Chime debuted on the NASDAQ last week, and the moment was significant on several fronts. It marked a mainstream success story in consumer fintech - a category that has been largely out of favor in recent years. While some may see Chime’s IPO as a one-off, we view it as the most visible sign of a broader trend we’ve been observing across our own portfolio: a resurgence in consumer fintech. Chime’s IPO and subsequent performance symbolizes not only renewed strength in a long-overlooked segment, but also points to the potential for blockbuster outcomes - the kind that tend to emerge most often in consumer-facing businesses.
The retreat from consumer fintech investing has been well-documented. A Q1 2025 Pitchbook report found that just under 25% of venture dollars across the fintech ecosystem went towards consumer-focused companies, down from 52% of VC dollars in 2020. Within that decline, late-stage consumer fintech was hit particularly hard: late-stage deal volume fell from $82 billion in 2021 to just $14 billion in 2023, the lowest level since 2016. These same dynamics played out within venture as a whole.
We’ve felt the effects of this retreat firsthand. One founder in our portfolio, still pre-product, recounted being asked to present CAC-to-LTV ratios - a question not only misaligned with their stage but emblematic of how much early-stage consumer investing muscle memory had eroded. One founder I spoke with noted that this year’s Spring 2025 YC batch had just four consumer companies.
This has produced knock-on effects with respect to founders. Fewer investors putting capital into the space has meant fewer founders building consumer companies. With this dynamic at play, it’s no wonder that we can count the number of large consumer fintech funding rounds in the past 12 months on one hand. Large rounds into Bilt and Monarch are very much the exceptions rather than the norm.
In contrast to the caution dominating private markets, public investors are recalibrating. After a steep post-2021 reset, fintech stocks are now showing strong signs of recovery. The F-Prime Fintech Index, which tracks a broad set of public fintech names, dropped nearly 78% from its peak through mid-2024. But in Q1 2025 alone, it rebounded 29%, outperforming the S&P 500.
Profitable consumer fintechs have done even better, with a 36% average return over the same period. These aren’t speculative pops. They’re grounded in solid operating performance. Remitly expanded its active customer base from 6.2 million to 8 million, while growing revenue 34% year-over-year. Klarna saw a 15% revenue increase, bolstered by a 33% jump in U.S. operations. And Dave.com (a Restive portfolio company) was one of the biggest gainers in US financial stocks in 2024 (and has continued to grow since).
Chime’s IPO, meanwhile, opened above its pricing range and has climbed 18% since listing. Valued at roughly 7.6x trailing revenue, the company’s debut is a high-profile reminder that scale, clarity of product-market fit, and consumer relevance still matter - and that the market will reward them.
Here’s the counterintuitive secret: the shift is by no means limited to public equities. Within our own portfolio at Restive, our consumer portfolio is not only active—it’s outperforming. Of the investments made since our first fund in 2019 (excluding Dave), four of the five top revenue generators are consumer-oriented or monetize primarily through consumers. Collectively, these companies are generating hundreds of millions in annual revenue—and growing faster, on average, than their enterprise counterparts.
We’ve seen a marked acceleration in the past 6–12 months. Some of that may be timing—the pre-seed companies we backed are reaching scale. But it also bucks the prevailing macro narrative around the U.S. consumer, where rising delinquencies and household debt have stoked concern. That tension highlights an important point: consumer fintech often thrives in times of financial anxiety. When people worry about their money, they become more motivated to manage it, optimize it, and explore new ways to spend and save. That behavioral shift creates fertile ground for innovation and adoption.
None of this is without precedent. Modern consumer fintech was born out of the 2008 financial crisis. As trust in traditional institutions eroded, a wave of entrepreneurs built tools to help consumers regain control over their financial lives. Companies like Credit Karma, NerdWallet, Venmo, Square, Wealthfront, SoFi, and Stripe emerged during or shortly after the GFC—driven by mobile adoption, regulatory windows, and the collapse of incumbents’ reputations.
The COVID-19 pandemic provided a second major inflection point. Amid lockdowns and economic disruption, consumer fintechs again proved resilient. The World Economic Forum reported that fintech firms grew 13% in 2020—outpacing the 11% average of prior years. In countries with stricter lockdowns, transaction volumes were 50% higher than in those with more lenient measures. In each case, the crisis created opportunity: for new behaviors, new distribution channels, and new user needs.
Today, another transformative force is gaining momentum: AI. The promise of hyper-personalized, adaptive, and automated financial services is no longer hypothetical. It’s here.
From our vantage point, AI presents a “double tailwind”: a foundational platform shift and an accelerating pull from consumers. We’re already seeing the impact across our early-stage portfolio: companies using AI to help people manage their subscriptions, purchase their homes, and autopilot their money.
What we’ve seen so far is only the beginning. As AI tools improve and expectations rise, we believe the next generation of consumer fintech companies will not just benefit from the AI wave—they will define it.
If you’re building something transformative, we want to hear from you.
© 2025 Restive®, Inc.
