Fintechs Out-Acquire Banks for the First Time, Signaling Shift in Financial M&A

For the first time on record, fintech companies have out-acquired banks in M&A activity, according to a new report from N5Deal, a marketplace for licensed financial businesses. The 2026 Fintech M&A Report highlights a structural shift in how financial infrastructure is built and acquired, with global fintech M&A volume projected to hit $40–60 billion in 2026, up from roughly $25–30 billion in 2024.

The report emphasizes that licensed financial entities are not priced like ordinary companies. A money-transmitter license, an EMI authorization, or a banking charter can take five to seven years to obtain and significant capital, and re-licensing on change of control can take 6–24 months. Buyers who price regulated entities purely on revenue multiples often misjudge the true value of the regulatory foundation itself.

Ihor Vlasov, co-founder of N5Deal, stated, "The most expensive mistake we see is buyers pricing a licensed fintech as if it were a software business. That regulatory foundation is often worth more than the revenue multiple, and the market is only now learning to price it correctly."

Key findings from the report include:

Regulatory foundations now drive deal rationale. Acquiring a licensed entity allows buyers to enter regulated markets years faster than building from scratch, making time-to-market a primary motive in cross-border payments and Banking-as-a-Service consolidation.

AI-native compliance is repricing valuations. AI-enabled fintechs are trading at 20–25% premiums, with the highest in RegTech. By 2029, buyers are expected to discount entities lacking automated compliance.

Conditions favor prepared buyers and sellers. Private equity holds record dry powder and financing has loosened. For sellers, documentation quality is crucial for clearing diligence; for buyers, acquiring a licensed entity can compress compliance timelines by 12–24 months.

Egor Podkolzin, founder of N5 Bank, added, "Fintechs out-acquiring banks reflects a deeper change in who builds financial infrastructure. Buyers today aren't acquiring a product—they're acquiring a regulated operating foundation."

This shift has significant implications for the financial industry, as traditional banks now compete with fintechs for acquisitions, and the valuation of regulated licenses becomes a critical factor in deal-making.