As a wave of fintechs rode successive funding rounds to ever-higher valuations over the past five years, Swedish buy now, pay later company Klarna declared its ambition to become the Ryanair, Tesla and Amazon of the sector.

But now as central banks raise rates in a fight against surging inflation, Klarna is trying to raise fresh cash at less than half its peak $46bn valuation and fintechs are having to come to terms with a world where expansion can no longer be fuelled by cheap money and business models must be demonstrated by profits.

A record amount of investment poured into fintech companies in 2021, but many now struggle to raise fresh funds and are discussing selling themselves or accepting lower valuations to stay afloat, according to investors, analysts and executives in the industry.