The state of global fintech in Q2

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State of the market

Fintech startups attracted $7.4B in VC funding in Q1 2023, the lowest level of VC investment since 2018. The total is less than half the previous quarter (which was somewhat skewed by Stripe’s $6.5B megaround).

Fintech funding is for now on track to match 2020 levels, but may retreat further in the coming months.

Q2 2023 is showing a slowdown at every stage of investment. While early-stage fintech investment has been relatively more resilient, it is still at half its peak level. Breakout stage shows a nearly two thirds decline from the peak last year. Late-stage has pulled back the most, with Q2 2023 being the least active quarter for more than five years.

Looking at Q2 2023, Fintech has dropped to 4th most funded industry, behind health, enterprise software and energy. Q2 for fintech has seen a 70% drop in funding from last year,  compared to the 46% fall for the overall VC market.