Lenders may soon have the opportunity to acquire fintechs at depressed valuations as economic conditions decline and fintech operational costs soar.

“It is a hard life to be a single-product company,” Christina Melas-Kyriazi, partner at venture capital firm Bain Capital, said at the recent FinovateSpring 2022 conference, noting that fintechs need support from investors to cover costs related to growth, regulatory compliance and fraud prevention.

However, that funding is becoming more difficult to come by and investors aren’t putting offers on the table to participate in series A or B rounds, Melas-Kyriazi said. “Right now, if your company is series B or beyond, it’s tough out there.”

As valuations decline, startups are forced to deal with a shortage of capital, she said, noting that “some of those [fintechs] might get snapped up at depressed valuations … by larger companies who want to become super apps, or who want to increase their digital footprint.”

Columbus, Ohio-based Huntington Bank, for example, acquired San Francisco-based software-as-a-service fintech Torana for an undisclosed amount on May 12, according to a Huntington statement. The acquisition allows the bank to expand its technology while speeding up its in-house payment distribution process, according to the announcement.

Still, “the entrepreneurial spirit is strong, and I think we will continue to see a lot of entrepreneurs start companies in fintech,” Melas-Kyriazi said, adding that fintechs should keep in mind that “a lot of the problems that startups will face could be solved if they were acquired.”

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