Does efficiency matter in M&A of FinTech firms?

The increasing presence of FinTech firms is reshaping the structure, behaviour and business models of the different players operating within the financial sector. The aim of this study is to understand whether there is any relationship between the achievement of specific efficiency levels by FinTech firms and their greater/minor involvement in M&A transactions. Since such a relationship could be in the opposite direction, the topic is important for a wide range of financial stakeholders, from individual investors to key market players and regulators. We measured efficiency via two different Stochastic Data Envelopment Analysis (SDEA) models. The results, obtained starting from a hand-collected data set made up of Italian FinTechs operating in the period 2021–2023, show that M&A transactions essentially involved firms characterised by both quite high or quite low levels of efficiency.