Private Market Intelligence – August 2025
In this edition:
Private Credit Gets a Tax Tailwind
A rule change expands interest deductibility for debt-heavy companies. This boosts portfolio cash flows just as banks start to win deals back from private lenders.
Fintech’s Quiet Rebound
Stripe and Ramp are attracting growth capital again, but investors are focused on profitable infrastructure, not high-burn consumer apps.
Loan Market Shake-Up
Banks are reclaiming ground. With spreads tightening and volumes at record highs, private lenders must adapt or risk being left with lower-quality deal flow.
Private credit got a tax tailwind—right as banks reclaim their turf
Let’s start with the good news for private credit investors: buried in the recently passed One Big Beautiful Bill Act is a provision that loosens the cap on corporate interest expense deductibility, restoring it to a more favorable calculation.
Here’s how this cap has evolved over time:
It’s a seemingly technical shift, but for those riskier bets in your loan portfolio (heavily leveraged, D&A-rich), it can provide cash flow breathing room and even be the difference between sinking and staying afloat.
Enter BSL: Bigger, Cheaper, Faster
Just as private lenders got their policy win, Wall Street’s back in town. The broadly syndicated loan (BSL) market is booming. Recent weeks saw:
- $41B of deals in a single day—the third busiest day ever
- Spreads for B/B+ rated debt dropping to post-GFC lows
- A record $1.5 trillion in total outstanding loan volume
Most critically, banks are poaching deals that were once squarely in private credit’s domain. Two standouts:
- Finastra: A $3.6B syndicated loan refinanced the remaining balance of a $5.3B private credit facility – the largest private credit loan ever, issued in 2023. The private unitranche’s yield: 13.8%. The new BSL yield: ~9.1%.
- KnowBe4: A Vista Equity portfolio company refinanced its 2022 private deal with a $1.5B bank-led loan.
So, now what?
Private credit managers may now face a strange reality: they’ve got more viable borrowers thanks to the EBITDA-based deduction, but less pricing power because those borrowers now have increased access to cheaper bank debt. The deduction change could temporarily stabilize weaker credits giving sponsors more breathing room, reducing defaults, and improving exits. But if BSL continues pulling top-tier deal flow back into the syndicated market, private lenders may be left competing for the bottom half.
The Takeaway
The EBITDA deduction rule change is a boost to portfolio performance and recovery values, especially in distressed or late-stage assets.
But in terms of new deal flow, the real winners may be the banks, unless private credit players sharpen their pencils.
Investors should monitor how managers respond: do they shift to more bespoke capital solutions, move upmarket to club deals, or double down on non-bankable niches?
Tax math matters, but access and structure still win.
The State of Fintech Investing: How to Find Signal in the Noise
Recent movers
Stripe is now valued at $91.5 billion following a February 2025 tender offer, marking a near-complete recovery from its 2023 dip to $50 billion and close to its 2021 peak of $95 billion (Reuters). Ramp recently raised fresh growth capital at a $22.5 billion valuation, a nearly 40 percent surge from earlier this year, with profitability underway (Reuters). Yet some firms like Plaid have seen full-on value resets: it was valued at $6.1 billion in its April 2025 secondary share sale compared to its $13.4 billion peak valuation in 2021 during the fintech bull run (Pitchbook). The down round came despite over 25% revenue growth and positive operating margins in 2024. (Finovate)
Most fintech firms from the IPO wave remain under water and the public listing path remains narrow. Later-stage private capital is gravitating toward proven, high-margin businesses.
Late-stage Capital Flow and Valuation Landscape
Investors are shifting their focus toward later-stage fintech companies with proven monetization models, pulling back from experimental consumer apps in favor of enterprise infrastructure (CB Insights). Capital is flowing into platforms that serve as critical financial plumbing—payment rails, data connectivity layers, tax credit engines—especially those with recurring revenue and embedded client workflows. Standout value is flowing to firms with defensible margins and recurring product usage: Stripe’s bounce-back valuation and Ramp’s capital raise illustrate this thesis markedly (PitchBook).
Public Market Reality Check
As before, most fintech names that went public around 2020–22 are trading below debut prices, carrying the “busted IPO” label. Many expected players, such as Klarna and Chime, have delayed or shelved IPOs under macroeconomic pressure and policy uncertainty (MarketWatch). Tender offers and secondaries, not listing, remain the dominant liquidity path for privately held fintechs.
What Private Investors Should Scout Now
Institutional partners are now focusing on fintech businesses with:
- Enterprise or embedded infrastructure use cases
- High-margin recurring revenue models
- Operational scalability and regulatory readiness
Notably, fintech verticals like tax credit platforms—such as Incentify—are gaining attention for delivering early revenue and capital efficiency without public market dependency.
The Takeaway
Fintech is no longer defined by rapid scale or risk-on capital. It’s evolving into a selective arena: mature and fundamentals-driven. For private capital with patience, the space presents structured pathways to durable value creation, especially through secondaries, growth funds, or later-stage co-investments.
As public windows remain shut, fintech is recalibrating. And that should matter to capital allocators focused on resilience over hype.
Clockwork Tools – Pitch Deck
Currently raising capital for your company?
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