Financing of the fintech sector did not do very well in the first quarter of the year.
financial technology fell 16% quarter after quarter during the three-month period, according to CB Insights' Q2024 7.300 State of Risk Report. But even more worrying than the double-digit drop was the fact that the $2017 billion raised globally by fintech startups in the three-month period marked the lowest level the sector has seen since the beginning of XNUMX, according to the report.
Notably, CB Insights counted Flexport's $260 million convertible ticket as a fintech deal because the company "offers trade financing and cargo insurance." Some might argue that Flexport is not a true fintech company because many companies offer some form of financing, payments or insurance as part of their offering. Removing that round from this count, the funding was just over $7.000 billion.
On the positive side, there was a 15% increase in stock transactions in the last quarter, which “means investors continue to show interest in fintech solutions, particularly payments technology,” according to a CB Insights spokesperson. . However, the average transaction size was smaller. Unsurprisingly, the biggest deals in the first quarter went to companies working on broader AI solutions.
During the three-month period, 904 investments were made in fintech startups. Monzo's funding of $430 million marked the biggest increase of the quarter. And Bilt with $200 million Series C took third place. US-based companies were the largest recipients of capital, collectively raising $3.300 billion in 393 deals in the quarter. Europe wasn't far behind, with startups raising $2.200 billion in 203 deals over the same period. The drastically lower number of deals in Europe indicates larger round sizes overall in that region, compared to the US.
By contrast, in the first quarter of 2023, $16.000 billion in funding went to 1.271 fintech startups. Thus, this year's total financing has decreased by 54,3% compared to the same period last year. Even more notable, $32.900 billion was invested in 2.026 fintech startups in Q2022 2023. Dollars raised and number of deals have also decreased compared to Q786 8.700, when XNUMX startups Fintech companies raised $XNUMX billion.
In the first three months of the year, only six new fintech unicorns were created.
Overall, venture funding rose 11% quarter-on-quarter to $58.400 billion, while deals fell for the eighth consecutive quarter, down 7% to $6.238.
