Recession?! Now that’s a bit of a scary word… definitely, has me shaking in my boots. But how does the FinTech industry size up to a recession?
The Downturn
At this point, the term ‘downturn’ has floated around for a minute. What does that look like in terms of FinTech?
It’s no secret that the FinTech industry has experienced a downturn in recent times, but not all FinTechs have been hit the same way or reacted the same. With layoffs plastering the headlines of FinTech news outlets, it’s justifiable that the industry is looked at with some skepticism at the moment. Funding has slowed down, having more than halved from the $37 billion highs we saw at the end of 2021. FinTechs have also had nearly half a trillion dollars knocked off their cumulative peak valuation since the start of 2022. But it’s not only the FinTech space that’s had to take hits, the Nasdaq and the S&P 500 have also had better days; a 28% and 19% hit respectively.
But there’s light at the end of the tunnel. Especially, if you’re operating in the B2B space. While B2C-focused FinTechs are feeling the full force of strapped-for-cash consumers, businesses are still operating and continuously looking for innovative tech solutions to help optimize their operations.
Recent CBS Insights data suggests that there are still a lot of FinTechs thriving in the marketplace. Probably less surprisingly, some of the top FinTechs to have on the radar for 2023 operate in the B2B space. Here are five companies to have on your watchlist:
Let’s go one step further and look at the subsector breakdown. Payments keeps its crown as the top subsector for FinTech VC funding—but apart from InsurTech, all have trended downward compared to the previous quarter.
The Light at the End of the Tunnel
The level of funding in the FinTech space has definitely retracted, but the outlook doesn’t seem so bleak for all subsectors. Konstantin Zaripov, Managing Director at MultiPass, spoke to FinTech Magazine about the state of the payments space:
“Payments have recently grown a lot and have an overall share of one-third of the total funding received. Other sectors that have grown tremendously are Digital Lending (which has risen three-fold), InsurTech (risen two-fold), WealthTech (three-fold), and Capital Markets (three-fold).”
It’s fair to say that FinTech remains an exciting space that will continue to grow, but companies are likely to make a shift from prioritizing hypergrowth to profitability.
Your Partner in Growth
As the FinTech industry continues to grow, so does the need for talent to facilitate this. At Storm2 we have specialized in connecting FinTech talent with disruptive FinTech players such as yourself. We can assist in any stage of your growth by connecting you with the right people. Please don’t hesitate to get in touch and we would be more than happy to see how we can help and support you in your journey and with your recruitment needs.
