Fintech fundraising down 46%.The worst-hit banking startups

In 2022, fintech companies have secured a total of US$75.2 billion in funding. This is a 46% decrease from 2021. The number of deals has also declined, with him in 2021 down from 5,474 to 5,048, down 8% year-over-year (YoY). Last year, CB Insights State of Fintech 2022 data showed.

Fintech funding declined steadily over the year, from US$30.4 billion in Q1 to US$21.2 billion in Q2, US$13 billion in Q3 and US$10.7 billion in Q4. The latter is the lowest level since 2018.

Quarterly Global Fintech Funding, Source: State of Fintech 2022, CB Insights, January 2023

Investors have slowed their investment pace in 2022 as public markets falter. This trend is evidenced by the decline of the US$100 million mega round.

In 2022, the mega round will be just US$36.5 billion, down 60% from 2021’s record activity. The number of mega rounds also decreased by 52% year-on-year to 179 times.

The top five equity deals of the year are Checkout.com’s $1 billion Series D, Flexport’s $935 million Series E, Klarna’s $800 million round, Viva Wallet’s $869 million round, It was Coda Payments’ $690 million Series C.

Checkout.com is a UK-based company that provides a cloud-based end-to-end payment platform. Flexport is a US technology company focused on supply chain management and logistics, including order management, trade finance, insurance, freight forwarding and customs brokerage. Klarna is a leading Swedish BNPL (buy now, pay later) startup. Viva Wallet is a Greek neo-banking startup targeting small and medium enterprises (SMEs). Coda Payments is a Singaporean provider of cross-border monetization solutions for digital products and services.

2022 Fintech Mega Rounds Funding and Deals, Source: State of Fintech 2022, CB Insights, January 2023

Looking at the Q4 2022 indicators, the data shows that the US continues to lead the world in fintech funding and deals, with 342 deals securing a total of US$3.9 billion. Europe raised her US$2.8 billion in her 248 deals and he was second. Asia followed with her US$2.7 billion and 228 deals.

The figures show that the US accounted for 35% market share in global fintech funding in Q4, while Europe and Asia recorded 26% and 23% market shares respectively. , which is in line with the previous quarter.

Of all the regions surveyed, Latin America and the Caribbean recorded the steepest drop, falling 71% year-on-year from USD 13.9 billion in 2021 to just USD 4 billion in 2022.

Fintech funding by region in Q4 2022, source: State of Fintech 2022, CB Insights, January 2023

While the United States, Europe, Asia and Latin America all saw declines in both fintech funding and deal numbers, Africa was the only region to see a year-on-year increase in fintech deals, with 227 in 2022. I recorded a round. This number represents a 25% increase year-over-year. .

Notable deals secured in 2022 include MoneyFellows’ US$31M Series B, Moove’s US$30M funding round, and Tanda and Telda, each securing US$20M in their respective seed rounds. will be The four rounds were the largest fintech deals in the region in 2022.

MoneyFellows is an Egyptian joint group lending and savings platform. Moove is a mobility fintech, providing revenue-based vehicle financing and financial services to mobility entrepreneurs across ride-hailing, logistics, public transit, and instant delivery platforms. Tanda is a Kenyan paytech startup. Telda is an Egyptian consumer money app.

Bank startup funding hit

While all major fintech categories saw a decline in funding last year, the data showed that banking startups were the hardest hit, with funding plummeting 63% and transactions down 33% year-on-year. % decreased. Globally, banking startups secured just US$9.4 billion through his 299 deals, his lowest since 2018.

Notable deals that closed in Q4 2022 include Trillian’s $358 million round, Lulo Bank’s $200 million round and Avant’s $150 million round.

Tryllian is a US digital bank that aims to provide its customers with banking, payment, investment and insurance services all in one app. Lulo Bank is a Colombian mobile banking app that offers money transfer, payment services and lending products. Avant is an American fintech company that offers digital banking products such as personal loans, credit cards and car refinancing.

Global Bank Financing, Source: State of Fintech 2022, CB Insights, January 2023

At the other end of the spectrum were capital markets technology companies, which experienced the slowest decline in funding, with total funding falling 39% year-on-year from US$3.8 billion in 2021 to US$2.3 billion in 2022. A yearly low of just 119 for 2022.

Top equity deals in the space secured in Q4 2022 include Vesttoo’s $80 million Series C, Viidios Capital’s $36 million Series B, and BMLL Technologies’ $26 million Series B. increase.

Insurtech, meanwhile, was the only fintech sector to see a year-on-year increase in mergers and acquisitions (M&A) deals, recording a total of 81 deals in 2022, up 40% from 58 in 2021. .

2022 will be an eventful year for the fintech industry, marked by hype around trends such as non-fungible tokens (NFTs), open banking, embedded finance and buy now pay later (BNPL). I was.

Many of these proposals and business models are still trying to find a foothold and define a path to profitability, but categories such as challenger insurtech, challenger banks and point of sale (POS) payment processing are doing better. It’s starting to get understood and it’s finding a market. Applicability and relevance, according to a Dealroom and ABN-AMRO Ventures report.