Fintech stocks largely came under pressure in the first quarter of 2026 as investors retreated from growth stocks amid a more uncertain macroeconomic environment.
Valuations across the sector fell sharply, with fintechs significantly underperforming the overall market. One notable exception was Freedom Holding Corp., whose shares rose nearly 17% during the period. The move was supported by its more diversified ecosystem business model, which extends beyond financial services to include telecommunications, travel and other lifestyle segments.
A decline in fintech valuations was highlighted in a report titled “Fintech’s Rapidly Melting Market Cap” published in mid-April by PitchBook, a leading provider of financial data and analysis. “The public fintech sector entered 2026 with momentum, but experienced a sharp reversal in the first quarter as the Iran war boosted energy inflation, reversing interest rate cut expectations and pushing investors into a risk-off posture. With 18% of the sector’s market capitalization wiped out and average cohort returns ranging from -13% to -35.3%, fintech underperformed significantly in the first quarter broader market,” the report said. It’s not that fintech companies suddenly got worse, but rather that investors were less willing to pay high valuations for growth stocks in a more uncertain, inflation-sensitive environment.
Fintech under pressure
Declines were widespread across almost all fintech segments, spanning credit-focused Buy Now Pay Later (BNPL) providers, brokers and payment platforms.
BNPL shares came under pressure as investors retreated from high-growth, credit-sensitive business models amid rising inflation concerns and fading expectations of interest rate cuts. Klarna Group (KLAR), a flexible payments provider that generates revenue from consumer installment loans and merchant fees, fell 54% in the first quarter of 2026. Affirm Holdings (AFRM), which offers transparent payment plans and consumer credit products with no hidden fees, fell 38% in the first three months of the year.
Even the traditional lending segment, typically considered less risky than consumer lending, was not immune. Upstart Network (UPST), an AI-driven lending platform that uses proprietary machine learning models to underwrite personal, auto and home loans, fell 44% in the period. Retail brokerage and investment platforms also came under pressure. Robinhood Markets (HOOD), the operator of the groundbreaking commission-free trading app Robinhood, fell 40% in the quarter.
Digital payments and money transfer fintechs performed better, but still saw a decline in market capitalization. Shares of PayPal Holdings (PYPL), one of the most established global payments fintechs operating in around 200 markets, fell 22%. Shares of Block Inc. (XYZ), which operates Square, Cash App and Afterpay and includes payments, merchant services, peer-to-peer transfers and BNPL, fell 8%.
The downturn also extended to the neobanks and consumer finance platforms segment. SoFi Technologies (SOFI), which is building an all-in-one ecosystem that includes savings, banking products, loans, investments and asset protection in a single app, saw its market cap fall by 42%. Even Nu Holdings (NU), one of the largest digital financial services platforms and a global neobank pioneer that serves around 131 million customers in Brazil, Mexico and Colombia through its branchless model, posted a 16% decline in the first quarter.
Freedom Holding: Another Story
Freedom Holding Corp. shares moved in the opposite direction in the first quarter, rising nearly 17% from $124.23 in early January to $144.88 on March 31. The stock continued to rise into April and broke the $160 mark in the middle of the month. Freedom’s market capitalization has exceeded $9.5 billion. Growth was supported by a number of positive corporate developments, including further expansion into international markets, continued integration of Freedom Holding’s ecosystem and strong financial results.
Revenue for the quarter ended December 31, 2025 rose to $628.6 million from $526.1 million in the previous quarter, while net income nearly doubled to $76.2 million from $38.7 million. In the first nine months of the financial year, the group generated revenue of $1.69 billion and net profit of $144.5 million. These figures reflect growing investments in the further development of Freedom’s ecosystem, which integrates financial, telecommunications and lifestyle companies and is available to customers through the holding company’s SuperApp, which now serves 11 million users.
In its core market of Kazakhstan, the group operates a leading brokerage business, is one of the top ten banks by assets and has strong positions in the insurance sector. The company is also strengthening its domestic banking presence through further acquisitions
In neighboring Tajikistan, the Freedom Bank Tajikistan-based group is replicating the model previously tested and refined in Kazakhstan. Since Freedom Holding sees banking as a locomotive for the entire multi-industry ecosystem, the company is acquiring new banks in Georgia and Turkey. Most recently, management also announced plans to purchase banks in Armenia and France.
In addition, the group is actively developing its services in the travel segment such as ticket sales, bookings and events in Europe. The travel-focused subsidiary of Freedom Holding Corp. plans to cover all travelers’ needs, from a global hotel aggregator scheduled to launch in May 2026 to transfers, excursions, curated tours, visa support and more. The holding company wants to compete with those of the largest international platforms such as Booking.com and Airbnb.
In technology, the group is investing in proprietary AI tools and assistants and plans to develop a national AI hub in collaboration with Nvidia to support the wider adoption of artificial intelligence to up to 70% of the Kazakh population.
To finance all of these moves, Freedom Holding is considering a possible secondary offering of shares outside the United States, in Kazakhstan and possibly Hong Kong.
The ecosystem advantage
Analysts point to the company’s more diversified business model that goes beyond financial services. Unlike many fintech companies that rely primarily on lending, payments or brokerage activities, Freedom has multiple revenue streams that have helped boost the company’s stock price during the industry-wide decline.
“The era of standalone financial services is coming to an end. The future lies in super apps that integrate financial services into everyday life – from grocery shopping to travel planning. Banking will increasingly become an invisible layer within these ecosystems,” says Saurabh Tripathi, senior partner and global leader of the Financial Institutions practice at Boston Consulting Group.
According to Fortune Business Insights, the global fintech market was valued at $394.9 billion in 2025 and is expected to reach $1.76 trillion by 2034, representing a compound annual growth rate of 18.2%. However, much of this growth is increasingly expected to come from embedded financial services that are integrated into broader digital ecosystems rather than delivered as standalone products.
