Fintech Q2 2022 report: fintech is retreating

Fintech Q2 2022 report by Dealroom and ABN Amro

Fintech is in a considerable slowdown. Funding has decreased greatly, especially at late stage; exits value and count have fallen. Also, unicorn creation is slowing down to pre-pandemic levels.

We’ve put together a top-to-bottom analysis covering how the sector adapted to the market slowing down in our Fintech Q2 2022 Report.

Report - Fintech Q2 2022

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While fintech was still holding on well in Q1, it’s caught up to the market shakeups affecting other sectors. Fintech startups raised $21.5B globally in Q2 2022, the lowest in the last 5 quarters and down 39% from the peak in Q4 2021.

Fintech is still the most invested industry worldwide but is suffering more than other sectors. Funding in fintech fell 32% YoY, 1.5x than the total VC funding globally.

The pullback is more evident in megarounds and late stage. Megarounds are at their lowest in more than one year, dropping 40% from their peak in Q3 2021. While the total number of rounds is holding on much better.

Fintech startups raised $21.5B globally in Q2 2022, the lowest in the last 5 quarters and down 39% from the peak in Q4 2021.

Europe’s fintech funding is holding on better than the US so far. In general emerging hubs like Southeast Asia, Africa and MENA are growing.

MENA fintech funding has grown the fastest in H1 2022. Other emerging hubs are holding on better than the broader market, except for Latam.

Exits value in Q2 is down massively from last year, totalling just $27B compare to its peak of $175B in Q2 2021. This drop was already seen in Q1 (due to public listings), but now smaller M&As are slowing down too in Q2 after a record Q1.

Unicorn creation is slowing down, almost back to pre-pandemic levels, with just 25 unicorns created in Q2 2022, compared to 53 in the same period last year.

The drop is also starting to show in private valuations. Klarna, previously Europe’s most valuable private fintech, has seen its valuation down 86% in its latest round, while Stripe has cut its valuation internally by 28%.

Valuations of private fintech startups are starting to falll. Klarna’s valuation is down 86% and Stripe cut its valuation internally by 28%.

Discover more on trends in funding, exits and fintech sectors in the complete Fintech Q2 2022 Report.

Report - Fintech Q2 2022

Get the complete report

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