.
The Latest News
What's on the QED Investors team's mind
The Agentic Future of Global Trade: AI-Powered Resilience in an Era of Uncertainty
Global trade has always been a delicate balancing act, but today’s environment feels more like a high-stakes chess match - if the chessboard sometimes caught on fire and the rules changed mid-game because someone flipped it over and threw some pieces out of the window. Supply chain disruptions are no longer the exception but the rule. Tariff structures shift unpredictably, geopolitical tensions reshape sourcing strategies and currency fluctuations ensure no CFO sleeps soundly.
But where there is complexity, there is opportunity. Agentic platforms - AI-driven systems that act autonomously - are emerging as the next frontier in global trade and commerce. These platforms don’t just process information; they make real-time decisions, adapt dynamically to disruptions and reduce reliance on manual interventions that slow businesses down.
- Victoria Zuo, principal, U.S.
Navigating the IPO Journey: Strategic Insights for CEOs
An IPO is more than a financing event; it's a transformative milestone that reshapes a company’s trajectory. But it’s also just one step on a long journey pre- and post-event. The decision to go public should stem from a deep understanding of your company’s strategic objectives, not just market conditions.
There are several key strategic considerations we encourage our portfolio companies to consider when deciding whether IPO is right for their company including long-term vision alignment, capital efficiency vs. public market pressure, cultural readiness, board composition and earnings predictability.
- Camila Vieira, partner, head of Brazil
India's Manufacturing Renaissance: Beyond the False Dichotomy
India stands at a crucial inflection point in its economic journey. While services have powered much of the country's recent growth, the question remains: Can India achieve developed nation status without a robust manufacturing base?
This framing presents a false dichotomy. India doesn't need to choose between manufacturing OR services—it needs manufacturing AND services working in symbiotic harmony.
- Sandeep Patil, partner, head of Asia
Food, Fashion, Football and Fintech: Top Five Impressions from Milan
Our QED tour of local European fintech ecosystems started with Istanbul, and we continued with Milan, which Bill Cilluffo and I visited on a memorable and impressive trip. To say that Italy is the fourth-largest economy in Europe in many ways belies its true size. At 2.5 trillion of GDP, it is about three-quarters the size of France, and two-thirds the size of the UK, and as these numbers demonstrate, the size difference is not substantial. If we look into areas like consumer goods, the size difference becomes even less.
- Yusuf Ozdalga, partner, head of UK & Europe
Washington Weekly Series on PYMNTS
QED partner, head of U.S., joins PYMNTS weekly for its news series Washington Weekly. The series examines how market volatility is reshaping fintech strategies: early-stage firms stay laser-focused on customers while IPO-ready companies hit pause. The damage may be self-inflicted, but the global repercussions could be long-lasting.
Watch the most recent conversation in the series here.
- Amias Gerety, partner, head of U.S.
Data Science x Financial Services
At QED Investors, we have always believed in the transformative power of data to drive financial services forward. But data alone isn’t enough—its value depends entirely on how it is collected, processed and applied to drive decisions and actions. The sheer volume of data being generated today is orders of magnitude greater than ever before, and advances in data platforms have given companies the ability to turn that data into superior financial products. Yet many existing solutions struggle to keep pace, forcing companies to rethink how they store, process and analyze data at scale. This is precisely why we invested in Hydrolix.
Read the full blog here.
- Alex Taub, principal, growth
Wellness Watch
Fundraising and Mental Health
Fundraising is tough—there’s no way around it. The stress, uncertainty, and pressure to secure funding can wear you down fast. Long hours, constant decision-making, and investor rejections can take a toll on your mental health, leaving you exhausted, anxious, and feeling isolated. It’s easy to get stuck in a cycle of stress and self-doubt, but the good news is that you don’t have to power through it alone. There are ways to take care of yourself while still giving your raise everything you’ve got.
Read the full blog here.
- Maryalice Giroux Viljoen, vice president administration
Traveling Around the World!
Where the QED Investors team traveled in Q1
IPO Readiness Workshop in NYC
We invited 15 of our growth-stage companies to New York City to learn more about what it takes to go public and to speak with bankers, analysts, consultants and publicly traded company CEOs about the best practices, pitfalls and alternatives.
Fintech Meetup
Nigel was the keynote speaker at Fintech Meetup in Las Vegas. During the conversation, he recalled his and Capital One co-founder Rich Fairbank's journey when they pitched their idea for a data-driven credit card to banks in the late 1980s. The Capital One story shows “that from small acorns, giant oak trees grow,” and that's why Nigel is a big believer that entrepreneurs can create huge things.Watch now.
QED x F-Prime: Wealth x AI Dinner
We partnered with our friends at F-Prime to host our "Wealth x AI" dinner in New York City this month. Wealth management is undergoing a technological transformation, requiring a new way of looking at the industry. As Shruti Batra discussed in her recent article looking at the future of financial advice and wealth management, the transformation is largely being driven by the great wealth transfer, the emergence of augmented advice and the rapid growth in alternative assets.
GFTN Forum Japan
Sandeep took the stage at GFTN Forum Japan to discuss how digital identity will shape the future of financial services and corridors. His takes included why he's an identity optimist and believes cross border is key.
Fintech Dinner in CDMX
David Coppel hosted a wonderful dinner with Nigel and leaders from the fintech ecosystem in CDMX. Every time we get together, we are always reminded that the level of talent and innovation in Mexico is extraordinary.
Fintech Xchange
Nigel was invited to Fintech Xchange in Utah to take the stage with Discover founder Phil Purcell and Wall Street Journal banking reporter AnnaMaria Andriotis to discuss the future of fintech.
