The financial sector is dominated by big banks which mainly focus on generating stable profits instead of breakneck growth. However, a new generation of fintech companies -- which are modernizing traditional payment and banking services with their tech platforms -- are growing a lot faster than those aging industry leaders.
But it can be tough to separate the winners and losers in that fragmented fintech market. So today, I'll discuss three potential winners which have plenty of long-term growth potential: Upstart (UPST 8.34%), Adyen (ADYE.Y 2.86%), and Nu Holdings (NU 1.94%).
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1. Upstart
Upstart is an online lending marketplace that uses AI to approve loans. Instead of using traditional data like an applicant's annual income or credit score, it uses non-traditional data points like standardized test scores, GPAs, and previous jobs to approve a broader range of loans for younger and lower-income applicants with limited credit histories.
Upstart doesn't provide any loans of its own. It only serves as an AI-powered middleman for its partners, which mainly include banks, credit unions, and auto dealerships. It generates most of its revenue by charging those partners processing fees for approving their loans.
Upstart suffered a severe slowdown in 2023 as soaring interest rates curbed the market's appetite for new loans. But its growth accelerated again in 2024 as interest rates declined, and analysts expect its revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow at a CAGR of 36% and 245%, respectively, from 2024 to 2027. Those are incredible growth rates for a stock that trades at 21 times next year's adjusted EBITDA. The near-term concerns about slower interest rate cuts are likely squeezing its valuations, but its stock could soar a lot higher once those headwinds dissipate.
2. Adyen
Adyen is a Dutch fintech company that doesn't provide any consumer-facing payment apps. Instead, it develops backend software for processing payments, analyzing customer data, and organizing financial information. Its software works behind the scenes and can be directly integrated into a merchant's existing online, mobile, and on-store payment platforms. It also enables merchants to develop their own digital wallets and branded payment cards.
That flexibility makes it popular choice for businesses that don't want to lock themselves to a bigger payments platform like PayPal (PYPL 3.43%). That's probably why eBay, PayPal's former parent company and top e-commerce partner, chose Adyen to replace PayPal as its preferred payment platform in a five-year transition from 2018 to 2023.
Adyen's revenue growth accelerated during the pandemic as more customers ramped up their online spending, but it suffered a slowdown in 2022 and 2023 as it lapped those gains. Rising interest rates, geopolitical conflicts, and other macro headwinds exacerbated its slowdown.
But Adyen's growth accelerated again in 2024, and analysts expect its revenue and adjusted EBITDA to rise at a CAGR of 22% and 28%, respectively, from 2024 to 2027. Adyen still looks reasonably valued at 22 times next year's adjusted EBITDA, and it should keep growing as it pulls more merchants away from centralized payment platforms.
3. Nu Holdings
Nu Holdings owns NuBank, the largest digital bank in Latin America. It's based in Brazil, and it also provides its services in Mexico and Colombia. Without any brick-and-mortar branches, it expanded much faster than traditional banks. It served 122.7 million customers at the end of the second quarter of 2025, compared to 33.3 million customers at the end of 2021. As Nu gained more customers, it increased the stickiness of its platform with credit cards, e-commerce services, and cryptocurrency trading tools.
As a result, its average revenue per active customer (ARPAC) jumped from $4.50 in 2021 to $12.20 in its latest quarter. Its average cost for serving each customer also held steady, and its margins expanded. Nu has plenty of room to grow because about a quarter of Latin America's adult population remains unbanked.
From 2024 to 2027, analysts expect Nu's revenue and net income (which turned positive in 2023) to rise at a CAGR of 23% and 36%, respectively. Yet its stock still looks dirt cheap at 18 times next year's earnings per share (EPS) -- presumably because investors are concerned about the persistent inflation and political instability in its top markets. If you expect Nu to overcome those challenges -- as it did in the past -- then it deserves a much higher valuation.
