An article all about FinTech funding and investment…we love that. Let’s take a deep dive into the numbers this year has produced so far and what we can expect in the second half of 2023. A great place to start is Dealroom’s FinTech Q1 2023 report.
In the first quarter of 2023, global FinTech funding surpassed $14 billion. Whilst this is an impressive figure, it doesn’t come close to the $26 billion raised by FinTechs in Q1 of 2021 or the $35 billion attracted in VC funding in Q1 of 2022. That being said, the first quarter of 2023 performed better than the previous two quarters, $13 billion and $10 billion respectively. For a further quarter-by-quarter funding breakdown over the last couple of years, check out the Dealroom graph below.
Although there's no way around acknowledging that global VC investment into FinTechs has slowed down, it remains the most invested industry behind enterprise software. In Dealroom's report, enterprise software encompasses OpenAI and the rest of generative AI which is a strong driver of this funding trend. The graph down below offers insight into the global VC investment by industry.
Dealroom partnered with ABN Amro Ventures for this particular report and their Director had an interesting insight to share. Whilst this insight focuses more on the European FinTech market, there is value for the global industry as well.
"Although we have observed a general slowdown in fintech activity across Europe, we are still witnessing the emergence of promising businesses, particularly at the early stages. These new startups are focused on building fundamental infrastructure for the future, and benefit from a large pool of talented engineers. As the fintech industry continues to evolve and mature, these companies are well-positioned to drive the next wave of innovation and growth."
Hugo Bongers, Head of ABN AMRO Ventures
Another notable insight, an article by sifted highlights that B2B FinTechs in Europe have secured almost double that of their B2C peers in the first three months of the year.
The global FinTech investment landscape in 2023 is very different to that of the last couple of years but the uptick in funding in Q1 of 2023 is promising for the industry. What is important to keep in mind, especially if you are currently looking to raise money, is that VCs have become more careful with their money. Whilst growth played a crucial part in raising funds during the FinTech boom, the focus has shifted more towards profitability. As the market begins to correct and there are more mergers and acquisitions taking place, investment firms are looking for a quicker return on their money.
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